Is Samsung LCD Spinoff the Right Move?

NO RATINGS
View comments: threaded view | newest first | oldest first
Cryptoman
User Rank
Blogger
Sensible resource allocation
Cryptoman   2/22/2012 7:47:24 PM
NO RATINGS

Given that Samsung is losing money in LCD business due to the pressures caused by reducing prices, there is no point in pouring more money into this. By giving the business to an independent subsidiary and keeping the shares, Samsung is positioning itself to a safe position financially. At the same time, Samsung is planning on allocating more resources to OLED technology, which has a growing popularity and is profitable. It is a technology with a promising future and strong signs of growth.

Thinner and brighter TVs are the way forward. That is a no brainer. (The OLED display market is expected to exceed $20B by 2018.) Therefore, I think this move makes perfect sense given the state of the LCD and the OLED markets and in terms of the long term vision of Samsung.

 

mfbertozzi
User Rank
Supply Network Guru
Re: Sensible resource allocation
mfbertozzi   2/23/2012 3:19:34 AM
NO RATINGS

Well done Cryptoman, in addition to your say we need to consider that usually, any spinoff process will impact also other sector of mother company, basically for organization steps to do. As consequence, those sectors which are achieving a good profit level for Samsung, right now (we could mention for example netbook or smartphone) are going to suffer the step mentioned by Barbara?

FLYINGSCOT
User Rank
Supply Network Guru
Good move
FLYINGSCOT   2/23/2012 4:39:38 AM
NO RATINGS

Samsung and Sony need to focus on higher margin technology with a higher barrier to entry.  OLED is far superior to LCD and yield will come once the appropriate focus is applied.  Divesting LCD business is a shrewd move.

Jay_Bond
User Rank
Supply Network Guru
Re: Good move
Jay_Bond   2/23/2012 7:12:24 AM
NO RATINGS

I agree that Samsung is making the right move. If Samsung and other major players like Sony start to focus on the OLED technology and creating a supply chain, prices will fall and sales will climb dramatically.

mfbertozzi
User Rank
Supply Network Guru
Re: Good move
mfbertozzi   2/23/2012 8:45:52 AM
NO RATINGS

According to recent results, for instance from Gfk analysts, LCD market is expected will grow, including 2012 trend. Did Samsung evaluate to spinoff LCD production due to technology interest in innovative sector ? Is that interest enough for leaving the segment and profit as per analysts have documented?

Barbara Jorgensen
User Rank
Blogger
Samsung LCD
Barbara Jorgensen   2/23/2012 9:01:59 AM
NO RATINGS

@mfb: the LCD market will continue to grow, but Samsung doesn't want to continue to invest in LCD. So the spinoff, which Samsung will continue to own, will keep production levels up while Samsung develops OLED. Since Samsung supplies Apple and other OEMs most of the LCDs for tablets and phones, they'd be crazy just to dump the business. Samsung also has a thiving LCDTV business that will remain viable for a long time. Since Samsung has already invested in the LCD manufacturing infrastructure, production will keep chugging along without a lot of additional investment.

WaqasAltaf
User Rank
Supply Network Guru
Production near end-demand source
WaqasAltaf   2/23/2012 9:28:06 AM
NO RATINGS

"There has also been a move toward manufacturing the panels closer to where end-demand is."

Such a strategic shift is likely to put costs down as many of the supply chain obstacles and price-build ups will be avoided. Also the qualititative factors in favour of production near source of end-demand should be the major considerations to further motivate OEMs to make such a shift i.e. the time and custom duty saved in shipments and avoidance of risk incorporated in cross border trading. However, such shift towards outsourcing should be made cautiously by the OEMs as the perceptions and rumours about low quality products manufactured by the outsourced manufacturer may contribute significantly towards decline in sales.  

Barbara Jorgensen
User Rank
Blogger
Re: Production near end-demand source
Barbara Jorgensen   2/23/2012 4:12:51 PM
NO RATINGS

@Waqas: well said. I also think this adds flexibility without the necessity of building new fabs every time demand shifts.

Jacob
User Rank
Supply Network Guru
Demand vs Production can change the cost
Jacob   2/24/2012 1:52:21 AM
NO RATINGS
1 saves

Barbara, now we are paying more than double the price of LCD for AMOLED screen. So far AMOLED screens are not in wide spread use and once it becomes popular, mass production happens and hence obliviously the price may come down.

Am not getting the difference between OLED and AMOLED? Is OLEDs are going to use in AMOLED Screens.

Barbara Jorgensen
User Rank
Blogger
Re: Demand vs Production can change the cost
Barbara Jorgensen   2/24/2012 8:52:05 AM
NO RATINGS

@Jacob: I'm a little out of my depth here, but AMOLED is active-matrix OLED. I think that is the same as AM LCD, which means there is a backplane and current that runs across the screen to provide light. I think OLEDs need a lot less current and possibly non. I know there are passive matrix LCDs and OLEDs, but the performance is not as good.

