Samsung’s new $2.8 bn OLED plant to benefit Korean device makers

South Korea’s electronics equipment manufacturers are set to benefit from Samsung Display Co.’s planned construction of a $2.8 billion new factory for small-size organic light-emitting diode (OLED) panels.

Samsung Display, a unit of tech giant Samsung Electronics Co., is in talks with display equipment makers to set the exact size and other specifications of the machines, industry sources said on Monday.

Samsung Display Chief Executive Choi Joo-sun said at the International Meeting on Information Display (IMID) in late August that the company will build an eighth-generation OLED line to make smaller panels for information technology products such as laptops, smartphones and tablets, with an aim to start production in 2024.

He didn’t specify the investment size, but an OLED production facility usually costs between 3 trillion won and 4 trillion won ($2.1 billion-$2.8 billion).

The new plant would mark Samsung’s first major investment in small-size OLED panels since 2017.

The eighth-generation OLED panel substrate measuring 2,200 mm x 2,500 mm is larger than the sixth-generation substrate (1,500 mm x 1,850 mm) and produces more panels, slashing costs and the lead time.

Samsung is the world’s largest maker of small-size OLED panels, although its crosstown rival LG Display Co. is the overall OLED panel industry leader.

ORDER TO BEGIN IN Q4

Industry watchers said equipment orders will likely start in the fourth quarter of this year if Samsung Display is to put its new factory into operation in 2024 as announced.

“Those companies that supplied sixth-generation equipment to Samsung stand a good chance of winning new orders again,” said an industry official.

Some of the companies named by the industry include SFA Engineering Co., a maker of an intelligent transport system that moves raw materials and substrates on the OLED line.

The company is known to be ready for the mass production of an eighth-generation machine.

ICD, a domestic OLED plasma etching equipment supplier, is another company set to benefit from the new Samsung plant.

“In plasma etching technology, ICD is one of the world’s top players alongside Japan’s Tokyo Electron,” said Korean Investment & Securities analyst Kim Jung-hwan.

HB Technology Co., which makes automatic optical inspection (AOI) equipment, and AP Systems Inc., a chip and display device maker, are also expected to win orders from Samsung, industry officials said.

OLED, INDUSTRY'S NEW NORM

Display makers around the world are heavily investing in smaller OLED panels on the growing demand for more transparent and brighter screens for IT products.

The world’s two largest smartphone makers – Samsung Electronics and Apple Inc. – are adopting OLED panels for almost all of their next-generation gadgets such as the Galaxy line of phones, iPhones and iPads.

LG Display said last year it will invest 3.3 trillion won in small-sized panels to gain ground against segment leader Samsung Display.

OLED is highlighted by self-illuminating pixels that do not require a separate light source, allowing manufacturers to produce lightweight, thin and flexible display products, appealing to high-end consumers.

According to the Korea Display Industry Association, the small- and medium-sized OLED market is forecast to grow 14.3% to $39.8 billion by 2025 from $34.8 billion in 2021.

Write to Byung-Keun Kim at Bk11@hankyung.com
In-Soo Nam edited this article.