According to the industry on October 17, Samsung Display is mulling over whether the company will make investment for production of 30,000 units or 60,000 units a month as the first facility investment in the new factory A5 in the Tangjeong Industrial Complex in Asan. Although the outline of the entire investment size was roughly decided in the first half of this year, the plan was influenced by competitors’ turnarounds in the second half.
It is said that Samsung Display will make its first facility investment in A5 Factory in December. The display giant is likely to make the first investment for 30,000 units per month, but the production capacity may rise to 60,000 units per month depending on the situations of competitors and the company’s own yield. Samsung informed pre-process equipment suppliers of equipment delivery schedules viva voce.
But the size of its entire investment has yet to be determined. Although the company leaned toward build a Super OLED factory in the first place, its competitors' chasing speed could be faster than expected and the yield of the existing A3 factory did not yet reach a satisfactory level.
"If the A3 yield rises, we can naturally prune the size of the additional investment," an official said. “As the yield and the status of rivals should be monitored, it is highly likely that the final decision will be made next autumn."
LG Display is the competitor most watched by Samsung Display. LG Display will supply its mass-produced products from its first 6th-generation OLED E5 for the Google Pixel 2XL model. Although there is concern over E5 yields in the outside, LG Display's atmosphere is positive. Recently, the E5 line received a team to monitor and adjust the entire line for final mass production operation.
"In the early period, the E5 yield was low, but the yield improved considerably in just a few months, so we are encouraged," another official said. "We have more anticipation for and stronger confidence in good performances considering the fact that the E5 factory just began production.”
If LG Display secures a stable production system, Apple, which prefers multiple supply lines, is likely to reduce volume from Samsung Display. On Samsung Display’s part, the company can have an advantageous position when the company set its supply as tight as possible compared to demand. This is because Samsung Display can keep its price range high while minimizing the impact from volume reductions in the future.
The fact that the A3 line producing panels for Apple, has not yet reached a stable yield is also a factor in delaying investment decisions. In the case of liquid crystal displays (LCDs) with mature technology, about 98% is applied as a golden yield.
However, 6th-generation flexible OLEDs have no clear standards on a golden yield yet. Since Samsung Display is a monopoly supplier to the world market, Samsung's standards become the world standards. Flexible OLEDs are more difficult to process than LCDs and materials are difficult to handle. Due to this fact, experts say that it will take a considerable amount of time to achieve LCD-level yields.
Currently, the yield of the line that produces products for Apple is said to stand less than 60%. The yield becomes lower after a post-treatment process. In this regard, a role was also played by the fact that Apple is pickier about panels than Samsung Electronics or Chinese companies. Samsung Display has set a goal of stabilizing the entire A3 line by this month. This is because the confirmation of a final yield can pave the way to setting future production volume. It is said that Samsung Display will calculate the size of the additional facility investment by calculating demand quantity after raising the yield as high as possible by the first quarter of next year.