Samsung’s board of directors has just approved the spin off of its LCD division.
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The board approval comes today after the decision made by three of Samsung’s Executive and four additional Independent Directors.
The display market is undergoing “rapid changes” with OLED panels expected to fast replace LCD panels to become the mainstream, Samsung said in a statement today.
“Amid this structural change adopting measures for change and innovation, including business restructuring, are essential to improve competiveness for our Display business.”
The LCD business will be spun off from Samsung Electronics to become a new corporation although will still be “wholly-owned” by the company.
The new corporation may even merge with Samsung Mobile Display and S-LCD Corp.
150 million shares are to be issued under the new corporation which will have net assets of KRW13.6 trillion and shareholders’ equity of KRW750 billion.
The board of Directors also gave final approval to the merger between Samsung’s LED and Electronics divisions, decided in December, “to nurture the LED business as the future growth engine of Samsung,” it said in a separate statement.
These dramatic decisions comes as TV maker and Samsung as the largest panel maker in the world comes under increasing pressure due to global economic downturn, flat demand and price deflation on panel TV’s.
Read: Samsung Beat iPhone Sales By 10M But LCD’s A Disaster Here
In December, Samsung said LED TV accounted for 70 percent of all flat TV sales it has sold recently, indicating a move away from LCD category.
This also comes as rival Japanese manufacturers Sony, Toshiba and Hitachi merged their small LCD panel businesses together under a new entity known as Japan Display, last year.
Samsung say the spin off will allow its LCD business work as independent operation specializing in display panels going forward, will enable it to reinforce its technological competitiveness; and give the Korean brand “an advantageous position in the future display market ahead of competitors.”
However, shareholders have yet to approve the board’s decision, and AGM is to take place March 16 next.
April 1, 2012 has been given as the date of the final spin-off will come into effect.