As a result of slowing sales of smartphones, South Korean electronics giant Samsungis planning to boost its production of organic light emitting diode (OLED) panels with a new production line, according to a report by the Reuters news serivce.
The company will invest 4 trillion won (about $3.6 billion) in the new production line that would be used mainly for medium and small-sized OLED displays for use in smartphones and tablets. The boost in components sales would allow Samsung to generate higher earnings on its products. The investments are said to begin this year and carry through 2017, Reuters said.
The OLED displays from the new production line will initially be curved panels, similar to those in the Galaxy Note Edge, with the belief that this type of smartphone or tablet would garner external customer wins, seen as a key component to future earnings growth.
Samsung has been writing massive checks of late in order to shore up its business. Recently, the company said it would invest some 15.6 trillion won (about $14.2 billion) for the production of a new semiconductor production facility.
According to IHS Technology, as a result of Samsung Electronics (SEC) sales of handsets declining, sales for Samsung Display (SDC), the supplier of LCD and OLEDs to Samsung products and others, have also declined from 2014.
Because of this both SDC and SEC are switching strategies, said Jerry Kang, senior analyst of emerging display technologies at IHS. “So Samsung Display is trying to increase flexible OLED sales mainly to Samsung Electronics and also increase conventional OLED sales mainly to other set makers,” Kang said. In order to enact this strategy, “they need to invest in additional flexible OLED fab lines,” he added.
The OLED market is heating up quickly. Reuters also reported that LG Display Co Ltd also has plans to invest between 1 trillion won ($907.3 million) and 1.2 trillion won ($1.1 billion) to add capacity to its own large-panel OLED production line.
Questions or comments on this story? Contact dylan.mcgrath@ihs.com
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