Samsung officially spinning off struggling LCD business in April
Apple supplier Samsung announced on Monday that it will spin off its LCD manufacturing business into a separate company beginning in April.
Citing a "structural change" underway in the display business, which the company believes is transitioning to OLED screens, Samsung's board of directors approved the spin-off of its LCD business, allowing it to potentially merge with Samsung Mobile Display. The new company will be known by the tentative name Samsung Display Co., Ltd.
Samsung's board of directors believes the spin-off will allow the LCD business to be more competitive going forward. Some companies, like Apple, have been reluctant to buy components like screens from Samsung, as the company also makes smartphones and tablets to compete with its own products in addition to manufacturing components.
The spin-off of the Samsung LCD business will officially take place on April 2, 2012. The new company's decisions will be made by three executive directors and four independent directors.
Indications first arose last week that Samsung was considering spinning off its LCD business, which lost $669 million last year. The spin-off sets up for a possible merger with Samsung Mobile Display, which makes next-generation organic light emitting diode (OLED) displays.
Apple is currently engaged in a number of lawsuits with Samsung, accusing the Korean electronics maker of copying the look and feel of the iPhone and iPad. Rather than relying on Samsung for LCDs, Apple has largely relied LG for iPhone and iPad displays.
Samsung's decision to spin off its LCD business was made as Apple is rumored to be working on its own full-fledged television set, which would place it in a market where Samsung has been a major player for many years. Last week, one Samsung official said his company's expertise in building display panels will give it a leg up on any potential Apple television in terms of picture quality. AV production manager Chris Moseley said he believes the quality of the screen on an HDTV is the most important aspect of the product.
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Comments
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Some companies, like Apple, have been reluctant to buy components like screens from Samsung, as the company also makes smartphones and tablets to compete with its own products in addition to manufacturing components.
I see exactly zero evidence that Apple has "been reluctant to buy components ... from Samsung". The article reports that some other companies are too reluctant to buy. Who are these other companies?
The article seems to make things up out of whole cloth. I woudl like some evidence and specifics to support these contentions.
Poor ole Samsung.
Not.
Karma.
I've not been following this to be honest. Are Samsung et al 'transitioning to OLED' or AMOLED? Or are the terms used to mean the same thing these days? I was under the impression OLED was too problematic and the active variety was better.
Naturally, Samsung is using AMOLED in their phones, tablets and TVs. Howerer, it's not incorrect to call it just 'OLED'.
Regarding problems, I think the only real issue with AMOLED displays is short lifespan of blue subpixels, which causes color degradation and burn-in.
In fact, if they were to spin off the semiconductor business, it might be interesting if Apple were to take a large stake in that new company.
I see exactly zero evidence that Apple has "been reluctant to buy components ... from Samsung". The article reports that some other companies are too reluctant to buy. Who are these other companies?
The article seems to make things up out of whole cloth. I woudl like some evidence and specifics to support these contentions.
Agreed.
I see exactly zero evidence that Apple has "been reluctant to buy components ... from Samsung". The article reports that some other companies are too reluctant to buy. Who are these other companies?
The article seems to make things up out of whole cloth. I woudl like some evidence and specifics to support these contentions.
You must be new here.
Poor ole Samsung.
Not.
This is GREAT news for consumers of which you are part of. This means faster adoption of OLED technology in everything from mobile devices to laptops, tablets, computer monitors, televisions, outdoor screens, touch enabled OLED's etc.
Most of the newer investments will be pour into OLED tech which is, in all respects, better than LCD can ever be. With the current glut of LCD supply, it makes the transition even more logical and beneficial. Samsung can improve its margins and get a lock down on the patents of producing these types of displays ahead of competitors. Right now, their market share of OLED is around 90%.
I see exactly zero evidence that Apple has "been reluctant to buy components ... from Samsung". The article reports that some other companies are too reluctant to buy. Who are these other companies?
The article seems to make things up out of whole cloth. I woudl like some evidence and specifics to support these contentions.
Welcome to Apple Insider
[...] AV production manager Chris Moseley said he believes the quality of the screen on an HDTV is the most important aspect of the product.
