Samsung To Build the World’s Largest OLED Plant to Confront Chinese OLED Makers

Quotes/ Perspectives from LEDinside: 
The design capacity of 270k is indeed a tremendous amount. Based on the capacity of a single evaporation machine offered by Canon Tokki, which is 15k, that means Samsung may need 18 evaporators for its new plant to manufacture that many displays. However, Canon Tokki, said to provide evaporation equipment to nearly all the OLED display makers, produces a very limited number of machines (9 units) each year. Considering it has other clients including another major OLED display giant LG Display, it doesn’t seem feasible that Canon Tokki can meet Samsung’s demand. It will therefore need further observations and evaluations to see if Samsung can make all that happen.

Could the fire of war in the OLED display market be as heavy as that in the memory industry? Samsung Display is reported to construct the world’s largest OLED display factory. Such a massive production ramp-up is believed to be the Korean display maker’s move to make competitive prices of its OLED products to confront the growing threats from Chinese contenders.

Samsung Display's Asan Campus (Image: iTers News)

According to a report from etnews on 30th June, an industry source told that Samsung Display is planning to build the 6th generation OLED display production base, consisting of two buildings- one reportedly in Cheonan and the other in Asan, and tentatively name it ‘A5.’ It would the biggest OLED display plant in the world. Its design capacity is estimated to reach 270k/m, 30% more than that of the A3 plant that is by far the biggest one of Samsung Display.

The market speculated each building would accordingly contribute to 135k/m and the company may need around USD 1.75 billion for the building construction alone. If the construction starts in late 2017, it could possibly start the MP in 2019. Samsung already takes the lead in the mid and small sized OLED display market by holding a share of up to 98%. Based on the production yield of the Korean company, it has an edge over Chinese display manufacturers in terms of production volume and product reliability and does not necessarily need to wait until 2020, when those rivals rise, to fight back.

The report stated Samsung Display could set up considerably high barriers to entry if it successfully scales up its production and lowers prices of its products. That could block out other OLED makers and helps Samsung secure its market share. Samsung used a similar strategy in the memory industry. The war ended up with the consequences that companies such as Qimonda and Elpida bottomed out and that the entire market is now owned by three major DRAM manufacturers. Samsung now topps the industry.

 

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