- Samsung Display’s fab restructuring is focused on Gen 7 and higher LCD panel fabs as well as Gen 6 mobile device AMOLED panel fabs.
- Samsung Display is changing its product mix at LCD panel fabs with a focus on premium monitors and ultra-large high-resolution TV panels. Meanwhile, the company is centering on flexible OLED at AMOLED panel fabs.
- Samsung Display’s fab restructuring strategy will depend on what panels new fabs will produce and whether the company will proceed with its QD OLED TV panel business.
Samsung Display shut down all Gen 6 and smaller LCD panel fabs since the second half of 2017. It sold all equipment from L7-1, one of the Gen 7 fabs that was closed at the end of 2016, and installed Gen 6 AMOLED panel production facilities in the line.
Samsung Display plans to change product mix at Gen 7 and Gen 8 fabs that are still in operation to focus on ultra-large or premium LCD panels. At L7-2, for example, the company is expected to gradually reduce output of small TV panels to concentrate on ultra-large TV panels, such as 75‑ or 82‑inch. The panel maker will ramp-up ultra-large panel production based on multi-model on a glass (MMG) at Gen 8 fabs in China. It is also upgrading its Gen 8 fab facilities in Korea to increase production of ultra-large high-resolution panels. If Samsung Display succeeds in quantum dot (QD) OLED TV panel production, a plan that is still under review, some Gen 8 fabs in Korea will likely be converted into lines for QD OLED TV panels.
Currently, Samsung Display’s Gen 6 and smaller fabs mainly produce AMOLED panels for mobile devices. It recently converted the V-1 pilot line (briefly used to manufacture RGB OLED TV panels based on LTPS backplane technology a few years ago) into Gen 5.5 A2-E to produce AMOLED panels for mobile devices. The line is scheduled to start operation in the second half of 2018.
Samsung Display aimed to kick-off mass production of AMOLED panels for mobile devices at the A4 fab in the second half of 2018, which was converted from the now-shuttered L7-1 fab, but the company is said to be considering changing its plan due to lower-than-expected demand for mobile AMOLED panels.
Samsung Display also planned to start mass production at A5, which is not a conversion from an existing line but a new fab under construction; the Korean panel maker is considering changing the mass production start date and products to be manufactured in the fab. It is said that the new fab boasts of a larger site and building than the existing AMOLED panel fabs and would play a key role in determining the company’s AMOLED business strategy.
Due to fab restructuring in recent years, Gen 7 and higher fabs account for about 80% of Samsung Display’s total capacity area as of the first quarter of 2018. Gen 6 fabs, which represent a 9% share, mainly churn out flexible AMOLED panels. Meanwhile, Gen 6 and smaller fabs have a 40% share of the capacity area of all panel makers, except Korean peers. This indicates that Samsung Display is aggressively restructuring its fabs around higher generation fabs.
Samsung Display is expected to continue to restructure its fabs with a focus on premium LCD and AMOLED panels. If it proceeds with its QD OLED TV panel business, its restructuring efforts will pick up in the future.