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OLED panels

Samsung Display to expand small OLED line with $2.7 bn investment

The top panel maker is pushed to defend market leadership as it loses ground to Chinese rivals

By May 28, 2021 (Gmt+09:00)

Samsung Display’s 7.2-inch multi-foldable OLED panel, the S-foldable
Samsung Display’s 7.2-inch multi-foldable OLED panel, the S-foldable

Samsung Display Co., South Korea’s largest display maker, plans to spend as much as 3 trillion won ($2.7 billion) to build a new organic light-emitting diode (OLED) line for small-size panels used in smartphones and laptops.

According to display industry sources on Thursday, Samsung Display is building a sixth-generation smaller OLED panel production line at its plant in Asan, South Chungcheong Province.

The construction of the new OLED line with a monthly production capacity of 30,000 units comes as part of the display maker’s move to withdraw from the liquid crystal display (LCD) panel business.

The new OLED line will replace its LCD 7-2 line that makes large-size TV panels at the Asan plant. The LCD 7-2 line, which ended operations in March, will be removed by the end of July, according to the sources.

With the addition of the new OLED line, Samsung Display’s monthly production capacity of smaller OLED panels will rise to 195,000 units from 165,000 previously.

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.

Analysts said Samsung’s latest expansion plan is aimed at keeping its market leadership in the small and medium-size OLED segment.

According to industry tracker Omdia, display makers' global shipments of smartphone OLED panels are forecast to rise to 812 million units in 2022, up 39% from 585 million units this year.

Samsung Display's OLED laptop panels
Samsung Display's OLED laptop panels

SAMSUNG CHALLENGED TO RETAIN PANEL LEADERSHIP

However, Samsung, the world’s top mobile display panel maker, will likely see its global market share drop to 77% this year and decline further to 65% in 2022 from the 80% range in 2020 in the face of growing competition with Chinese rivals such as BOE, according to Omdia.

“Samsung Display faces a challenge to defend its leadership by further expanding its facilities against the offensive by Chinese companies that offer panels at lower prices,” said an industry official.

OLED panels are increasingly becoming mainstream in the smartphone display segment. More than 40% of all smartphones to be unveiled globally this year will be equipped with OLED panels.

Samsung Electronics Co., which procures most of its panels from Samsung Display, is expected to expand its laptop lineup with OLED panels. Apple Inc. is also known to be adopting flexible OLED displays for its new foldable phones.

Industry officials said Samsung Display will keep its eighth panel line that manufactures large LCDs for TVs until the end of 2022 to take advantage of the rising LCD panel prices on strong demand for IT products in the stay-at-home non-contact era.

The price of the 55-inch LCD TV panel increased 6% to $216 in April from the previous month. Prices of 65-inch and 50-inch panels each rose 8% to $274 and $192, respectively.

Samsung initially planned to close the production line 8 by the end of this year, but recently decided to continue to run it for another year, industry officials said.

Samsung Display's OLED gaming mobile phone
Samsung Display's OLED gaming mobile phone

Samsung Display began to remove LCD production lines from its plants in 2019 as part of Samsung Group’s display business restructuring led by Group Vice Chairman Jay Y. Lee.

Samsung Electronics, the world’s top TV maker, and its hometown rival LG Electronics Inc., said earlier this month they are increasing the sale of large-size OLED TVs as big-screen gaming is gaining popularity in the pandemic era.

Write to Byung-Keun Kim and Jeong-Soo Hwang at Bk11@hankyung.com

In-Soo Nam edited this article.

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