Samsung Display considers suspending output at South Korean LCD plant
SouthKoreanpanel makerSamsungDisplaysaid on Friday it is consideringsuspendingone of its liquid crystaldisplay(LCD) production lines at home due to a supply glut.
SamsungDisplay, a unit ofSamsungElectronics Co Ltd, currently operates twoLCDproduction sites inSouthKorea and one in China.
"SamsungDisplayhas been adjusting the productionoutputand facility operation due to oversupply and worsening profitability, and we are still considering the suspension of the line, but nothing has been decided," the company said in a statement.
Rising competition from Chinese rivals, a shift to more advanced OLED (organic light-emitting diode) panels and slowing demand for smartphones and televisions have led to falling offtake and weak prices ofLCDpanels forSouthKoreandisplaymakers.
SamsungDisplay's cross-town rival LGDisplayCo Ltd converted one of itsLCDproduction lines to an OLED production line.
That's a path thatSamsungDisplaymay also take, said Park Sung-soon, the analyst at Cape Investment & Securities.
LGDisplayis also considering various scenarios for its remainingLCDproduction line inSouthKorea, said Chief Financial Officer Suh Dong-hee at an earnings briefing last month.
Prices for LGDisplay's main product, 50-inch TVLCDs, slid as much as 7.5 per cent in April-June versus the same period last year, data from WitsView, which is part of research provider TrendForce, showed.
Market researcher IHS Markit said TV panel prices continued their "free fall" in July, even after some Chinese panel makers started to adjust their production due to the high inventories.
The researcher said panel makers were reacting to the lacklustre demand forecast by their TV customers ahead of the year-end shopping season.