Samsung Display is considering to suspend one of its LCD panel production facilities in South Korea because of oversupply, the company said this week. There is no final decision yet, but falling profitability and lowering demand could trigger the company to halt manufacturing.

LCD panels for various applications including computer displays, televisions, smartphones, digital signage, and other are produced at dozens of factories in China, Japan, South Korea, and other countries creating oversupply and cut-throat competition. Given macroeconomic uncertainties, demand for numerous devices such as TVs is expected to be weak during the year-end shopping season, which puts further pressure on panel makers.

Samsung and other advanced makers have tried to differentiate their own LCD-based products by adding quantum-dot films and other improvements to displays or TVs (to their backlighting, to be more precise), which certainly helped to improve image quality produced by these devices and enabled the manufacturer to charge a premium. Meanwhile, it looks like there are simply way too many LCD panels made these days.

Being the world’s largest maker of LCDs, Samsung operates two giant LCD production facilities in South Korea, as well as one in China. The company naturally wants to keep the latter plant, but the fate of one of the sites in South Korea is something that remains to be seen.

The official statement by Samsung reads as follows:

“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.”

Samsung’s rival LG Display has converted one of its LCD lines to an OLED plant. In fact, LGD has been focusing on production of OLEDs for quite some time and opened up new OLED sites both in China and in South Korea. Moreover, the company is also considering various scenarios for its remaining LCD facility in South Korea, according to a claim made by its CFO last month.

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Source: Reuters

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  • edzieba - Friday, August 16, 2019 - link

    For the same reason Skoda can't just decide to start pumping out lambos.

    Even if it were as easy as snapping your fingers to refit an entire production line with new equipment, you'd just end up flooding a small market with cheaper (and now unprofitable) displays but not significantly expand the market to make that up in volume. HFR HDR display assemblies are expensive because they're $#£&ing hard to manufacture.
    Reply
  • npz - Friday, August 16, 2019 - link

    This is Samsung we're talking about here. I'm sure they can achieve the high volume necessary if the premium was only 2x above current 4k IPS monitors, which are quite cheap now and where not a few years ago for this same reason. Currently the 4k HFR HDR monitors command a 5x - 6x premium Reply
  • imaheadcase - Saturday, August 17, 2019 - link

    Because you don't shift production when what we have now is because of R&D, not production capacity. Until they can make it cheaper by finding better ways, you ain't gett cheaper.

    That is why OLED is superior display, but expensive. Simply have not found a way that is "cheaper" than the way now.
    Reply
  • lilkwarrior - Saturday, August 17, 2019 - link

    The CEO has reportedly sensibly planning to prioritize OLED panels, which has worked quite well for them in the mobile that was long-overdue for them to do for larger panels besides laptop screens.

    Enthusiasts haven't been fooled or sold on QLED over OLED in the high-end TV market nor monitor market.

    A Q4 OLED 4K@120hz Dolby Vision HDR w/ HDMI 2.1 monitor coming up is probably going to DOA a lot of FALD/QLED monitors that are more expensive than that upcoming monitor because of the high manufacturing costs attempting to create a non-oled screen.
    Reply
  • zodiacfml - Friday, August 16, 2019 - link

    Simple. Focus on higher end or larger displays to let other suppliers take the lower end of the market. It won't improve revenue but at least, won't kill a facility which could be useful in the future. Reply
  • viivo - Saturday, August 17, 2019 - link

    Samsung's goal of creating a superultraextrememaximumwide monitor that is 12 feet wide and 4 inches high will come to fruition unless we join together to stop them. Reply
  • StrangerGuy - Saturday, August 17, 2019 - link

    It's the same story with every other consumer gadget: People are buying less because what they already have is good enough. Reply
  • FunBunny2 - Saturday, August 17, 2019 - link

    "what they already have is good enough. "

    American capitalists are pining for the 50s when all they had to do was put up bigger tail fins on that Buick to convince Joe Clueless to trade in. Putting up bigger tail fins didn't demand much change to the production plant, just new dies for the presses. Ah, the days when America Was Great, Again.
    Reply

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