Samsung Display has started making about $8.94 billion (10 trillion KRW) of investments into its OLED facilities this year and this amount will be similar to last year’s investments of $8.76 billion (9.8 trillion KRW). Considering the fact that yearly investments for facilities were between $3.58 billion and $4.47 billion (4 trillion KRW and 5 trillion KRW) starting from 2012, investments that are almost doubled are being made for 2 years in a row. Reason why Samsung is making large amount of investments into extending its OLED facilities in a short period of time indicates that number of demands for OLEDs is rising at a rapid rate.
According to industries on the 30th, Samsung Display recently started making investments that will convert L7-1 Line, which used to produce 7th generation LCDs, into a line that will produce 6th generation flexible OLEDs. Major equipment manufacturers have officially made announcements to win contracts from Samsung Display. Production capability of L7-1 per month is 30,000 panels and it is estimated that amount of investments will be about $2.68 billion (3 trillion KRW). It seems that L7-1 will start to operate starting from fourth quarter of this year at the earliest.
Starting with L7-1, Samsung Display is going to invest between $7.15 billion and $8.94 billion (8 trillion KRW and 10 trillion KRW) into facilities this year. Besides investments for L7-1, about $2.68 billion (3 trillion KRW), between $2.68 billion and $3.58 billion (3 trillion KRW and 4 trillion KRW), and $894 million (1 trillion KRW) will be invested into converting LCD production lines, extending A3 flexible OLED Line, and facilities in Vietnam for rear-end process respectively.
L7-1, which is also called A4, A3E, and A12 within industries, is a production line that is transforming itself from a 7th generation LCD line to a 6th generation flexible OLED line. It is heard that Samsung Display is trying to secure production capability of 30,000 panels per month for L7-1 by end of this year. There is also a possibility that it will try to secure production capability of 45,000 panels by end of next year through additional investments. In order to secure additional production capability, it needs to invest additional $894 million (1 trillion KRW).
Followed by last year, Samsung Display is also going to continue investing into its A3 Line this year. This year’s investments will be the last for A3.
By end of last year, Samsung Display has the ability to produce 30,000 to 45,000 panels per month from A3. Industries predict that entire production capability of A3 will be between 120,000 and 130,000 panels per month by end of this year.
It is heard that Samsung Display ordered equipment that allows A3 to produce about 100,000 panels per month last year. It seems that Samsung Display will make additional investments into A3 so that additional 30,000 to 45,000 panels can be produced more from A3 per month.
Fact that Samsung Display is extending its lines in Vietnam for rear-end process is another good news for equipment manufacturers. Samsung Display invested $3 billion into module lines in Vietnam and is going to invest additional $2.5 billion by 2020.
Samsung Display has been making investments between $3.58 billion and $4.47 billion (4 trillion KRW and 5 trillion KRW) into its facilities every year. However this amount doubled when it made investments into A3 Line last year.
Reason why Samsung Display is making aggressive investments into small and mid-sized flexible OLEDs is because number of demands for OLEDs is rising at a very rapid rate. There is an immediate demand for about 80 million flexible OLEDs as Apple has started mass-producing OLED iPhones. Samsung Electronics did not include rigid OLED models to its Galaxy S8 series and this has increased number of demands for flexible OLEDs even more. Besides these, Chinese Smartphone manufacturers are also beginning to use flexible OLEDs for their flagship models.
Fact that Samsung Display is the only company that can manage rapid increase in number of demands is another reason why it is making more investments into its facilities. Actually Samsung Display is the only panel manufacturer that has experiences in mass-producing 6th generation flexible OLEDs. Although LG Display has experiences in mass-producing flexible OLEDs, it only mass-produced small amount of flexible OLEDs. LG Display is going to start mass-producing 6th generation flexible OLED this year.
Some are also carefully predicting that Samsung Display will decide on investments into its new facility called ‘A5 (tentative name)’ Line because A3 Line does not have enough production capability that will satisfy demands from related markets. Besides Smartphones, new lines are also needed for other IT products such as foldable displays, tablets, and laptops.
“While Samsung looked into which products and technologies it will make investments into for about a year after constructing A3 Line, it would have made bigger profits than current profits if it was able to push this timing forward.” said a representative for an industry. “Samsung Display is continually examining whether or not it will make investments into A5 Line in order to grab upper hands in markets and to secure future technologies.”
“Regarding investments into facilities, there is zero information that we can confirm.” said a representative for Samsung Display.
Staff Reporter Bae, Okjin | withok@etnews.com
■Trend of Samsung Display’s yearly investments into facilities
▲Samsung Display’s yearly investments into facilities Δ2012: $4.47 billion (5 trillion KRW) Δ2013: $4.92 billion (5.5 trillion KRW) Δ2014: $3.58 billion (4 trillion KRW) Δ2015: $4.20 billion (4.7 trillion KRW) Δ2016: $8.76 billion (9.8 trillion KRW) Δ2017: around $8.94 billion (10 trillion KRW)
Reference: Samsung Electronics