By Kim Yoo-chul
Samsung Display, the display arm of Samsung Group, has decided to invest up to 2 trillion won or some $1.8 billion to boost the output of organic light-emitting diode (OLED) screens, according to Samsung officials.
The officials said that the decision was mainly aimed at actively responding to the explosive demand for brighter screens.
To that end, the company will not build a new factory but extend the space to produce more small- and mid-sized OLEDs at its current factory in the provincial city of Asan, South Chungcheong Province, the officials said, Wednesday.
Despite the sluggish demand for electronic devices such as televisions and home appliances amid the prolonged recession in Europe and the weak economic recovery in the United States, the display unit is receiving more orders for those screens from Samsung Electronics.
``Samsung Display will invest as much as 2 trillion won for more OLED display outputs to push ahead with its plan to start mass production of displays using plastic rather than glass, a move that will make mobile devices lighter, flexible and unbreakable,’’ said one Samsung source, who is familiar with the matter.
The investment will be completed by the end of the first half of next year, the officials said.
``We are in talks with Samsung Display for the pricing of necessary equipment and equipment details with verbal guarantees from Samsung,’’ said an executive from one of Samsung Display’s parts suppliers by telephone asking not to be identified due to the sensitivity of the matter.
The space that will be expanded with the new investment is known as A2 Extension (A2E). Currently, the A2 line is capable of producing 75,000 OLED sheets per month. The firm aims to increase the amount of monthly sheets over 100,000 after the investment is complete, officials from Samsung and its parts suppliers hinted. ``The A2 line will go online sometime in the first half of 2013,’’ said the executive.
The global OLED industry is continuing to excite manufacturers and consumers with its promise of improved performance and lower power consumption.
Just five months after its global debut, over 30 million units of Galaxy S3 smartphones were sold. Also, the firm has sold over 3 million units of its latest Galaxy Note2 phablets.
All Samsung’s smartphones and tablets use OLED screens supplied by Samsung Display. Samsung Electronics fixed its plan to use OLED screens for its upcoming Galaxy models, they said.
Samsung plans to heavily cut its investment for LCDs. Its top management reached a broad consensus to allocate more budget funds for OLEDs by 40 percent next year from this year, according to the officials.
Of the 2 trillion won, the display unit plans to put up 300 billion won to strengthen its flexible display segment. ``Among the 2 trillion won budget, some 300 billion won will be used for flexible displays,’’ said another official from another Samsung parts supplier. Samsung spokesman declined to comment.
The company is expected to roll out finished flexible products not prototypes from the latter half of next year, while its biggest rival LG Display plans to start mass-producing plastic-based flexible OLED screens from the end of next year.
Samsung and LG are strongly pushing for OLED screens. But the next key phrase for the global display industry is ``flexible display’’ because top-tier smartphone and tablet makers are unexpectedly busy differentiating their items in order to boost profit margins, market share and to gain a first-move advantage in the highly-lucrative market.
OLEDs are thinner than conventional LCDs and OLEDs can be put on flexible materials such as plastic or metal foil. By using plastic rather than glass, they can make the screens lighter and more durable. Although both Samsung and LG earlier exhibited their own prototypes of flexible displays using plastic, the companies failed to market them due to significant technological barriers in mass production.