Samsung display has been having a dismal quarter. The overall results were better than anticipated and the mobile division is returning to health but the display division is causing some concern for Samsung. The main culprit is the LCD technology.
Samsung has been constantly losing its market share to LG and other competitors such as China’s BOE, Taiwan’s AUO and Innolux when the screen of size more than 9 inches is considered. Samsung share fell to 14.5% (fifth spot) while LG retained the top spot with a share of 24.3%.
Samsung is in the third position when overall LCD market is considered.
The problem seems to be the new panel production process that Samsung is adopting for LCD production. Samsung has to constantly improve the LCD panels to stay competitive in the market but the new process, though produces better panels than before, the yield rate is below average causing further trouble for Samsung.
The decline in sales of laptop PCs and smart TVs isn’t helping either. Samsung has also announced that it will close the 5th production facility in china due to the falling demand for the LCD panels. On the whole, Samsung is shutting doors on 5 of the 8 production facilities currently in function for LCD technology.
Hence, Samsung has altogether decided to let go of the LCD technology and will transit towards the OLED technology. It has recently invested heavily in a facility that will begin production of OLED panels at the end of this year. Samsung also entered into a contract with Apple to produce OLED displays for the future iPhone that will begin production in 2017. It will reportedly use the 8th generation OLED designs.
