SEOUL (Reuters) – South Korean panel maker Samsung Display said on Friday it is considering suspending one of its liquid crystal display (LCD) production lines at home due to a supply glut.
Samsung Display, a unit of Samsung Electronics Co Ltd, currently operates two LCD production sites in South Korea and one in China.
“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,” the company said in a statement.
Rising competition from Chinese rivals, a shift to more advanced OLED (organic light emitting diode) panels and slowing demand for smartphones and televisions have led to falling offtake and weak prices of LCD panels for South Korean display makers.
Samsung Display’s cross-town rival LG Display Co Ltd converted one of its LCD production lines to an OLED production line. That’s a path that Samsung Display may also take, said Park Sung-soon, analyst at Cape Investment & Securities.
LG Display is also considering various scenarios for its remaining LCD production line in South Korea, said Chief Financial Officer Suh Dong-hee at an earnings briefing last month.
Prices for LG Display’s main product, 50-inch TV LCDs, slid as much as 7.5% in April-June versus the same period last year, data from WitsView, which is part of research provider TrendForce, showed.
Market researcher IHS Markit said TV panel prices continued their “free fall” in July, even after some Chinese panel makers started to adjust their production due to the high inventories.
The researcher said panel makers were reacting to the lackluster demand forecast by their TV customers ahead of the year-end shopping season.
Reporting by Heekyong Yang and Hyunjoo Jin; Editing by Richard Pullin and Muralikumar Anantharaman