Separating its LCD business from the rest company of the company will help Samsung to improve the competitiveness of its LCD operations, IHS said. However, that may not be the actual reason for the spinoff.
Market researchers from IHS said that an opportunity to dominate active matrix organic light emitting diode (AMOLED) displays is the true long-term benefit to Samsung. Samsung said last week that it will be spinning off its LCD business into a new company that will be called Samsung Display. IHS speculates that Samsung Display will then merge with Samsung Mobile Display, a joint venture between Samsung Electronics and Samsung SDI, which manufactures LCD and AMOLED displays.
“Samsung’s LCD division is the world’s second-largest LCD panel maker in terms of unit shipments, while Samsung Mobile Display is the top supplier of AMOLED displays,” said Sweta Dash, an analyst at IHS. “A merger would allow the new company to combine its OLED expertise with internal prodigious experience and market influence in the LCD segment. Because of its myriad advantages, OLED represents the future of display technology, representing a huge growth opportunity in the coming years.”
IHS believes that AMOLED has a greater growth opportunity than LCD over the next few years. The company forecasts an annual growth rate of 29 percent between 2011 to 2015 for AMOLED, while LCDs may only gain an annual average of 5.8 percent for LCDs during the same time frame. In 2011, Samsung Mobile Display controlled the AMOLED space with a market share of 85 percent. LG was second with 15 percent. In large-size LCD displays, Samsung held a 22.9 percent share and LG 25.8 percent, IHS said.