South Korea's tech behemoth Samsung Electronics said Wednesday that it is mulling spinning off its liquid crystal display (LCD) business.
"The company is considering spinning off its LCD business, but nothing has been decided yet," Samsung said in a regulatory filing, adding that detailed information will be unveiled within three months.
Market watchers expected the spin-off to spur the merger between the LCD business and Samsung Mobile Display (SMD), the organic light-emitting diode (OLED) display-making unit of Samsung Electronics.
"It is natural for the spin-off to bring about the merger between Samsung's LCD business and SMD. Samsung has no reason to run the two divisions separated as the SMD plans to expand into TV business with the launch of AMOLED TV this year. The lineup of the LCD business can be changed into the one for the AMOLED, boosting the efficiency of the business," said Park Young-joo, an analyst at Woori Investment & Securities.
Samsung's LCD business suffered losses for the fourth consecutive quarter in the fourth quarter of last year due to price falls in display panels amid weak demand caused by the global economic slowdown.
Analysts predicted the possible merger to raise synergy between the two units. "The possible integration between LCD and OLED business will be helpful as investment and human resources will be focused on the promising OLED business," said Seo Won-suk, an analyst at Korea Investment & Securities.