At a time when sales of smartphones and memory chips have stagnated, Samsung is redoubling its efforts in a somewhat forgotten area of technology: displays.
unit of Samsung Electronicsa company controlled by a billionaire Jay Y LeeThe second richest person in the ranking Forbes Among the 50 richest people in South Korea, Samsung It announced earlier this month that it plans to invest Three billion dollars Over the next three years to manufacture organic light-emitting diode (OLED) screens. This technology is already used in tablets and other electronic devices.
This announcement comes as expectedappleone of Samsung Display’s largest customers, plans to use OLED displays on its iPad tablets and MacBook laptops early next year, which analysts say will help accelerate the move away from outdated LCD technology.
“Samsung Display is taking steps upstream to invest today because once Apple starts using OLED screens for its tablets and MacBooks, the trend will shift to OLED screens as it did with smartphones when the US company started using them on its iPhones,” Kyoha meAnalyst at NH Investment & Securities. “Although the IT market is currently declining, the demand will only increase once Apple starts using these monitors.”
Samsung Electronics plans to restructure its production line at its factory in Asan, south of Seoul, to ramp up production of larger OLED screens that can be used in tablets and laptops. This will allow Samsung Display to double its production capacity for 14.3-inch screens to reach 10 million units by 2026. Currently, only high-end tablets made by Samsung Electronics and other companies use OLED screens.
The OLED display industry saw a surge in demand when Apple began using the technology in its iPhones in 2017 with the iPhone X. You might expect a similar change when the world’s most valuable company applies the technology to its iPads, as tablet sales plummet. From Apple dwarfs Samsung. . iPad shipments last year by 7% to reach 61.8 million units, making Apple the only company among the top five companies in the sector to register an increase, according to IDC. Samsung Electronics affiliated with 30.3 million unitsor 0.8% lower than the previous year.
Apple has asked an unnamed South Korean display company to develop two types of OLED screens for its iPad and two more for its MacBook, the report said. Korean Electronic Times in January, citing multiple sources including Stone Partners. Specifically, these two screens are 10.86 inches and 12.9 inches for the iPad, which is similar in size to the iPad Pro, and 14 inches and 16 inches for the MacBook, which is equivalent to the MacBook Pro. Apple could also start using OLED screens for iPads in 2024 and for MacBooks in 2026.
Demand for electronics has weakened since late last year as inflationary pressures and economic uncertainty deter consumers from purchasing electronic gadgets. Despite this, the demand for high-end products should continue.
“We are currently in a changing market dynamic,” he says. Anurupa Nataraj, Senior Research Analyst at IDC, specializing in mobility and consumer devices. While affordability and ease of use will continue to be key factors in the market, consumers are also beginning to value the importance of more advanced devices when making purchasing decisions. Therefore, vendors will need to focus on developing their tablet lineup. »
With this latest investment, Samsung Display plans to consolidate its leading position in the OLED display market and widen the gap with competitors in China, such as BOE Technology Group. Among the suppliers of OLED screens for iPhone are Samsung Display, BOE, and LGwhich is part of the conglomerate LG Billionair Ko Kwang Mo.
Despite this, some fear that overall demand for OLED displays will remain weak due to global economic uncertainty.
According to research firm Omdia, demand for OLED displays for smartphones will not fully recover until the first half of 2023, even if demand for LCD displays shows signs of recovery. “While an LCD recovery takes center stage and will clearly help support LCD prices and simultaneous capacity utilization, OLED will have to wait for a recovery in demand from the large electronics high-end audience,” he says. David Hsiehsenior director of research at Omdia.
Despite weak demand, Samsung Display seizes the opportunity to consolidate its leading position in the market. The move also comes as the South Korean government encourages companies to invest in facilities and research, especially in displays, semiconductors, electric vehicles and their batteries, to help revive the country’s economy, which saw its exports decline for the sixth consecutive month in March.
“The government will double the incentives so that companies can invest at the right time,” said the South Korean president. Yoon Seok Yul When he witnessed the investment deal struck between Samsung Display and other manufacturers of materials, parts and equipment earlier this month. We will also provide research and development support to promote OLED technology. »
Samsung Display expects to expand around 26,000 new job opportunities. South Korea’s Ministry of Trade, Industry and Energy said it will increase incentives, provide financial support and take other measures to help South Korean companies maintain their dominant position in the global OLED market.
Analysts say Samsung Display may be planning more investment as Apple is expected to introduce a foldable device soon. The South Korean company is the largest producer of flexible displays, with Samsung Electronics dominating the foldable phone market since launching the first such product in 2019.
“Although Samsung Display’s latest investment does not include those for flexible displays, the company will do so when the time is right,” said Kyohee Lee. “Samsung Display is investing to stay ahead of the market.”
Translated article from Forbes US – Author: Kyunghee Park
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