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20 February 2012

Samsung plans to spin off its LCD business

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Samsung Electronics is planning to spin off its LCD arm of its business to concentrate on the more profitable, thinner and brighter Oled technology.

Provisionally named Samsung Display Co, the spun-off LCD arm would be officially launched as a new corporation on the April 1, 2012, with 750 billion won (£400,000) in capital. Head of LCD business and executive vice-president, Donggun Park said: “The spin-off will allow us to make quicker business decisions and respond to our clients’ needs more swiftly.”

Samsung is reviewing an eventual merger of its LCD and Oled operations, according to a spokesman at Samsung.

The plan, which is yet to be approved by shareholders, comes as Samsung positions itself for the rapidly evolving television market and is aimed at solidifying a competitive edge with more advanced technology.

The Oled display market is predicted to grow to more than $20bn (£12.6bn) in the next five to six years, which would account for around 16 per cent of the total panel market.

Investment in Samsung’s Oled business is expected to amount to around five trillion won this year.

Samsung’s LCD business however, has been operating at a loss, with the company seeing losses of 750 billion won last year, when TV sales slowed. Said analyst James Song at Daewoo Securities: “The long-term direction for their display business is going Oled. They can improve efficiency of investment by combining similar businesses.”