Due to the shortage in supply of Galaxy S6 Edge from its higher than expected demand, Samsung Display’s worry regarding flexible AMOLED line investment is deepening.
Samsung Electronics’ announced target sales for Galaxy S6 and S6 Edge is 70,000,000 units. If the S6 Edge sales occupies approximately 40%, it is estimated that about 28,000,000 units of S6 Edge will be sold.
Samsung Display’s A2 and A3 lines can produce flexible AMOLED panel that is currently used for S6 Edge. Considering the yield and operation rate, it is analyzed that approximately 5,000,000 units can be produced from A2 in a quarter, and 7,000,000 units from A3 (A2 line = 15K, A3 line = 15K). However, as only A2 was in operation in 1Q, assuming that about 5,000,000 units were supplied, and that A3 will also be operational from 2Q, it is forecast that approximately 12,000,000 units will be supplied. Therefore, it is estimated that A2 and A3 lines have to be in full operation until 3Q to meet the demand for S6 Edge.
However, if flexible AMOLED panel is applied to the new Galaxy Note model in 4Q, the preparation for mass production needs to begin from 3Q. Hence, with the current Samsung Display’s flexible mass production capa., it looks to be difficult to meet the demand for flexible AMOLED panel. Consequently, Samsung’s additional flexible AMOLED line expansion seems unavoidable.
To establish additional capa. Samsung Display could consider replacement investment for A2 line, or expanding the A3 line. If A2 line is replacement invested, the investment cost would decrease and move up the mass production schedule. Nevertheless, the fall in the total market share has to be considered following the reduced rigid panel supply from diminished capa. of rigid AMOLED panel. If A3 line is expanded, the investment cost and time required will be higher but considering future supply to other set companies that are not Samsung Electronics, this is analyzed to be more advantageous compared to the replacement investment for A2 line.
As a result, the industry’s attention is focused on how Samsung Display will choose between A2 line and A3 line, or if both will be carried out.
By DaRae Kim, firstname.lastname@example.org