Samsung has announced an indefinite delay in the closure of its LCD factory 9th,Oct,2022
Recently, it was reported that Samsung will indefinitely extend the closure plan of LCD factories, which means that the original plan to close all LCD factories this year has turned around, Samsung does not plan to close for the time being.
The main reason for the turnaround is that the LCD market price has changed significantly recently. The price has increased by about 60% in half a year. Samsung, seeing that the LCD market is "profitable", decided to "beat its own face" and postponed the original plan to close down its factories indefinitely, which will change the market pattern again.
The main reason for indefinite delay
According to OFweek, as Samsung, LG and other display manufacturers have announced that they will stop the supply of LCD panels, leading to a tight upstream supply chain, LCD panel market continues to rise, the price continues to rise. LCD panel prices rose 30% in the third quarter of this year alone, which is the main reason Samsung announced the delay.
Meanwhile, Luffy Lin, chief analyst at Wit Display, said, "LCD panel prices remain high and will continue to rise. Samsung Electronics would have to buy LCD panels from other panel manufacturers next year at high prices, and Samsung Display has delayed production of LCD panels. "Samsung Electronics will be able to underwrite Samsung Display's LCD panel production capacity next year, which will partially ease the pressure on Samsung Electronics to purchase LCD panels."
Once LCD overlord announced delisting
For the LCD panel market, Samsung is the dominant player. Samsung rose in the period of Japanese enterprise monopoly. In the 1990s, Samsung was unwilling to be dominated by Japanese enterprises in the display industry. It developed LCD business even at a loss for 7 consecutive years, and finally reached the first place in the LCD panel shipment in the world in 1998.
Since then, it has completed the world's first 7th generation LCD production line, developed the world's first 120Hz 70-inch full HD LCD panel, mass-produced the world's first 22-inch transparent LCD screen, and developed the world's first 55-inch curved LCD screen, all of which have steadily taken the leading position in the LCD industry. But on March 31, Samsung Display announced that it would end all LCD products by the end of this year to accelerate development of the QD Display project.
Choi Ju-seon, head of the large business division of Samsung Display, said, We have made a major change in our management strategy because the LCD market has been in a severe slump in recent years and the large business has been running a large deficit. In order to overcome the current management crisis and improve the competitiveness of the large business, Investment in QD display began in earnest in October last year. "The company has decided to accelerate its transition to the QD display business by stopping all LCD products by the end of December 2020."
New technologies such as OLED and microLED are coming
Samsung s decision to withdraw from the LCD market is not only due to its deficit, but also due to the arrival of new technologies such as OLED and microLED.
At present, OLED occupies an absolute position in the smartphone market. In addition to low-end phones of Apple and some brands, OLED is used as the screen choice of smartphone. TVS, laptops and tablets, the main battlefields for LCD panels, are also saturated. DIGITIMES, a well-known institution, predicts that global shipments of large-size LCD panels will decline at a negative CAGR of 0.8% from 2020 to 2024.
Samsung has announced an indefinite delay in the closure of its LCD factory
Photo source: OFweek
This shows that the LCD market is in its twilight years, and Samsung, as a leading display company, does not want to pay too much attention to it. Its plan is to develop more competitive technology.
In 2019, Samsung said it had invested more than 13 trillion won in equipment and research and development, mainly to upgrade its production lines. In terms of The most advanced microLED technology, Samsung also has an absolute lead. As early as 2018 CES, Samsung showed The Wall TV with microLED technology, which is the next development trend to replace OLED.
Beijing Oriental and other domestic display manufacturers rise
In recent years, in the LED market Chinese manufacturers also gradually have the name, began to emerge. Boe, as a representative of domestic screen manufacturers, has been developing rapidly in recent years. By the end of 2017, BOE's shipments had reached 25% of the global market share, ranking first in the world. In the market segment, BOE also ranks first in the market share of notebook computer display, tablet computer display, smartphone screen and monitor display.
At present, the production capacity of domestic manufacturers accounts for 44.8%. Enterprises led by BOE have also launched the production of super-large 10.5 generation, and other domestic manufacturers have added 8.6 generation production lines and 11 generation production lines, which is also the reason for the saturation of the current LCD panel market.
In addition to the production increase, due to the fierce competition in the domestic market, domestic manufacturers started a price war mode, which led to a sharp drop in the price of LCD panels, profits also decreased, Samsung and other international first-line manufacturers have quit the race track, turn to OLED, microLED and other high-end race track.
Samsung then sold the Suzhou LCD factory and TCL's display unit, China Star Electronics Technology, paid $1 billion for a 70 percent stake in the factory, with the display unit holding 60 percent and TCL holding 10 percent. At the same time, as early as last year, Samsung's two LCD production lines in South Korea have begun to reduce production to 40 percent, which also shows the determination of Samsung to exit the LCD market.