Samsung Display Extends LCD Production In South Korea

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Saved by Coronavirus? Production of LCD displays in South Korea now extended, thanks to lockdown demand for home entertainment

Samsung Display has confirmed this week a major u-turn concerning the manufacturing of LCD panels, thanks mostly to the Coronavirus pandemic.

In March this year Samsung Electronics’ display unit had announced it would end all production of liquid crystal display (LCD) panels in South Korea (and possibly) China by the end of 2020.

That decision had been taken after Samsung Display in 2019 announced it was suspending one of its LCD production lines due to oversupply issues.

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Production extension

Samsung Display operates two LCD production sites in South Korea, as well as two in China. It had not made a final decision about closing its Chinese plants.

But the LCD display oversupply issue before the Covid-19 pandemic, resulted in Samsung Display reportedly considering an investment 13 trillion won ($11bn) to upgrade its South Korean liquid crystal display (LCD) plants to allowed it to mass produce more advanced “quantum dot” screens.

Samsung Display prior to the pandemic had been battling both an oversupply of LCD panels, plus having to contend with increasing competition from Chinese rivals, as well as a shift towards more advanced OLED (organic light emitting diode) panels.

But now Reuters reported that on Tuesday Samsung Display said it will extend production of liquid crystal display (LCD) panels for TVs and monitors, as more people sought home entertainment during the coronavirus pandemic.

It reportedly said it would extend LCD production in South Korea for an unspecified period of time.

Samsung Display reportedly said the length of the extension would depend on profitability considerations and market conditions.

It had said in late October that it was considering a “short-term” extension.

Pandemic demand

There is little doubt that the Coronavirus pandemic has created a surge in demand for home tech equipment.

Laptops and computer components for building home desktop gaming PCs are reportedly in short supply, prompting hefty prices for advanced graphic cards for example.

Indeed, Reuters cited research from TrendForce that revealed the lockdown enforced stay-at-home trend has resulted in a 30 percent quarter-on-quarter spike in global panel demand in the third quarter of the year.

However, TendForce added that the influx of more production capacities from Chinese LCD makers was likely to worsen a supply glut next year.

It should be noted that earlier this year Samsung Display had sold a majority stake in its Suzhou LCD production unit to China Star Optoelectronics Technology.

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Author: Tom Jowitt
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