Samsung Display Considers Extending LCD Production Card

Prolonged Rise in LCD Panel Prices
Orders Backlog as Large TV Sales Increase
Extension Plan Under Review Until December Next Year

[Asia Economy Reporter Ki-min Lee] Samsung Display, which postponed the withdrawal from the LCD business once to March next year, is considering extending the deadline again until December next year. This is due to a surge in panel orders as large TV sales increase amid pent-up demand caused by the COVID-19 pandemic. The sharp rise in LCD panel prices is also a factor supporting the decision to extend the deadline.

According to multiple Samsung Display officials on the 24th, the company is reviewing a plan to extend LCD panel production until the end of next year at the latest. An industry insider said, "I understand that this information has recently been communicated to employees on the LCD production line at the Asan plant."

Originally, Samsung Display had planned to end its LCD business by the end of this year. Chinese display companies such as BOE, CSOT, and HKC launched a low-price volume offensive for several years based on massive government subsidies and other support, causing panel prices to fall and creating a situation where "the more they sell, the more they lose." However, with the global spread of remote work, online classes, and staying at home due to the COVID-19 pandemic, LCD TV sales and LCD panel prices surged significantly, leading Samsung Display to postpone the business termination date to continue production until March next year.

The reason Samsung Display decided to postpone the end of LCD production again from March next year is the prolonged rise in LCD panel prices, which was initially expected to be short-term. According to market research firm Omdia, the spot price of a 55-inch FHD LCD panel, which was $109 in June, rose sharply to $117 in July, $127 in August, $139 in September, $154 in October, $166 last month, and $176 this month.

If this trend continues, the price is expected to peak at $183 in February next year and maintain a high price level above $169 until November. Moreover, as Chinese companies monopolized 60% of the global LCD market share this year, they stopped the chicken game and began adjusting production volume and prices, resulting in increased order requests from customers and securing high profitability.

Inside and outside Samsung Display, there are also criticisms that the company has not thoroughly prepared the withdrawal strategy from the LCD business because it is focusing on transforming its business structure to the next-generation Quantum Dot (QD) display, its future growth engine. Due to the rushed sale of LCD equipment and personnel transfers, it has become difficult to "row the boat when the tide comes." Samsung Display already signed a contract in August to sell a production line to the Chinese company CSOT. In line with the withdrawal plan, about 200 employees in the large business division responsible for LCD production were transferred to Samsung Electronics' Device Solutions (DS) division in the same month. This month, about 400 more employees are planned to be assigned to Samsung Electronics, and the company is currently selecting personnel for the transfer.

This content was produced with the assistance of AI translation services.