Samsung Electronics Completely Exits the LED Business, Following Retreat of Two Major Electronics Giants in South Korea

According to a report by CCTV Finance, South Korea's Samsung Electronics Group has recently begun to adjust its business structure due to its overall performance failing to meet expectations. Among them, the semiconductor department made a remarkable decision to fully withdraw from the light-emitting diode, or LED, business, which caused widespread concern from all walks of life.

Specifically, Samsung Electronics' semiconductor division recently announced an important decision to fully exit the LED business. The team was previously responsible for producing and selling leds for products such as televisions and smartphone flashes. In 2020, LG Electronics has announced its withdrawal from the LED business, and Samsung Electronics' decision this time means that South Korea's two major electronics companies have withdrawn from the LED business. Samsung Electronics entered the LED lighting business through the merger of Samsung LED in 2012, but its performance has been sluggish in recent years, and it has gradually lost its competitive edge in the international market. Although this business can reach about 10.4 billion yuan in annual sales, Samsung Electronics believes that it accounts for a small proportion of the company's total sales, it is difficult to guarantee the expected profit, and decided to spin it off in order to focus on more promising core areas such as power semiconductors and Micro LED business.

Power semiconductors are mainly used in electric vehicles, energy storage and other fields, and are regarded as an important engine to accelerate the industry. Micro LED is regarded as the next generation of display technology, but mass production and cost control are still very challenging, and the competition in the global market is also quite fierce.

At the same time, Samsung Electronics is facing growing challenges in its dominant business segments such as semiconductors, which is also reflected in its share price, which has fallen more than 23% this year. Data showed that foreign investors have been net sellers of Samsung Electronics shares for 28 consecutive trading days, setting a record for the longest net selling in history. During this period, Samsung Electronics has lost about 90 trillion won (about 467.1 billion yuan) in market value.

Samsung Electronics is a major player in South Korea's economy, accounting for about 18 percent of the country's exports last year. The decline in Samsung Electronics' performance will not only affect the export competitiveness of the Korean semiconductor industry, but also affect many upstream and downstream companies that cooperate with Samsung Electronics. Considering that these companies provide a large number of jobs in Korea, the crisis of Samsung Electronics could lead to a crisis of the Korean economy beyond individual companies.