Hardware Canucks reported early last week on rumors the company was considering such a decision. The Korean business paper Chosun IIbo, citing an unnamed source, originally claimed that Samsung was considering spinning off the business.
Market analysts quickly agreed it was a wide decision as the arm posted nearly $900 million dollars losses in 2011.
The new spun off company, incorporated as Samsung Display Ltd., will be launched April 1 with an investment of $665 million in capital from Samsung.
“The spin-off will allow us to make quicker business decisions and respond to our clients’ needs more swiftly,” said Donggun Park, executive vice president and head of Samsung’s LCD business in a press release.
“Through enhancements in business competitiveness, we will continue to provide superior products and services for the market,” he added.
Reportedly Samsung is considering various restructuring plans such as merging the spun off company other display affiliates like Samsung Mobile Display, the firm’s OLED producing unit.
“(Shifting to OLED) is an inevitable trend now. There’s no reason for Samsung to pour in more investment into its LCD business, and it would rather focus on raising its OLED technology,” said HI Investment & Securities analyst Song Myung-sub to the Wall Street Journal.