Samsung Display and LG Display are expected to spend conservatively on expanding their OLED production capacities in the second half of the year, according to multiple sources working at South Korean equipment makers.
There are some expectations that the pair may start investing more on OLED panels from increased use of the panels in a variety of sectors and new customers, but market conditions remain uncertain, which means they will likely spend conservatively, the sources said.
Samsung Display is expected to start spending to convert its L7-2 liquid crystal display (LCD) line into a one for smartphone OLED panels. The company is reviewing whether it would spend on OLED panels for IT application (that is, for PCs) at the current time.
Meanwhile, LG Display is reviewing whether to invest in an IT OLED line and a Gen 10.5 (2940x3370mm) OLED line
Samsung Display is planning to remove all LCD related equipment from L7-2 by next month. The line will converted to a Gen 6 (1500x1850mm) flexible OLED line. It will expanding the OLED line in two stages. The first in the second half of this year will add 15,000 substrates per month in capacity. Another 15,000 substrates per month will be added in the first half of 2022.
However, the line will only manufacture low-temperature polycrystalline silicon (LTPS) thin-film transistor (TFT) OLED. This is because the company is using LTPS TFT equipment enough for 30,000 substrates per month left over from its A3 line, which has now been converted to produce low-temperature polycrystalline oxide (LTPO) TFT OLED. The conversion of L7-2 will allow Samsung Display its product rate for LTPS TFT OLED.
At A3, the LTPO TFT OLED are being made for Galaxy smartphones and iPhones.
For IT OLED panels, Samsung Display is considering converting its L8-1-2 LCD line, or using its A5 line, which has halted production temporarily as of now. Samsung Display has been developing the equipment needed IT OLED with a partner. It is waiting to place orders for them. If Samsung Display decides to give the go-ahead for the IT OLED line, spending will likely start in the first half of 2022.
Meanwhile, Samsung Display is yet spend more on quantum dot (QD)-OLED. It will likely decide whether to spend more on QD-OLED capacity after customer review is completed, as well as when production of the panels start at its current capacity in the fourth quarter. Q1 line, where QD-OLED panels are made, currently has a capacity of 30,000 Gen 8.5 (2200x2500mm) per month. Q1 line was previously the L8-1-1 line that use to manufacture LCD.
LG Display is likely to invest in a new IT OLED line first before a new Gen 10.5 line. The IT OLED line will manufacture OLED panels for Apple’s iPad. Cupertino is planning to launch an iPad with a OLED panel for the first time next year. Samsung Display will be the sole supplier of OLED panels for the tablet. LG Display will start supplying in 2023. LG Display is currently making samples of IT OLED panels and testing the,
LG Display was also reviewing whether to build a Gen 6 line or a Gen 8.5 line for IT OLED. The capacity of the line will start at 15,000 substrates per month.
When LG Display spend on Gen 10.5 OLED line will likely be effected by Samsung Electronics’ decision. If Samsung demands millions of units per year, LG Display will likely decided to build a new Gen 10.5 OLED line in September. LG Display is currently expanding its Gen 8.5 OLED line at Guangzhou, China from 60,000 substrates per month to 90,000 substrates per month. Unless Samsung orders in huge quantities, it has now need to build another OLED line for TVs. A new Gen 10.5 OLED line will also likely start with a capacity of 15,000 substrates per month.
Meanwhile, for OLED for iPhones, LG Display is operating two lines at its Paju plant __ the E6-1 and E6-2. E6-3, which it is putting equipment in, will start operations next year. LG Display is expected to ship 50 million OLED panels to Apple this year, so E6-1 and E6-2 is sufficient to handle this.
Considering all this, Samsung Display and LG Display’s spending will likely stay conservative this year. South Korean equipment makers are expecting low orders in the second half of the year. Chinese panel makers are also expected to focus on improving yield rates at existing lines instead of spending more to make more.