Samsung sells LCD division to CSOT

According to consistent media reports, the South Korean company Samsung is withdrawing from the LCD sector. The corresponding patents are said to have been ceded to the Chinese company CSOT, which belongs to TCL. Samsung thus evades the increasing pressure in the said area.

Fierce battle in the LCD market

The LCD market is fiercely competitive. Various parties, especially from China, have been engaged in a price war in recent years, which has made the business unprofitable for many established companies. In addition, there are constant patent disputes between the various players on the market. Samsung initially tried to survive the price war. To this end, the South Korean company had opened production sites in China, which promised lower production costs. Now, however, the company has decided to withdraw from the market, according to concurring reports.

Patents go to CSOT

By all accounts, 577 of the total of some 2,000 patents Samsung has applied for in the LCD field have gone to Chinese company CSOT, which is part of TCL. Samsung has thus behaved differently than was generally assumed in the run-up: The patents are not being held, but rather sold off with the company’s division. Nevertheless, Samsung keeps a backdoor open with the deal. The South Korean company holds shares in CSOT and already purchases panels from the Chinese company. Thus, Samsung products that work with LCD panels will probably still be available. However, these panels are no longer manufactured in-house, but purchased from CSOT. It is also speculated that Samsung has created an option for license-free use – but this cannot be confirmed.

CSOT itself draws the advantage from the takeover of Samsung’s patents that it is better equipped for disputes with the competitor BOE. BOE is aggressively expanding in the panel market – and could now be stopped by CSOT with patent protection lawsuits. How promising such an approach would be can hardly be estimated in advance; especially in the U.S., however, several patent lawsuits are already underway in the LCD field.

Samsung could focus more on OLED

It can also be expected that Samsung will not only increasingly purchase LCD panels from CSOT, but also shift its focus towards OLED panels. They have already been used in large quantities in the small format for smartphones for some time. Now Samsung could increasingly rely on them for TVs as well. However, BOE has also been active here recently. The further development in the matter remains to be seen.