Korean tech firm Samsung Electronics Co. said Wednesday that it is considering spinning off its liquid-crystal display (LCD) business, a move seen as aiming to beef up its competitiveness.
"The company is mulling spinning off the LCD business, but details have not been decided," Samsung Electronics said in a regulatory filing.
Analysts said that the move seemed to come as its LCD business suffered from losses for the fourth consecutive quarter in the final quarter of last year amid industry-wide slumps.
Market watchers said that the potential spin-off is raising the chance it may merge with Samsung Electronics' organic light-emitting diode (OLED) display-making unit Samsung Mobile Display.
Samsung Mobile Display is a 50-50 percent joint venture with Samsung Electronics and its affiliate Samsung SDI Co. The company mainly produces OLED displays for mobile devices such as smartphones.
Previously, market watchers expected Samsung Electronics to absorb Samsung Mobile Display as one of the options to improve business synergy, but Wednesday's filing backs up the possibility that its LCD business is likely to merge with Samsung Mobile Display, according to analysts.
"If Samsung Mobile Display's mainstay business is combined with the LCD business, synergy in the display panel business is likely to increase," said Koo Ja-woo, an analyst at Kyobo Securities Co., in a report.
On the back of the news, shares of Samsung Electronics closed at 1,135,000 won ($1,012) on the main bourse, up 5.09 percent from the previous session. But its rival LG Display declined 1.51 percent to 29,300 won.
Samsung Electronics and other display makers are setting their sights on producing OLED displays, which are mainly used in smartphones, as more customers are turning to mobile devices. (Yonhap)