Samsung Display may extend its production of liquid crystal display (LCD) panels up to the end of 2022, TheElec has learned.
Samsung Display CEO Choi Joo-sun said the company was reviewing extending the production of large-sized LCD panels to the end of 2022, in an email sent to employees of its large-sized panel business unit.
People familiar with the matter said the company is very likely go through with the new plan to extend the production of LCD panels.
LCD panel prices have been going up since June last year. It is unknown as of yet when the price hike will halt and start declining.
Due to the difficulty of procuring LCD panels caused by this, Samsung Electronics’ TV business has been requesting that Samsung Display continue on with its LCD production.
Samsung Display originally planned to end its LCD production last year.
The company will now likely continue the operation of its L8-2 line up to 2022. The line manufactures LCD panels. Another line, L7-2, which also manufactured LCD panels, halted production in March this year. LCD equipment placed at L7-2 have been being removed since April 1. The process will last until July 20. Samsung Display will likely turn L7-2 into a flexible OLED panel line instead.
Samsung Display’s extension of LCD production means Samsung Electronics’ TV business will have more leverage in its negotiation with BOE and other Chinese LCD manufacturers.
BOE and CSOT are now the two strongest players in LCD.
Chinese panel companies had previously supplied LCD panels at competitive price to beat its Korean rivals. But as Samsung Display and LG Display have reduced their LCD businesses, Chinese panel companies have also slowed down their expansion of their LCD production capacity.
The shortage in display driver ICs have also caused them to slow down their expansion.
Samsung Electronics also procures LCD panels from LG Display, but people familiar with the matter said it prefers LCD panels from Samsung Display over them.
It will take sometime for Samsung Display to make a definite decision to extend LCD production, however.
The second quarter is traditionally the off season for IT products, which means the South Korean panel maker will have insufficient data to pinpoint an exact timeline for an extension. LCD prices may also suddenly dip once the hike stops.