Large-size liquid crystal display (LCD) panel shipments of Samsung Display Co., South Korea’s leading panel maker, sharply recovered last month after the company fixed the defect stemming from a new fabrication process that has caused the company big losses early this year.

According to Taiwan-based market research firm WitsView, the display making affiliate of Samsung Electronics Co. delivered more than 4.46 million sheets of LCD panels in July, up 11.5 percent from the previous month of 4 million sheets. It ranked second by LCD panel shipments following LG Display Co. whose shipments grew 5.7 percent on month in July. LCD shipments by China’s BOE Technology Group Co. decreased 1 percent from 4.04 million panels in June.

An unnamed official at Samsung Display said the company saw its LCD display shipments get back on track in the second half after “we have successfully addressed the problem resulted from the transition to a new manufacturing process.”

The company adopted a new manufacturing method early this year to stay ahead in the market, but the approach ended up in failure. It replaced parts used to maintain a certain gap between glass substrates, but the use of new parts significantly lowered yield rates. In addition, LCD panel defect rate soared when the company used thinner glass substrates. As the problem got worse, the company in April appointed Samsung Electronics’ vice chairman Kwon Oh-hyun to double the role as its chief executive to address the issue.

Suffering from low yield rates and high defect rates, its LCD business made a huge loss estimated to reach 740 billion won ($662 million) in the first quarter ended March, erasing profits generated from its organic light-emitting diode (OLED) panel business. In the following quarter, the loss in the LCD business was estimated to have dropped to around 500 billion won with recovery in the yield rate, and driven by large profits from its OLED panel business, the display maker could return to profit.

Industry watchers expect that earnings of Samsung Display would start to improve in the rest of this year following the recovery in its LCD business.

By Song Sung-hoon

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