Samsung Display to end all of its production of LCD panels in South Korea and China by the end of 2020, amid falling demand for LCD panels
SEOUL (Reuters) - South Korean panel maker Samsung Display has decided to end all of its production of liquid crystal display (LCD) …
Context & Ripple Effects
This closes the loop on a retreat years in the making. Samsung Display flagged the demand problem as early as its rare Q1 earnings warning over weak chip and LCD screen demand, and it had already been steering capital toward OLED since its $3.6 billion OLED production line investment in 2015. Ending all LCD output in South Korea and China makes that pivot total.
It also extends a broader pattern of Samsung unwinding its China manufacturing footprint — the company had already ceased mobile phone production there in late 2019. The exit hands the commodity LCD market to Chinese panel makers just as Korean rivals are being squeezed from both sides.
First-order effects
- Samsung Display's Korean and Chinese LCD plants wind down by end-2020, removing one of the largest non-Chinese suppliers from an oversupplied market at exactly the moment falling demand is punishing every producer.
Second-order effects
- Chinese panel makers absorb the vacated share, accelerating the price pressure that later pushed LG Display to sell its large China LCD plant stake to TCL's CSOT unit — the move covered in LG's $1.54B sale of its China LCD plant.
- Samsung's own downstream TV and appliance business loses a captive panel advantage in China, foreshadowing the competitive erosion behind its later decision to stop selling TVs and appliances there altogether.
Third-order effects
- If the pattern holds, Korean display makers consolidate around premium OLED while Chinese firms own commodity LCD volume — the structural split captured when LG and Samsung were reported closing ranks against Chinese screen manufacturers' rise.
- Commodity display manufacturing migrates decisively out of Korea into China, leaving Korean firms dependent on staying a technology generation ahead rather than competing on scale.
The trend: Display manufacturing is bifurcating: Korean leaders exit commoditized LCD entirely to concentrate on OLED while Chinese producers take over volume panel supply.