Samsung Electronics Weighs Merging with Samsung Mobile Display
Samsung Electronics is weighing merging with Samsung Mobile Display (SMD) to create “better chemistry” between components and finished products manufacturing, sources close to the company said.
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Samsung, which disclosed the plans in a regulatory filing in South Korea, is moving to create a single components division that would feature LEDs and OLEDs, industry analysts said. Samsung is absorbing its LED unit, Samsung LED, in April, the company said. SMD was created as a joint venture between Samsung and Samsung SDI in 2008 to focus on production of OLED displays for smartphones and other devices. Samsung LCD has been an affiliate that makes large-screen LCDs, but Samsung also announced plans at CES to market a 55-inch OLED TV this year. “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.
In addition to making OLEDs for Samsung smartphones, SMD had landed business with HTC, Huaweii, Motorola, Nokia and others. Samsung, which owns 64.4 percent of SMD, is planning to invest $6.3 billion in OLED businesses this year as it adds manufacturing, including capacity for 8th-generate substrates. It also has 4.5G and 5.5G capacity. Samsung SDI owns the remaining 35.6 percent of SMD.
SMD’s revenue last year jumped by 45 percent to 6.6 trillion won due to the popularity of Samsung’s Galaxy lineup of smartphones that used OLEDs. Samsung sold about 130 million Galaxy smartphones in 2011 and is targeting 150 million this year. SMD’s had a 90 percent share in 2011 of OLED display market, producing them in sizes up to 4.3 inches, analysts said. But it’s likely to face increased competition this year as LG Display and AU Optronics boost production.