Samsung Display to Withdraw from LCD Business This Month

Korean LCD Industry Declines Due to Profitability Deterioration Amid Low-Price Offensive by Chinese Companies

[Asia Economy Reporter Sunmi Park] Samsung Display will completely shut down its liquid crystal display (LCD) business this month. It has been 10 years since Samsung Electronics' LCD division spun off into Samsung Display in 2012 to strengthen its display business.

According to the display industry on the 4th, Samsung Display will operate its last remaining LCD production line, Asan 8-2 line in Chungnam, only until the end of this month and will stop production from next month. Samsung Display, which has been reducing LCD production, withdrew the Asan 8-1 line in August 2019 and replaced it with the next-generation display QD (Quantum Dot) line.

Samsung Display's decision to completely exit the LCD business is because the era of large-sized LCDs, which led the Korean display industry for more than 10 years since the mid-2000s, is fading due to the low-price offensive from Chinese companies. Samsung started its LCD business in 1991 and spun off Samsung Electronics' LCD division into Samsung Display in 2012 to strengthen its display business.

A Samsung Display official said, "We have not yet decided how to utilize the last remaining domestic LCD line after shutting it down," adding, "We are reviewing various options such as converting it to another line through investment or selling it."

Industry insiders estimate that the withdrawal from the business was inevitable as Korea's LCD panel market share has been shrinking and panel prices have continued to fall. According to Hana Financial Investment, Samsung Display's LCD TV panel production volume was 56 million units in 2014, holding the No. 1 market share (22%), but as it gradually reduced production lines from 2017, the annual production volume decreased to 40 million units in 2017, 31 million units in 2019, and 7 million units in 2021. Currently, Samsung Display's LCD TV panel market share is only about 2%.

Kiwoom Securities analyst Sowon Kim explained, "The downward trend in LCD panel prices is expected to continue," adding, "The oversupply rate of medium-to-large LCDs is understood to exceed 10% as of the second quarter, which is the highest quarterly level in 10 years." She added, "Due to the high operating rates of Chinese companies, the downward trend in LCD panel prices is likely to continue."