SEOUL, KOREA — On Feb. 20, 2012, the Samsung Board of directors agreed to nominate the spinoff of its LCD panel manufacturing unit for final approval at the General Meeting of Shareholders in mid-March. The decision comes as Samsung positions itself for the rapidly changing market environment. This electronic conglomerate is aimed at solidifying a competitive edge with differentiated technology by streamlining the decision-making process and managing business resources more efficiently.
The Samsung Display Co., Ltd., unit will officially launch as a new corporation on April 1, 2012, with KRW 750 billion in capital. Donggun Park, Executive Vice President and head of LCD Business, said, “The spinoff will allow us to accelerate business decisions and respond to our clients’ needs more swiftly.” He added, “Through enhancements in business competitiveness, we will continue to provide superior products and services for the market.”
Samsung’s decision to establish Samsung Display, a spin-off from Samsung Electronics plans on updating its display business structure. However, this could mean an opportunity or crisis for such a plan. Therefore, Samsung intends to create a new business structure by combining LCD displays and OLED displays. The establishment of an independent display company calls for a fundamental change and strong innovation in the display business.
Samsung Electronics also decided the spinoff will be massive as the company absorbs the OLED business. If the OLED business becomes too large, the change of the company can slow down production line. So the decision was to remove the possibility in advance. Another reason is that customers feel uneasy about the business for parts and the business for finished products in the company.
The newly established company is given tasks to expand the size of OLED displays and widen a gap with its competitors on the basis of producing large LCD displays. So, the new company is not expected to expand its LCD business but to make its R&D resources and production infrastructure OLED-friendly. New investment and research and development will be focused on OLEDs.
“The new company will be able to deal with changes in the market as LCDs and OLEDs are complementary to each other,” said a spokesperson for Samsung Electronics. “We expect that we can promote efficiency in terms of customer, business and risk management.”
More aggressive marketing is expected as well. Samsung Display will secure more customers as an independent company. Since the company’s disbandment of S-LCD, Sony’s joint-venture, it is expected to expand its sales power to receive orders from Apple and companies in Japan and China.
Even though it may restructure its functions and human resources during a merger with Samsung Mobile Display in the future, the size of its human resources may become bigger.
□ History of LCD Business Division
Jan. 1991: TFT-LCD business was transferred to Samsung Electronics
Feb. 1995: Began mass-production of displays for the first time in Korea.
Jan. 1997: Began to build the third production line (600×720mm) for the first time in the world.
Aug. 2000: Opened the AMLCD Research Center and began operation of the fourth line.
Apr. 2011: Entered the small and medium-sized TFT-LCD business
Sep. 2002: The fifth line began mass-production.
Nov. 2003: Developed the world’s largest full HD display (57")
Apr. 2004: Founded S-LCD
Mar. 2005: Developed the world’s largest TFT-LCD display (82")
Apr. 2005: The world largest seventh line began to mass-produce
Jan. 2006: The 7-2 line began to mass-produce
Jul. 2007: The 8-1 line began to mass-produce
Jan. 2008: The LCD module line of SELSK began to mass-produce
Jun. 2009: The 8-2 line began to mass-produce
Sep. 2011: Integrated the DS part of the LCD Business Division