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Samsung Display Seeking to Widen Technology Gap with Followers
Withdrawing from LCD Business
Samsung Display Seeking to Widen Technology Gap with Followers
  • By Michael Herh
  • April 1, 2020, 14:40
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Samsung Display has decided to exit from the LCD business within this year.

Samsung Display has decided to stop producing liquid crystal display (LCD) panels this year and shift the focus to quantum dot display panels.

Experts say that the company’s move is intended to gain a technological advantage through its super-gap strategy and recover its falling profitability.

Display's LCD panel business has been in trouble due to years of losses, even though LCD panel prices have recovered to some degree recently amid operations disruptions at Chinese display makers in Wuhan, China.

The company has thus far offset deficits in the LCD business with profits from sales of small and medium-sized organic light-emitting diode (OLED) panels. But Chinese companies have begun to produce small OLED panels for smartphones.

Furthermore, the COVID-19 outbreak has dampened demand for smartphones. Samsung Display supplies display panels to Apple and Samsung Electronics, but their smartphone sales suffered a 50 percent drop in China, and the release date of Apple’s next model, the iPhone 12 was postponed from September to the end of this year. This development is making it difficult for Samsung Display to find a way out of its deficits.

Samsung Display plans to sell LCD production facilities to Chinese companies and set up new production lines for next-generation products. Its current LCD production capacity is 165,000 units of seventh-generation products and 363,000 units of eighth-generation products per month.

Display industry insiders expect that Samsung Display will utilize the seventh-generation LCD fab to expand production lines for sixth-generation flexible OLED panels. As Samsung Display definitely has a technological advantage over competitors, it intends to boost its profitability by increasing output. The next eighth-generation fab may be used for production of quantum dot (QD) display panels or quantum dot nano emitting display (QNED) panels. The company is aiming to secure fundamental technology for QNED panels in 2021. Next year will also see mass production of QD-OLED products, the first product of QD display development.

Samsung Display's withdrawal from the LCD business is expected to force Samsung Electronics to revise its TV strategy. Currently, Samsung QLED TVs are manufactured by attaching Samsung Electronics' QD sheets to large LCD panels from Samsung Display. Many TV industry insiders say that Samsung Electronics will have no choice but to use panels from BOE and CSOT of China and Innolux of Taiwan for most of its QLED TVs next year.