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        Chinese Display Manufacturers Speeding Up Their Investments into OLED Facilities

        Jan 30, 2018

        While South Korean display businesses have been hesitant on making more investments into OLED facilities, Chinese businesses are making investments earlier than their initial plans. This phenomenon is taking place because while Apple, which has been purchasing South Korean OLEDs, has made slow progress on its performance, rapid progress of performance of Chinese Smartphone manufacturers has become more noticeable.
        If this trend continues, it is expected that Chinese businesses will quickly close the gap on OLED business as well as LCD business between themselves and South Korean businesses. It is likely that South Korean display industries will continue their momentum on their investments by going away from a structure that has depended on small amount of Smartphone manufacturers such as Samsung Electronics and Apple.
        According to industries on the 29th, Samsung Display has yet to decide on the timing of its investments on its new OLED plant called A5. As number of demands for flexible OLEDs is on the fall due to recent low sales of iPhone X, need for extension of plants is also fading away. Although it was expected that Samsung Display will decide on its plan for investments during the first quarter, it is likely that its decision will be put off from day to day.
        On the other hand, Chinese businesses are quickly expanding their OLED facilities. Some of them even moved up the timing of their investments by almost a year earlier than their initial plans. BOE, which is China’s biggest panel manufacturer, is going to move up the timing of its second stage of investment for B11 line from the fourth quarter of 2019 to the third quarter of 2018. BOE is planning to order second stage and third stage of investment for B11 line during early 2018 and early 2019 respectively. Basically, it has moved up its initial plan by about a year.
        BOE decided to make additional investments into B13 and B14 lines in Chengdue in addition to its 6th generation flexible OLED lines called B7 and B11. It was brought up that names of its two new lines may be changed to B15 and B16 respectively.
        It seems that the first investment for its B12 line, which is already decided, will be carried out during this fourth quarter. BOE is planning to produce mainly OLEDs from B11 and B12 lines in order to supply them to Apple. Although it is chosen as an official supplier of Apple, it is working aggressively to become one.
        GVO (Go VisionOx) is also preparing a new 6th generation flexible OLED line in Nanjing in addition to its current 5.5th generation and 6th generation lines. It seems that CSOT is planning to order equipment for second stage of investment for its T4 line, which is in Wuhan, during upcoming second quarter. CED Panda is also likely to start its investments into 6th generation OLED facilities starting from the second quarter.
        On the other hand, foundation for investments made by South Korean panel manufacturers into 6th generation OLED facilities has become significantly smaller than last year. Samsung Display as well as LG Display are estimating that they will make investments for Smartphone OLEDs in which the amount is like last year’s.
        Although LG Display is planning to invest about $8.37 billion (9 trillion KRW) into equipment and facilities this year, it is planning to focus investments mainly on large OLED lines such as P10 line in Paju and 8.5th generation OLED line in Guangzhou.
        Reason why Chinese panel manufacturers are speeding their investments into OLEDs is due to growth of Chinese Smartphone industries.
        “Although size of small and medium OLED markets has gotten smaller recently due to iPhone X, it is not enough to cool off fever of investments made by Chinese businesses.” said a representative for an equipment manufacturer. “South Korean back-end display businesses have no choice but to put all of their capabilities into winning orders from Chinese panel industries.”
        Some are pointing out that South Korean panel industries, which are depending greatly on Apple and Samsung Electronics, need to hurry up and target Chinese markets as well.
        “While South Korean panel industries have made their growths by supplying flexible OLEDs to Apple and Samsung Electronics, they were not able to satisfy demands from China.” said a representative. “They need to diversify their markets and customers.”
        Staff Reporter Bae, Okjin | withok@etnews.com

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