Korean electronics giant Samsung looks set to spin-off the firm’s LCD manufacturing into a new unit called Samsung Display Company.
The company is apparently keen to dispose of the loss-making LCD arm of the business in a move which will see the company focus on next-generation displays.
Despite Samsung being cited as one of the competitors that hurt Japanese electronics manufacturers, Samsung’s LCD business has also been considerably unprofitable, having lost over $650 million last year.
The company instead wants to focus on next-generation OLED displays of the sort that Samsung has used to good effect in the mobile business. Those devices are also set to enter the market at a considerable price premium over the cut-throat LCD television mainstream.
So in a sense Samsung is moving to pull the rug from low-margin cut-price teles and focus instead on the higher-margins of the high end. Assuming, given economic conditions, customers are willing to pay a premium for flash super-thin OLED teles.
One interesting consequence could be that it leaves Japanese firms in the clear to outsource LCD panel production to the Korean ex-Samsung LCD foundry. With falling demand for LCD panels, some consolidation among manufacturers seems inevitable.