UPDATE: A spokesperson from Samsung Display told IBTimes UK, "Samsung Display has never spun off OLED business and will try its best to develop and produce LCD and OLED products to enrich human-beings environment and improves the well-being of society, as one of the world-leading display companies."
Samsung Display has separated its organic light-emitting diode (OLED) business unit in a new move to restructure its unprofitable businesses, says a report.
"Samsung Display separated the company's OLED business division and more of Samsung Display's workforce joined the OLED business unit. The latest decision was part of the ongoing Samsung Group-initiated efforts to restructure unprofitable businesses," an official familiar with the matter told the Korean Times.
The move might put the company's liquid crystal display (LCD) business in danger, the official added. "Now, Samsung is initiating an exit strategy for LCDs, which are no longer promising and have become unprofitable."
Samsung Electronics currently owns 84.8% stake of Samsung Display, which is led by Kwon Oh-hyun, senior vice chairman at Samsung.
Recently UBI Research, a research firm specialising in OLED technology estimated Samsung's OLED shipment soared to about 86.7% million units, in the first three months of 2016. The global shipment of OLED shipment rose to 91.3 million units, with Samsung accounting for up to 95% of the total shipment.
A spokesperson from Samsung Display said the company is looking for measures to deal with the low demand of LCD displays. With the increase in popularity of the low-cost displays manufactured by Chinese rivals, the LCD display is becoming less profitable.
Samsung is said to be turning its focus from LCDs to the more expensive OLEDs for small and medium size devices. An official said Samsung Electronics might acquire the LCD business from Samsung Display for its TV business.
"Samsung Electronics has no imminent plans to invest more in OLED TVs as TVs based on LCD technology such as quantum dot displays are customized to keep Samsung plants operating given the manufacturing infrastructure," said a fund manager from a US-based investment bank in Seoul.
"The OLED trend is for real. OLED will be accounting for a third of all smartphone displays by 2018," according to security firm Nomura Securities. "Japanese companies have fallen behind the Korean majors in both technological development and mass production experience."