Samsung Electronics has confirmed reports that its Samsung Display business is to make a colossal investment in screen production, despite a global oversupply issue.
Last month Yonhap news agency had reported that Samsung Display was going to investment 13 trillion won ($11bn) to upgrade its South Korean liquid crystal display (LCD) plants, in order to allow it to manufacture more advanced screens.
And now it has been confirmed that Samsung Display is to invest 13.1 trillion won ($11 billion) on facilities and research to upgrade a production line.
According to Reuters, Samsung Display said that by 2025 it will spend 10 trillion won on facilities and the rest on research and development to produce more advanced display screens.
This comes after it was revealed in August that Samsung Display was suspending one of its liquid crystal display (LCD) production lines due to oversupply issues.
At the moment, it currently operates six display manufacturing lines, as well as an LCD production line in China.
The $11 billion spending for the next five years will be focused on converting one of its South Korean LCD lines into a facility to mass-make more advanced “quantum dot” screens, Samsung Display reportedly said in a statement.
“Our company plans to overcome the crisis of the large-scale display industry through active investments,” it said.
Samsung plans to begin operation of its newly upgraded “quantum dot” line from 2021 with a monthly capacity of 30,000 sheets, according to the company.
South Korea’s panel makers have been dealing with an oversupply problem in recent years.
This was evidence earlier when research house IDC recently warned that there had been a worldwide slowdown of smartphones shipments, as evidenced by the latest financial reports from the likes of Apple etc.
There has been a slowdown in the shipments of televisions in recent times as well, which is not helping matters.
The LCD oversupply issue for Samsung is not being helped by increasing competition from Chinese rivals, as well as a shift towards more advanced OLED (organic light emitting diode) panels.
Local rival LG Display for example has recently converted one of its LCD production lines to an OLED production line. And it apparently announced last week a voluntary redundancy program for domestic production line employees amid mounting financial losses.
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