Hansol Technics is expected to begin contract producing TVs for Samsung Electronics.
The company saw sales from Liquid Crystal Display (LCD) module, or LCM, increase substantially in the second quarter.
The company said it posted 27.8 billion won in sales from electronics component businesses during the quarter __ near triple that of the between 9 billion won and 10 billion won in sales it posted from the businesses in the same time period between 2017 to 2019.
Its new LCM business was the main factor for the sales boost, people familiar with the matter said. Hansol listed LCM as one of its electronics component businesses on its filings to local financial authorities for the first time.
LCM is made from combining the LCD with a blacklight unit. Putting on a cover on the LCM completes a TV.
The South Korean company set up a production company in Vietnam in December last year called Hansol Electronics Vietnam Hochiminhcity. Hansol invested 3.57 billion won into the operation.
Hansol said it was setting up the company in Vietnam to begin its LCM business.
The company in the Southeast Asian country will first supply LCM to Samsung Electronics but, in the long-run, eventually start making a complete TV set, one of the people said.
Samsung’s TV business, called Visual Display (VD) business by the company, requested to Hansol first to become its contract maker. The South Korean tech giant’s request likely stems from its concern that its current contract maker in China could grow to be a potential rival.
Samsung will also save cost from the move. The company eventually want to increase the volume of TVs made from contract makers to 10 million units by 2021. It made 2.5 million units of TVs using these subcontractors back in 2019.
Samsung ships around 40 million units of TVs per year.
The conglomerate is also mostly producing 30-inch TV models using contract makers but is planning to expand this to TV models between 40-inch to 50-inch in size as well.
Hansol is expected to get orders for millions of units.
Samsung currently uses BOE VT and KTC of China and Amtran of Taiwan for TV contract production.
TPV, MTC, TCL, Skyworth, Konka and HKC of China are contending to get the South Korean tech giant’s orders for next year as well.
Hansol Technics’ current revenue stream is from powerboards. The company was a contract maker for Samsung’s budget model smartphones since 2015.
It posted 22.2 billion won in operating profits and 526.7 billion won in sales in the first half of 2020 __ a rise of 47.7% and 11.5%, respectively, from a year prior.