More Investment in OLED
Samsung Display, which has led by Samsung Electronics Vice Chairman Kwon Oh-hyun from last month, has started the business reshuffle at a fast pace.
According to industry sources on June 13, Samsung Display will sell off some of its 7th generation LCD production “L7” line at the Tangjeong plant in Asan, South Chungcheong Province, after the L6 line, and convert previous LCD production lines to flexible OLED production lines.
The company, which invested 2 trillion won (US$1.7 billion) in the first half of this year, will make an additional investment worth 3 trillion won (US$2.56 billion) – a total of 5 trillion won (US$4.26 billion) by the end of next year. The company has made such a decision because it believes that demand of flexible OLED will rapidly rise from next year due to favorable factors, such as provision of OLEDs for new iPhones and foldable displays. In particular, Samsung Display is making an aggressive movement after Vice Chairman Kwon has served as head of the company.
Kim Dong-won, an analyst at Hyundai Securities, said, “Samsung Display will expand its new production capacity of the 6th generation flexible OLEDs, which requires more investment than that in OLEDs for Apple, at the LCD plant within the year. Since foldable smartphones should fold the screens more than once, the company needs to expand the production capability of OLEDs.”
Samsung Display currently operates L6 to L8 LCD production facilities and A1 to A3 mobile OLED panel production facilities. The L6 line produces LCD panels for IT devices, while the L7 and L7 lines produce LCD panels for TVs. The A1 and A2 lines produce flat and flat and flexible OLED panels, while the A3 line produces flexible OLED panels. When the L7 line is converted to OLED production line, four out of six plants owned by Samsung Display will produce OLED products.
On the other hand, the company has decided to sell some of its domestic LCD production lines. Especially, the L7 line, which mainly produce s 40-inch panels, has recorded a deficit this year. The 40-inch panels account for as much as 40 percent of Samsung Display’s TV panel production. However, the adjustment of its domestic LCD production capacity is unlikely to adversely affect its total LCD production capacity. This is because Samsung Display is expected to increase the production capacity in its Suzhou plant in China, which has lower production costs.