Samsung isn't just having to deal with the supply glut in the memory chip segment. It also faces similar challenges for LCD panels. There has been a significant influx of Chinese LCD manufacturers in this segment over the past few years which demand has slowed down.
This has led Samsung to consider the possibility of shutting down one of its LCD production lines. The company currently operates two LCD plants in its home country of South Korea and one in China.
Samsung could shut down one of its LCD production lines in South Korea
A spokeswoman for Samsung Display told Reuters that Samsung is thinking about suspending production at one of its LCD plants in South Korea. “Samsung Display has been adjusting the production output and facility operation due to oversupply and worsening profitability, and we are still considering the suspension of the line, but nothing has been decided.”
The increased competition from Chinese panel manufacturers had already been a significant business concern for Samsung. There has also been a shift to OLED panels while demand for LCD panels for smartphones and TVs has slowed. This has pushed prices down which has obviously impacted the company's bottom line. Samsung has long argued that OLED displays are not suitable for TVs. It has chosen to focus on quantum-dot technology for TVs instead.
Samsung Display's Korean rival LG Display finds itself in the same predicament. It recently converted one of its LCD production lines to OLED. Analysts believe that this is an option that Samsung might also take into consideration if the situation doesn't improve going forward.
