Iljin Display is changing its focus to sapphire wafer as its new future growth engine from medium-large sized touch screen panel (TSP). While tablet PC market, which demands medium-large sized TSP, is making a slow progress, demand for sapphire wafer market is increasing.
Iljin Display (President Shim Im Soo) is a prime example of a business that benefited a lot from tablet PC market for the last 3-4 years. While existing TSP businesses focused on small TSP production that is for Smartphones, Iljin Display was able to see a lot of positive effects by focusing on medium-large sized market that are for 7-inches or higher. Although film TSP businesses were facing slumps, Iljin Display was able to sustain its business against slumps.
It received a direct hit on its business as Chinese low-priced tablet PC entered Korea since last year. TSP sales decreased from 568 million dollars (628 billion KRW) in 2013 to 373 million dollars (413 billion KRW) in 2014. Although Iljin Display is fighting against slump as production of small TSP expanded, it is facing against a tough situation. This is because the demand for its film products slowly decreased as Samsung Electronics used TSP that is integrated with active magnetic (AM) OLED, on middle-low priced Smartphones.
“It faced double of difficulties as the demand for its film TSP increased and Chinese market entered with its low-priced products. Even then effectiveness in Iljin Display’s production is pretty high.” A person in this business said about Iljin Display’s effectiveness despite of many difficulties.
Iljin Display is planning to recover TSP business by growing sapphire wafer business. Although sapphire wafer’s sales were only 28 million dollars (31 billion KRW) in 2013, it increased more than 35% to 37 million dollars (41 billion KRW) in 2014. It is expected to be around 68 million dollars (75 billion KRW) this year, and this increase is due to increase of demand for sapphire wafer as wearable equipment market is growing. Although the percentage of sapphire wafer’s sales was only at 5% in 2013, it is expected that it will increase up to 15% this year. /It is estimated that its importance in the company’s profit is a lot higher.
Iljin Display is planning to kill two birds with one stone by increasing the importance of ingot to be efficient in appearance and profit. Even if its competitors increase production capacity, it will able to sustain its preoccupancy effect for awhile.
“As sapphire ingot and wafer’s demands increase as of this year, there seems to be a lack of supply globally. Although the importance of sapphire wafer business is smaller than TSP business, its growth will be significant.” An analyst in a stock industry said about sapphire’s growth in future market.
(*Iljin Display’s sales and profit in 2013, 2014 are as following: Its sales in 2013, 2014 were 596 million dollars (659.1 billion KRW) and 411 million dollars (454.2 billion KRW) respectively. Its profits in 2013, 2014 were 54 million dollars (59.9 billion KRW) and 21 million dollars (22.7 billion KRW) respectively. Iljin Display’s projected sale and profit in 2015 are as following: Its projected sale in 2015 is 456 million dollars (505 billion KRW). Its projected profit in 2015 is 24 million dollars (26 billion KRW))
Staff Reporter Lee, Hyungsoo | goldlion2@etnews.com