Samsung subsidiary Samsung Display has its sights set on the growing organic light-emitting diode (OLED) display market.
The Korean conglomerate will build the world’s largest OLED manufacturing plant and boost the capacity to manufacture the screen panels by 30%. The company hopes that by building a larger facility, it will get a head start against smaller manufacturers that are planning to boost their own OLED screen capacity in the coming years.
Samsung Display is among a few manufacturers producing OLED panels around the world. So far, it’s also proven to be the most adept at delivering reliable panels that work as intended.
OLED has been widely viewed as the next generation in screen technology. However, it’s exceedingly difficult to produce, and even when it’s properly manufactured, yield rates are low, making it difficult for large buyers to get ample supply for their devices.
Apple(AAPL, +0.49%), for instance, has been rumored to be planning to offer OLED in its iPhones for years, but has been stymied by those low yields, forcing the company to stick with liquid crystal display (LCD) technology. OLED offers a host of advantages over LCD, including better brightness and improved color accuracy. It’s also a thinner screen panel and flexible, providing companies more design choices when they craft the look of their new devices.
While Samsung (SSNLF, +11.11%) and a few other smartphone makers have been offering OLED panels in their handsets for a few years, Apple is rumored to be using it for the first time this year in a handset believed to be known as the iPhone 8.
According to several reports, Apple has inked a deal with Samsung Display to have the Korean company manufacture the iPhone 8’s OLED screens. And going forward, Apple is said to be planning to bundle OLED technology in all of its iPhones starting in 2018.
Such demand from one of the world’s largest smartphone makers will put additional pressure on the OLED manufacturing market. But it could also create new opportunities for OLED manufacturers. And according to ETNews, Samsung Display’s decision to build the world’s largest plant is in one respect a response to Apple’s interest in the technology, and a hope that the company can secure most, if not all, of Apple’s orders.
Still, building the world’s largest plant won’t be quick and it will be costly. According to the ETNews report, Samsung Display doesn’t anticipate starting mass production in the facility until 2019. It’ll need to spend $1.75 billion to build the facility, and could require another $14 billion to get the equipment it would need to manufacture OLED panels on a broad scale.
According to the ETNews report, which was earlier discovered by 9to5Mac, Samsung Display will hold a board of directors meeting in July to finalize plans for the possible investment. Work on the facility, which would likely be built in China, would begin soon after.
Source: Fortune
