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Samsung Display made the decision to close down its liquid crystal display (LCD) business, and its operations are officially ending in June. It was reported that the declining global competitive edge brought about by cheaper products from Chinese and Taiwanese companies has brought down Samsung Group's display affiliate.
According to The Korea Times, Samsung Display has not yet announced any investment plans after it closes its business. It was noted that the move to shutter the unit came six months sooner as the company thought this would happen later rather than now.
Apparently, the company must stop its operations now as its losses are ballooning at a fast rate which was unexpected. The losses were due to the falling prices of LCDs since the Chinese, and Taiwanese competitors are selling the same item for a lot less.
Based on the survey of a US-based market research firm called the Display Supply Chain Consultants (DSCC), the average price index of LCD panels will plunge to 36.6 in the coming September. The number was measured against 100 in January 2014.
The figure went down further from the record low of 41.5 in April 2022 and 58% lower compared to the record high of 87 in June of last year. Another reason cited for the decline of Samsung Display's sales was Samsung Electronics' partnerships with foreign LCD supplies such as Taiwan's AU Optronics Corp. (AUO) and China's BOE Technology Group. These agreements affected Samsung Display's sales because Samsung Electronics was its largest buyer.
In any case, the South Korean panel display maker initially planned to halt its LCD business division in late 2020, but because of the sudden surge of LCD prices in the midst of the COVID-19 pandemic, Samsung Electronics asked Samsung Display to delay the plan.
After the shutdown, the LCD maker will stop the production of the liquid crystal display panels for large TV screens. The company will then focus on making organic light-emitting diode (OLED) and quantum dot (QD) displays. Meanwhile, all of the Samsung Display employees are expected to be moved to the QD unit, so everyone still has a job following the end of LCD production.
