Crystal-clear decision
February 20, 2012
South Korea's Samsung Electronics announced on Monday that its board had agreed to spin off its loss-making liquid crystal display (LCD) business.
The world's largest maker of flat panels, memory chips and flat-screen television sets said its LCD unit would be launched as a separate entity on April 1 this year with a base capital of 750 billion won ($668 billion).
Samsung's LCD business suffered losses in every quarter of last year, mostly due to a global supply glut and fierce competition from China. LCDs are predominantly used in television sets, smartphones and laptops. But sales had been rather sluggish, prompting Samsung's partner Sony to quit its LCD development cooperation with the South Koreans.
The South Korean electronics giant said the planned spin-off would help it streamline decision-making and manage resources more efficiently.
Customers rule
"It will allow us to make quicker business decisions and respond to our clients' needs more swiftly," the head of Samsung's LCD business, Park Dong-Gun, said in a statement.
"Through enhancements in business competitiveness we'll continue to provide superior products and services for the market," he added.
Market experts argued that Samsung would be in a better position to strengthen investment in its more profitable business segments, such as the production of smartphones, non-memory chips and next-generation panels.
The company is expected to focus on integrating its proprietary super organic light emitting diode (OLED) technology in big flatscreen TV sets.
hg/gb (AFP, Reuters)