Samsung Display is seeking a seven-fold increase in OLED production for Apple this year, with the new facilities starting operations this month, industry sources told ET News on Aug. 3.
The display-making unit of Samsung Electronics has installed seven production lines at its A3 plant dedicated to Apple orders only. With the expansion, the monthly capacity will surge from 15,000 sheets of the sixth-generation OLED to 105,000 sheets.
Samsung invested 9.8 trillion won (US$ billion) in the A3 plant last year that produces an additional 300,000 OLED sheets for Samsung Electronics and some Chinese handset makers. In the first half of this year, another 8.7 trillion won was poured into the plant.
The iPhone lines at its full capacity are set to produce 124 million units of the 6-inch screen and 130 million units of the 5.8-inch screen. But due to Apple’s stiff technology requirements, sources said, the yield rate has been lowered to some 60 percent, as compared to 80 percent for Samsung Electronics.
Based on the 60 percent yield rate, the panel production has been reduced to 750 million units for the 6-inch screen and 790 million units for the 5.8-inch screen. Considering about 200 million iPhones are sold annually, Apple still needs OLED supplies for more than 5 million display screens.
The US tech giant is rumored to inject 3 trillion won (US$2.7 billion) into LG Display, its secondary OLED supplier that has recently been named to secure more OLED panels. But the production is expected to start as early as the second quarter next year.
It seems unavoidable for Samsung to further increase production for Apple in the near future. Sources said the company has already started discussions for a new plant, tentatively called A5, with an initial investment worth 1 trillion won. By Bae Ok-jin (firstname.lastname@example.org) (email@example.com)Powered by ET News and The Investor