According to recent news in Korea, Samsung is planning to shut down one more LCD manufacturing plant, replacing it with equipment to manufacture organic light emitting diode (known to us as OLED) panels, the relatively new display technology which is slowly replacing liquid crystal display (LCD) panels as it provides a superior viewing experience. The latest plant on Samsung's radar is the L7 plant in Asan, South Chungcheong Province. It is the sixth plant to be re-equipped to manufacture OLED screens. Production of LCD will stop on the 30th of July, and the LCD production equipment might be sold to India-based Twinstar display, but this is still a rumor. With this development, the number of LCD manufacturing plants operated by Samsung is down from eight to just three units.
Rumors have been floating for a while that Samsung Electronics will be providing OLED screens to Apple for the new iPhone 7, and this could be their latest move to ramp up production in order to meet the increasing demands. OLED is also widely used in Samsung's new large screen TVs, although they are more expensive than conventional LCD TVs due to the cost of manufacturing OLED screen. Based on Korea's Hankyung news reports, Samsung will shut down its entire L7-1 production line by the end of the year. The L7 line provides about 15% of Samsung's LCD line-up and 3% of global LCD production.
The plant was established in 2005 and has a production capacity of 320,000 per month. The panels were mostly used for 40 inch TVs and above. Owing to Apple's switch to OLED panels, a lot of other manufacturers are also planning to up their game by shipping OLED screens with new phones. This exit puts a growing pressure on other major LCD manufacturing companies, namely Japan Display and Sharp, both of which are currently providing panels to Apple. Japan Display and Sharp are also developing their OLED production unit, with Sharp's new owner Foxconn announcing that Sharp will be ready to provide OLED screens by 2017. Analysts noted that Japanese manufacturers are lagging behind South Korean competitors in both development and mass production experience, and this might affect their impact on the growing demand for OLED technology.