And yes, those TVs are expensive. I'll do with my LCDs for awhile longer!

elctrnx_lyf
User Rank
Supply Network Guru
future display technologies
elctrnx_lyf   2/23/2012 12:42:49 PM
NO RATINGS

This move by samsung is definitely a gud one. The LCD market is becoming price competetive and we have also heard of joint venture of sony, toshibha and hitachi to reduce the operational expenses incurred in manufacturing. So this is the right time to invest in future display tachnolgies and evolve as a leader.

_hm
User Rank
Supply Network Guru
New Challenges for Samsung in LCD market
_hm   2/23/2012 7:39:02 PM
NO RATINGS

With Apple inclined to get LCD from Japanese vendors and LG with huge investment with them, Samsung will face new challenges. If this decision is out of this fear, it may not be good for Samsung.

 

Barbara Jorgensen
User Rank
Blogger
Re: New Challenges for Samsung in LCD market
Barbara Jorgensen   2/24/2012 8:57:33 AM
NO RATINGS

@hm: The lawsuits between Apple and Samsung can't help matters much. I think LG is the second largest supplier of displays to Apple, and then Sharp. Apple is also reportedly working with China-based AU Optronics. There is no shortage of options for Apple, but as long as Samsung retains control of its panel business, there is still opportunity in LCDs. And, if Samsung suceeds in volume production of OLEDs, it may have Apple banging on its door again for the latest generation of panels.

WaqasAltaf
User Rank
Supply Network Guru
Re: New Challenges for Samsung in LCD market
WaqasAltaf   2/24/2012 9:32:04 AM
NO RATINGS

@_hm

I think its more about being the innovation and cost leader rather than fear of competition for Samsung. Atleast in the LCD market, Samsung's brand name has become almost as strong as Microsoft's in OS's market. You might argue about LG as a challenging competitor, but Apple has still alot to achieve to make its brand name in LCD market.

Anne
User Rank
Stock Keeper
Re: Samsung Spinning off LCD
Anne   2/25/2012 9:12:36 AM
NO RATINGS

It is a right move for Samsung spiining off its unprofitable LCD business, I'm suprised it has taken them this long to have upgraded to the recent OLED technology, LCD has been around for about ten years.

JADEN
User Rank
Stock Keeper
Re: Samsung LCD Spinnoff
JADEN   2/26/2012 8:53:40 AM
NO RATINGS

It is apparent the OLED is the next big thing in TV market and the demand will increase. Samsung doesn't have a choice but to move on to OLED TV, OLED is a promising technology.



More Blogs from Barbara Jorgensen
Electronics vendors are starting to use big-data in supply chain management, but they can do a lot more with the technology.
Electronics makers are looking to leverage the advantages of big-data in forecasting and demand planning. How successful will they be?
Like other catalogue distributors, Allied is moving beyond the catalogue model and taking the "multichannel" approach to distribution.
Manufacturers use software and data for varied purposes in supply chain management, but key goals such as visibility remain paramount.
Gartner envisions a world where tablets become the personal device of choice and PCs become a shared resource.

Datasheets.com Parts Search

185 million searchable parts
(please enter a part number or hit search to begin)
EBN Dialogue / LIVE CHAT
EBN Dialogue enables you to participate in live chats with notable leaders and luminaries. Open to the entire EBN community of electronics supply chain experts, these conversations see ideas shared, comments made, and questions asked and answered in real time. Listed below are upcoming and archived chats. Stay tuned and join in!
Upcoming Dialogues
REMIND ME
Live Chat 10/30: Top 10 Metrics That Enhance Procurement Performance
We'll be talking about the 10 most important procurement performance metrics, from the old standards to new and emerging best-practices.
10/30/2014
Remind Me
Live Chat 11/05: Enterprise Risks, Intellectual Property & Supply Chains
Enterprise risk management (ERM) frameworks can be useful to identify, assess, and manage intellectual property (IP) risks that arise in supply chain compliance. We'll look at real-world examples and strategies for mitigating those risks.
11/5/2014
Remind Me
Archived Dialogues
Live Chat 10/16: Applying a Macroeconomic Lens to the Supply Chain
EBN blogger Apek Mulay will be our guest as we talk about how macroeconomic reforms have the potential to impact the supply chain.
Live Chat 9/25: Minimizing Risk in the Global Supply Chain
Dave Bowen, CEO of e-sourcing firm MarketMaker4, will be our guest as we explore ways to minimize and manage geo-political and corporate risk in supply chain and sourcing through the use of technology.
Latest Poll
EBN Newswire
COLUMBUS, OH AND PHOENIX   10/20/2014
Avnet Opens CenterPoint Value-Added Services Center in ...
PETALING JAYA, MALAYSIA   10/20/2014
Avnet Appointed as a Cisco IT Distributor in Malaysia
POINTE CLAIRE, QC, CANADA   10/20/2014
Future Electronics Promotes Harvatek’s UV LEDs Series
Twitter Feed
EBN Online Twitter Feed