Samsung is re-evaluating its plans to build the largest OLED display factory in the world, The Bell reported earlier this week, citing sources close to the South Korean tech giant. The ambitious A5 plant that would be twice the size of Samsung's A2 and A3 factories combined would set the company back approximately $1.75 billion in construction costs alone, whereas another $14 billion would be invested in related equipment over the first three years following its creation, according to previous reports. The Seoul-based company is now said to be second-guessing the idea after unspecified data showed the global demand for smartphones isn't on a particularly strong upswing, which a number of industry trackers recently confirmed. The A5 factory would be primarily intended to manufacture small and medium-sized display panels for contemporary handsets and tablets, with its viability thus being reliant on a steady increase in smartphone shipments on an international level.
Samsung is presently dominating the mobile OLED market but is expected to face stiffer competition from numerous Chinese companies in the next several years. Coupled with a weaker demand for handsets, the firm may take a long time to make a return on its multi-billion investment, provided it manages to do so at all. Both LG and a number of Japanese companies are also expected to ramp up their OLED manufacturing operations in the near future, additionally challenging Samsung. The company is now understood to be reviewing the project from square one, recalculating all of its potential benefits and risks. It's currently unclear how long will Samsung take to reach a final decision on the matter.
Should Samsung greenlight the investment in the near future, such a move would be by far the largest financial commitment the firm made in its current, leaderless state; Samsung Group Chairman Lee Kun-hee has reportedly been in a comatose state following a heart attack in 2014 and hasn't been seen publicly since then, whereas his son and Vice Chairman Lee Jae-yong (Jay Y. Lee) spent half of 2017 under arrest on the charges of corruption, bribery, and embezzlement, having been sentenced on those counts to five years in prison last August. While Mr. Lee is presently in the process of appealing his sentence, the lack of firm leadership at the company is understood to be reflecting on its willingness to make significant investments, and that situation is unlikely to improve after the longest-serving of the three CEOs of its flagship unit Samsung Electronics leaves in March, having resigned late last year, citing an "unprecedented crisis."