In an effort to grow their display business, archrivals Samsung Electronics and LG Display are allocating billions of dollars on new production capacity directed towards midsize organic light-emitting diode (OLED) panels in an effort to secure business for Apple’s iPads and MacBooks.
This is also an attempt to keep out Chinese rivals from the premium display market which is dominated by the South Korean Companies.
Samsung Display have chosen to invest 4.1 trillion won, which is approximately $3.05 billion for the installation of OLED production lines at the company’s main production campus located in South Korea.
There are plans in place to produce 10 million+ midsize panels for notebook computers per year.
Samsung holds roughly 70% in shares when it comes to smartphone OLED panels, making them for not only their own smartphones, but for customers such as Apple.
Makers of OLED panels have been in competition, trying to produce the most stable and efficient product. Other Japanese manufactures, such as Nikon, Canon, and Tokyo Electron, could choose to advance the technology used after Samsung takes on next generation panel-making.
LG Display have chosen to spend 3.3 million won to install the new production lines at their mainline plant.
Due to notebooks and tablets switching over to OLED displays from LCD, Samsung and LG Display have poured in resources to the installation of OLED panels.
Apple is also in talks of introducing OLED panels for their new 2024 iPad. Expectations are that MacBook’s will also adopt the OLED displays in the future.
Samsung reports a steady flow of earnings due to the mass-production of OLED panels, whereas LG Display have reported a loss of 1.09 trillion won between January and March. This being the worst quarterly loss they have endured.
LG Display have been downgraded due to a now four straight quarterly loss. It is now choosing to borrow 1 trillion won from LG Electronics, so they are able to continue to invest in these panels.
However, there is a niche market for these panels. Compared to the 1.3 billion smartphone shipments, there are approximately 150 million tablet shipments.
JOLED, the Japanese manufacturer, which came about due to the merger of Sony and Panasonic’s OLED units, has recently filed for bankruptcy.
Japan Display, created through the merger of Toshiba, Sony and Hitachi has been reported to expect a ninth straight annual net loss.
An LG Display executive has said they plan on improving their business stability “by growing the contribution from order-based business.”