|Samsung Electronics Vice Chairman Lee Jae-yong sees display products using QD-LED technology installed in a demo room at Samsung Display's plant in Asan, South Chungcheong Province, in this March 19 file photo. Korea Times file|
By Kim Yoo-chul
Samsung will exit the saturated traditional liquid crystal display (LCD) market with the aim of taking the lead in the quantum dot light-emitting display (LED) sector that uses technology relying on advanced "QD-LED" material.
"Samsung Display plans to suspend the operation of the firm's LCD plants both in South Korea and China until the end of this year. Employees have been notified and briefed on the details and specifics relating to the closure of the LCD facilities," a company official said Tuesday.
"The suspension of the LCD plants means a shift toward developing profitable and promising advanced displays which are considered the next panel iteration. QD-LEDs, foldable OLEDs and QD-nano displays (QNED) will be the next tech that Samsung will spend money on, replacing conventional LCDs," a person familiar with the matter added.
During a briefing, the display affiliate of Samsung Electronics, presented a detailed roadmap of why QD-LED mattered with regard to keeping the company's display business ahead of the field. Employees at its LCD plants will be reassigned tasks relevant to the development of QD-based displays. The number of people working at Samsung Display's LCD plants was about 3,000.
"After the briefing, Samsung Display sent a letter to all company employees. The letter said business conditions in the LCD industry were rapidly worsening due to a significant influx of Chinese manufacturers. It said the decision to exit the LCD business was because of the need to move forward with new technology focusing on QD-LEDs."
Regarding the possibility of completely closing its LCD business, Samsung Display spokesman Y.W. Cho said; "Samsung Display will stop producing LCDs from next year as the company will prioritize producing large-sized displays using next-generation QD technology." Samsung plans to invest up to 13 trillion won ($11 billion) by 2025 to build a plant capable of manufacturing "true QD-LED" screens that are self-illuminating.
QD technology mainly relies on indium phosphide instead of toxic cadmium, and can produce a panel lifetime of up to a "million hours." The improved shell design of panels appears to increase their efficiency by preventing oxidation and energy leaks. Unlike its chief rival LG, which is betting on heavily organic LEDs or OLEDs, Samsung is now relying exclusively on the "QD-LED" brand ― though it still puts LED backlights behind a filter.
Businesses that operate on a thin profit margin often find themselves in a constant struggle to maintain this. Because of oversupply and worsening profitability, as demand for LCD panels for low-end smartphones and TVs slowed, prices were falling, and this obviously impacted Samsung's bottom line.
Its LCD facilities in Suzhou, China, could possibly be sold to Chinese LCD manufacturers. Samsung Display owns 60 percent of the plant, followed by the Suzhou regional government with 30 percent and Chinese LCD manufacturer CSOT with 10 percent.
Samsung Electronics, the world's largest TV manufacturer, plans to procure conventional LCD panels from Chinese or Taiwanese suppliers after Samsung Display's decision. The exit of the leader in the sector bodes well for BOE, CSOT and Taiwan's Innolux which are Samsung Electronics' sourcing partners for LCDs used in its mid-tier TVs.