Samsung to spend conservatively on displays in 2012: report

Korea's Samsung Electronics Co. will spend conservatively on its display business in 2012 amid a prolonged downturn in demand for display panels, Macquarie Securities said Tuesday.

Samsung Electronics earlier announced its official capital expenditure budget for 2012, which stands at 25 trillion won, a 9 percent on-year increase. Out of the total budget, the company will spend 15 trillion won on its semiconductor business and 6.6 trillion won on display panels, which include liquid crystal displays (LCDs) and active-matrix organic light-emitting diode (AMOLED) displays.

"Samsung Electronics has likely cut its LCD capital expenditures to the minimum maintenance level to around 1.5 trillion won ($1.33 billion)," the Australian investment bank said in a report.

"We reckon that the company has toned down on the AMOLED TV market," it said, adding that the South Korean electronics giant is expected to spend 5 trillion won on capital expenditures for AMOLED displays in 2012.

OLED screens were widely expected to replace liquid crystal display (LCD) screens, but their high cost has remained a barrier to developing large-size, commercial electronics products using OLED displays.

The Samsung management was also concerned about thin film transistor liquid crystal display (TFT-LCD) panels mostly used in laptop computers and TVs, the investment bank said.

"The management expects an oversupply in TFT-LCDs to persist this year," it said.

Due to feeble demand for LCD panels from the global TV and computer industry, display panel makers have been suffering a supply glut, which in turn led to a drop in prices. (Yonhap)