Lcd display backlight.Samsung withdraws from LCD business. Samsung display has decided to shut down its liquid crystal display (LCD) business in June, making it difficult because of cheaper products made by Chinese competitors and a declining global competitive edge.

Samsung’s display subsidiary made the decision six months earlier than expected, largely due to the fall in LCD prices.

The average price index of LCD panels, measured on a 100 basis in January 2014, will fall to 36.6 in September, according to Display Supply Chain Consultants (DSCC), a US market research firm. This figure is much lower than the all-time low of 41.5 in April this year and 58% lower than the all-time high of 87 in June 2021.

Another factor is that Samsung Electronics, the largest buyer of Samsung display products, is partnering with overseas LCD suppliers, including Chinese electronic components maker BOE Technology Group and LCD panel maker Youda Optoelectronics.

Samsung display initially sought to shut down its LCD business by the end of 2020, but the plan was delayed at the request of its parent company Samsung Electronics because of a sudden surge in LCD prices during the outbreak.

Samsung display will no longer produce LCD for large TV screens, but will focus on organic light emitting diodes (OLED) and quantum dot (QD) displays. Employees of LCD business are expected to be transferred to QD business.

IT House learned that Samsung display was originally founded in 1991 as a LCD business unit of Samsung Electronics. It officially launched as Samsung display in 2012 and has since merged with three local and Japanese AMOLED manufacturers to produce advanced types of displays.

Back to basics, of course, cyclical changes in supply and demand remain the internal cause of the massive expansion of production capacity of products such as LCD (much more than analysts expected), falling prices and oversupply. DSCC specifically mentioned investment in IT applications (including monitors, laptops, tablets and other devices), and many panel suppliers thought the IT market would continue to grow. But in fact, the IT market peaked in 2021. At present, many of the expanded capacity can only be allocated to other areas such as automobiles. OLED, miniLED (LCD) continue to reduce costs, in fact, in the IT market is a great opportunity to replace the traditional LCD. Unfortunately, demand is falling, and the price war that we are about to face may be coming.

Market participants for television, IT and other categories of excessive optimism, so that capacity utilization has not been reduced in the short term, supply-side and panel price pressure will not be small in the second half of this year. As a result, DSCC further downgraded its industry 2022 revenue forecast (- 9%-13%, $14.2 billion) in its April report, with double-digit declines in IT and TV apps, while in terms of display area, DSCC’s forecast was reduced from 5% to 3%.