Samsung mulls merger with OLED unit
By Kim Yoo-chul
Samsung Electronics is considering merging with Samsung Mobile Display, an affiliated company which produces advanced digital screens, as part of a strategic realignment.
Samsung, which completes closely with LG Display for the title of world’s top liquid crystal displays (LCDs) provider, confirmed the plans in a regulatory filing.
Industry sources believe the company is moving to create a comprehensive parts division to handle operations related to light-emitting diodes (LEDs) and organic light-emitting diodes (OLEDs) within this year. Samsung has already announced plans to absorb its LED unit, Samsung LED, by April.
Samsung Mobile Display, a joint venture between Samsung and another, affiliate Samsung SDI, was established in 2008 and has been devoted to OLED displays and screens for smaller devices such as smartphones. Samsung LCD has been the group affiliate that produces larger displays for flat-screen televisions.
``As part of considerations to strengthen synergy between our businesses, we are considering merging with Samsung Mobile Display, but nothing has been decided yet,’’ Samsung said in a regulatory filing.
OLEDs are much thinner than LCDs and also enable brighter and sharper pictures. Samsung and LG Display are among the companies that are investing heavily in OLEDs in anticipation of bigger demand in the foreseeable future for mobile devices and televisions.
Aside of their use in Samsung devices, Samsung Mobile Display has found demand for its OLED products from major handset makers Nokia, HTC and Motorola and also Chinese electronics maker Huawei. Samsung is planning to invest up to 7 trillion won (about $6.3 billion) in its OLED businesses by the end of this year.
``We are moving to strengthen our capability in components and the idea of selection and concentration is in play here,’’ said Samsung spokesman Ken Noh without elaborating further.
A Samsung executive told The Korea Times that the absorbing of Samsung Mobile Display and Samsung LED will allow the company to benefit from economies of scale and better handle demand from overseas clients.
Among global technology heavyweights, Samsung has enjoyed a unique advantage from its dual strength in parts and finished products.
Aside of its contested supremacy in LCDs, the company is the world’s leading maker of computer memory chips and the top flat-screen television supplier, while trailing only Nokia in the market for mobile phones.
The addition of a new display unit will complement Samsung’s existing product lines across consumer electronics, home appliances, LCDs, information technology (IT) solutions and digital imaging.
In an organizational reshuffle last year, Samsung attempted to strengthen the autonomy of its parts division, which is controlled by Vice Chairman Kwon Oh-hyun. Vice Chairman Choi Gee-sung handles decision making for finished products.
Samsung Mobile Display saw its revenue last year jump by 45 percent at 6.6 trillion won, driven by the popularity of Samsung’s Galaxy lineup of smartphones that use its OLED screens. Samsung sold about 130 million Galaxy smartphones last year and is gunning for 150 million this year.
Samsung Mobile Display’s market share for OLED screens used in digital products last year was at around 90 percent, company officials say, although the market is still miniscule compared to the LCD segment.
While its rivals are still concentrating on thinner OLED panels, Samsung is looking to employ the technology for bigger products such as televisions.
``We are aiming to achieve better chemistry between parts-making divisions and finished goods making divisions, as that’s what CEO Choi has been aspiring to,’’ said the Samsung official.