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        Operation Rate of Samsung Display’s Rigid OLED Production Lines Drops up to 50%

        Jan 31, 2018

        Samsung Display’s rigid OLED business is becoming less active. It is clear that its rigid OLED business is struggling within Smartphone markets due to LTPS (Low-Temperature Polycrystalline Silicon) LCD as Chinese Smartphone manufacturers are mostly choosing LTPS LCD, which costs less than rigid OLED, over rigid OLED as they implement full screens that are the latest trend.
        According to industries on the 30th, Samsung Display recently lowered operation rate of its A1 and A2 lines, which are rigid OLED production lines, up to 50%.
        It stopped operating part of A1 line that produces fourth generation rigid OLEDs. Operation rate of A2 line, which mainly produces 5.5th generation rigid OLEDs and partially produces flexible OLEDs, also dropped as part of its line has come to a halt. It is heard that Samsung Display decided to stop operations of these lines until Korea New Years’ holiday season and is currently preparing for solutions.
        Price of rigid OLED has dropped continuously since last year as it competed intensely with LTPS LCD. When price of LTPS LCD dropped as production capabilities of LTPS LCD increased in Taiwan, Japan, and China, rigid OLED markets have started to lose grounds. Although manufacturing cost of rigid OLED dropped to similar level of LTPS LCD, competitions between these two markets for better price are still very competitive as price of LTPS LCD continues to drop.
        As Chinese Smartphone manufacturers are mostly choosing LTPS LCD over rigid OLED, sales volume of rigid OLED dropped as a result. Industries believe that Chinese Smartphone manufacturers are choosing LTPS LCD because it can help them to reduce manufacturing cost and it does not have much difference with rigid OLED when it comes to design.

        Samsung Display’s A1 production line (Picture = Samsung Display) <Samsung Display’s A1 production line (Picture = Samsung Display)>

        “Although number of demands for flexible OLEDs increased by Chinese Smartphone manufacturers, Samsung Display was not able to satisfy such demands as it supplied its products to mostly Samsung Electronics and Apple.” said a representative for an industry. “It seems that Chinese Smartphone manufacturers are preferring LTPS LCD over rigid OLED as it looks similar in design as rigid OLED and it is cheaper than rigid OLED while being able to implement full screens and high resolution.”
        Reason why price of LTPS LCD continues to drop is because amount of output of LTPS LCD increased from Taiwan, Japan, and China in 2017. Output increased as AUO, BOE, Foxconn, and Tianma extended their 6th generation LTPS LCD plants and started to operate them starting from the second half of 2016. Price naturally dropped, and profitability of LTPS LCD has become worse along with rigid OLED. Industries are seeing that currently LTPS LCDs are supplied under the level of production cost.
        Although Samsung Display is considering a plan that will have A2 line produce entire flexible OLEDs, it seems that Samsung Display has yet to come up with a clear plan because production capability of flexible OLED will increase as Samsung Display is set to operate L7-1 line, which converted to a flexible OLED line after being a LCD line, during the first quarter and operation rate of A3 line also dropped recently. It is stuck in double whammy as it needs to secure customers for flexible OLED as well as rigid OLED.
        “It seems that A1 plant converted into OLED production line for cars and Samsung Display is looking into operating A1 plant as R&D line for flexible OLEDs.” said a representative for an industry. “Samsung Display is preparing strategies such as applying notch-cut design to rigid OLED and others that will increase added values.”
        Staff Reporter Bae, Okjin | withok@etnews.com

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