Samsung Display, a display panel manufacturing arm of Samsung Electronics, is the leader in the smartphone display business. It also makes displays panels for PC monitors, smartwatches, laptops, and TVs. The company seems to be facing a problem as it will likely post an operating loss for the first quarter of this year.
Samsung Display is projected to report an operating loss of KRW 464.2 billion ($378 million) and KRW 6.3 trillion ($5 billion) in revenue for the first quarter of 2020. Analysts say that the reason for the company’s operating loss is a sharp fall in demand for smartphones and TVs after the COVID-19 outbreak. Increased fixed costs due to the company’s factories being closed and the permanent closure of its LCD panel manufacturing lines have hurt the company’s performance.
Recently, the company announced that it would suspend the production of all LCD panels by the end of 2020 and upgrade its factories to start manufacturing QLED panels. Around 89 percent of the company’s sales come from supplying smartphone OLED panels to Apple, Huawei, OnePlus, OPPO, Xiaomi, and other brands, and that’s where the company is taking the hardest hit.
Unless countries around the world become successful in containing the deadly virus in the next few months, we will likely see Samsung Display and other firms posting losses over the next few quarters. Samsung’s other business, including its smartphone and home appliance arms, have taken hits as well due to the COVID-19 crisis.