Cutting down on the production of liquid crystal displays (LCD) by Samsung Display Co., in response to dropping profits, can also be seen as the company's move to shift its focus to a new type of organic light-emitting diode (OLED) panel, industry officials said on Wednesday.
The display making subsidiary of Samsung Electronics has trimmed LCD production at its Asan factory, about 100 km south of Seoul, while preparing a large-scale investment for Quantum Dot (QD) OLED panels, a type of hybrid display that uses both OLED and quantum dot technology, according to them.
"We have adjusted production in some of the LCD lines due to rising deficits amid a global supply glut but haven't yet confirmed investment plans for QD-OLED panels," a Samsung Display official said, asking not to be named, Yonhap news agency reported.
"It has become an inevitable industry trend as other LCD makers are decreasing supplies amid a sharp fall in prices."
Some industry watchers speculated that Samsung will soon stop some LCD lines and announce an investment plan for QD-OLED panels to focus on a more profitable segment.
Samsung Display, a leading smartphone OLED panel maker, already uses its QD technology for premium TVs and is well-positioned to develop the new type of display.
"Samsung Display is expected to phase out its LCD line at its Asan factory, realign its large display business and speed up its push for QD-OLED " Kim Dong-won, an analyst at KB Research, said noting that QD-OLED investment will be over KRW 10 trillion ($8.3 billion).
If the investment plan is confirmed, it would be the first in seven years for Samsung Display to produce OLED panels for TVs. The firm had supplied 55-inch OLED panels to Samsung Electronics in 2012, but it halted production in the next year due to a low yield rate.
Samsung Display suffered a deficit of KRW 61 billion on sales of KRW 11.8 trillion in the first half of this year, its financial report showed.
Its home rival LG Electronics has also been shifting its focus from LCD to OLED panels to boost its bottom line amid a flood of cheap Chinese LCD panels in the market.
In a conference call last month, its display making unit LG Display said it has transformed two of three of eighth-generation LCD lines to OLED manufacturing and is considering halting its last remaining line depending on the market situation.