Maybe that's why Apple is working with Sharp now. The two companies have an exclusive deal for IGZO LCD panels and next-generation OLED panels. Both of those technologies will allow for higher image quality. And Apple and Sharp have patented the manufacturing processes for both those technologies.
On the other hand, I'd say that another critically "important aspect of the product" is its price. The LCD and OLED production technologies that Apple and Sharp are working on will reduce the cost of LCD and OLED panels. Apple could benefit from high quality *and* competitive pricing. The TV industry's worst nightmare. Samsung is getting out at exactly the right time.
How does this help Samsung? If their LCD business is currently taking a dump as Samsung won't it simply drag down Samsung Mobile Display if they merge?
If "Some companies, like Apple" are currently reluctant to buy from Samsung because they're competitors how will merging with Samsung Mobile Display make this any better?
I'll leave it at that... bit embarrassed about my lack of knowledge in this but am truly looking forward to any response!
I admit in advance my lack of familiarity - and that's why I come here to read your replies and ask questions.
How does this help Samsung? If their LCD business is currently taking a dump as Samsung won't it simply drag down Samsung Mobile Display if they merge?
If "Some companies, like Apple" are currently reluctant to buy from Samsung because they're competitors how will merging with Samsung Mobile Display make this any better?
I'll leave it at that... bit embarrassed about my lack of knowledge in this but am truly looking forward to any response!
It unloads their obligation of including the LCD business's balance sheet in the final consolidated quarterly financial statements, thus improving the bottom line.
Assuming that Samsung Electronics (parent company) has no ownership of the new company (not even 1%), they are not required to represent the financial health of the LCD business on its own financial statements.
Also, they can create (officially) a completely independent display company once it is branched off.
There are speculations that Samsung Mobile Display (makers of the OLED and direct control of Samsung Electronics) will also branch off and merge with the new company combining the OLED making expertise with the LCD business's production capabilities. This will help accelerate the adoption of OLED in everything from small mobile devices to large screen TV's and everything in between.
The parent company (Samsung Electronics) will only have the semiconductor, digital media and telecommunications divisions under its direct control with newly acquired subsidiaries like medical instruments, biotech and renewable energy divisions.
It unloads their obligation of including the LCD business's balance sheet in the final consolidated quarterly financial statements, thus improving the bottom line.
Assuming that Samsung Electronics (parent company) has no ownership of the new company (not even 1%), they are not required to represent the financial health of the LCD business on its own financial statements.
Also, they can create (officially) a completely independent display company once it is branched off.
There are speculations that Samsung Mobile Display (makers of the OLED and direct control of Samsung Electronics) will also branch off and merge with the new company combining the OLED making expertise with the LCD business's production capabilities. This will help accelerate the adoption of OLED in everything from small mobile devices to large screen TV's and everything in between.
The parent company (Samsung Electronics) will only have the semiconductor, digital media and telecommunications divisions under its direct control with newly acquired subsidiaries like medical instruments, biotech and renewable energy divisions.
Whoa. Not too often an Apple Insider poster has anything insighful or even factual to post without including made-up garbage that's easily debunkable via a 5-second Google search. Guess I've gotten used to people making stuff up here.
But on a serious note, this pretty much sums it up. Those are the upsides to spinning the display unit off. The downside is the parent company may not be prioritized when it comes to gaining access to smartphone and notebook displays. I would dare say some of the benefits of vertical integration are lost there.
I admit in advance my lack of familiarity - and that's why I come here to read your replies and ask questions.
How does this help Samsung? If their LCD business is currently taking a dump as Samsung won't it simply drag down Samsung Mobile Display if they merge?
If "Some companies, like Apple" are currently reluctant to buy from Samsung because they're competitors how will merging with Samsung Mobile Display make this any better?
I'll leave it at that... bit embarrassed about my lack of knowledge in this but am truly looking forward to any response!
Why embarrassment? Even admitting you're not knowledgeable about the facts or the business management dynamics at play puts you well ahead of many here. Your willingness to ask questions puts you years ahead of people who post uninformed garbage like:
Poor ole Samsung.
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or:
Karma.
'nuf said.