Samsung Display to inject $11bn into next-generation screens
South Korean company hopes to surpass rivals by shifting out of LCD production
Samsung Display will invest $11bn in next-generation display technology over the following six years to stay ahead of Chinese rivals and South Korea’s LG Display in the growing market for large television panels.
The world’s biggest display maker will build a production line in central South Korea to produce large-size organic light-emitting diode (OLED) TV panels — above 65 inches — in 2021. It will also accelerate the conversion of its liquid crystal display lines into OLED production in the shift away from commoditised LCD panels.
Samsung’s bet on OLED technology comes as it grapples with growing price pressure from low-cost Chinese rivals in the LCD business. But the investment is smaller than expected, analysts said, especially compared with its big investment in small-size OLED screens used for smartphones a few years ago.
Samsung has a dominant position in the small-sized OLED panel market and is a big supplier for Apple’s new iPhone screen, but has hit a snag in scaling that up to larger TV screens.
The South Korean company will spend Won10tn ($8.4bn) building facilities for what it calls quantum-dot display and Won3.1tn in related research and development by 2025.
“Quantum-dot, which is a semiconductor particle that emits light close to natural colour, is the future growth vision of the large-size display industry,” said Lee Dong-hoon, the company’s president. “We will lead the premium display market through this investment.”
But Samsung’s refusal to adopt OLED TV panels took a toll on display margins as Chinese producers flooded the LCD market with cheaper panels. LG Display continued to improve mass production technology of OLED TV panels at a lower cost, making them for Japan’s Sony and Chinese TV manufacturers.
Samsung remains the number one TV producer, controlling about 30 per cent of the global TV market in the first half of this year, followed by LG Electronics with 16.5 per cent and Sony with 8.5 per cent, according to market researcher IHS.
But the company has reduced its display investment to Won800bn in the first half of this year and Won2.9tn last year from Won9.8tn in 2016 and Won13.5tn in 2017, when it bet on smartphone OLED screens.
Samsung’s latest investment plan will probably expand the OLED TV market size, said CW Chung at Nomura, noting that OLED TVs still account for just 2 per cent of the global TV market.
Kim Young-woo, an analyst at SK Securities, said: “Samsung’s quantum-dot OLED technology could be an improved version of LG’s OLED technology but is about 20 per cent more expensive. What counts is how to cut the cost.”