Samsung Display is going to take apart its equipment from Tangjeong L7-1 Line, which produces 7th generation LCDs, rather than to sell it to foreign panel manufacturers. Although Samsung Display is trying to quickly change over to OLED, it has not found any suitable buyer for used equipment. This indicates that Samsung Display will work swiftly to extend its OLED lines.
According to an industry on the 12th, Samsung Display has decided to request a professional business to take apart equipment from L7-1 Line that will stop operating at the end of this year. Samsung C&T is going to be in charge of finding a business that will take apart equipment and it recently submitted an order for this project that drew 3 businesses. It is going to evaluate them and select a final candidate that will take apart equipment.
Initially, Samsung Display was thinking about selling L7-1 Line to China’s Truly or CSOT. However Truly wasn’t a suitable candidate because it purchased 4.5th generation (L4) and 5th generation (L5) Lines from Samsung before and has yet to operate them properly. CSOT was also not a suitable candidate because it was not fascinated in buying L7-1 since it already started investing into 11th generation and has 8th generation line.
Samsung Display is in a situation where it has to hurry up and increase its production capability since it is fully operating OLED lines due to increase in demands from markets. It is focusing its investments into A3 Line, which is producing flexible OLEDs, throughout this year and as well as next year and is also increasing its production capability for rigid OLEDs from A2 Line.
Samsung Display believes that profit from selling its L7-1 line will be smaller than profit from production of OLEDs.
Early this year, Samsung Display sold its L5 Line to Truly for $50.88 million (61.3 billion KRW). Although L5 is capable of producing 100,000 to 120,000 panels per month, area of total production of L7 Line is about twice bigger than that of L5. Although Samsung Display can put out its used equipment to markets individually, it has decided to take apart equipment and put it out on junkyards. Not only is Samsung Display giving up on profits that it will earn from selling equipment but it is also paying tens of millions of dollars additionally to take apart equipment.
“A reason why Samsung Display has decided to take apart equipment is because it wants to quickly change over to OLED.” said a representative for an industry. “Internally, it is working to increase its production capability of OLEDs as soon as it can.”
Samsung Display is planning to stop operating L7-1 Line and completely transform it into a facility that will produce flexible OLEDs. L7-1 Line, which is composed of two lines, produces 150,000 7th generation LCD panels per month. Industries predict that Samsung Display will be able to produce 45,000 6th generation flexible OLEDs from L7-1 Line. However because facility is worn out and is not optimized to produce 6th generation flexible OLEDs, they predict that there will be some financial burden on Samsung Display to construct lines in a different from current form.
It is heard that new flexible OLED line that will be newly established at L7-1 will produce panels for Samsung Electronics and foreign businesses and not for Apple.
Industries are predicting that Samsung Display will begin to order equipment for producing flexible OLEDs at L7-1 in first quarter of next year and increase amount of production step by step after starting operation of L7-1 in first quarter of 2018.
Staff Reporter Bae, Okjin | withok@etnews.com