SDI to keep advanced display business
Batteries to occupy half of total revenue
By Kim Yoo-chul
Samsung SDI will not transfer its advanced display business to Samsung Electronics, the company's chief executive said Wednesday.
SDI’s stock price has nosedived due to investors’ concerns about a possible transfer of its AM-OLED business to Samsung Electronics. Samsung’s solar cell business was recently transferred to SDI.
Samsung Electronics and SDI run a joint AM-OLED venture to boost the output of brighter flat-screens currently being used in smartphones, MP3 players and cameras.
``SDI will not give up our portion of the venture _ Samsung Mobile Display (SMD) _ because the AM-OLED business is also part of SDI’s next growth revenue,’’ said Park Sang-jin, the firm’s CEO, on the sidelines of a news conference.
Samsung Electronics has increased its share in SMD to 64.4 percent, followed by 35.6 percent in Samsung SDI.
``It’s true that Samsung’s plasma business is yielding more returns after our plasma business was transferred to Samsung Electronics, but the OLED business is a totally different issue,’’ Park said.
SDI is considering selling new shares on the stock market to raise cash for its new solar-related businesses.
``Samsung’s top management has reached a broad consensus to strengthen the conglomerate’s chemical-related business portfolios amid the brighter market outlook. On selling new shares, nothing has been decided yet,’’ the SDI CEO said.
At the news conference, SDI said its battery-related businesses including those used in electric vehicles will account for half of its annual revenue in the next decade.
SDI hopes to raise its total annual revenue to 13 trillion won by the end of 2015, which is more than double last year’s 5.1 trillion won.
The targets seem quite upbeat considering SDI’s stalled growth. SDI runs outdated cathode-ray tube (CRT) businesses in southern Asia, while it also makes plasma displays that are being phased out in key markets.
``I can say the next few years will be different. SDI will invest heavily to make an early profit in our solar business. We are also in talks with Volkswagen and other top-tier carmakers to supply electric vehicle batteries,’’ the CEO told reporters.
SDI expects to create 3.5 trillion won by 2015 from its solar cell business. Separately, it will secure three gigawatts of thin-film solar cell production capacity by then.
``SDI has a plan to run a solar cell module business initially based in Malaysia within a few years. We will switch the outdated CRT facilities there to solar modules,’’ said the company’s chief financial officer (CFO) Ji Myung-chan.
The company said its solar business will start yielding profits from the latter half of 2013 but is expected to remain in the red due to initial expenses to conduct research.
For batteries, SDI has been in ``deep talks’’ on several major deals in China and India, though the CEO declined to give further details.
SDI’s biggest local rival LG Chem is leading the way in global markets for rechargeable batteries for electric vehicles thanks to LG’s decades-long know-how in the chemical sector. LG has secured 10 global automakers as its clients.
``We will build facilities to produce cells and packages in the United States and Europe to complete a `short delivery system.’ The action plan will start from next year,’’ according to the CEO.
Under the latest transformation strategy, SDI said it will not invest additionally in the plasma industry, due to higher costs and less profit.
``The demand for flat-screen televisions is declining overall and plasma televisions are receiving some attention partly from the rise of three dimensional (3D) televisions. Samsung has beaten Japan’s Panasonic to become the top plasma maker, yet it is against the industry’s new trend,’’ Park said.