Samsung Display Investing $11 Billion to Combat Oversupply

An interesting fact that not a lot of people know: Apple gets its LCD screens from a company by the name of Samsung Display. However, due to a global oversupply of LCD screens worldwide, the company is in a bit of a bind. To combat this, Samsung Display has stated on Thursday that they will invest a whopping 13.1 trillion won ($11 billion), to try and combat this lack of global demand for TVs and smartphones.

Samsung Electronics’ business unit said that by the year 2025, it plans on spending 10 trillion won on various facilities. The rest of it will be pumped into the research and development wing to create more advanced display screens.

Interestingly enough, this announcement isn’t coming at a time of high demand for Liquid Crystal Display (LCD) screens. The South Korean panel makers have been struggling under the lack of demand. The problem is only compounded with a new rise in competition in the form of Organic Light Emitting Diode (OLED) panels.

A significant focus of its $11 billion investment for the next five years will be to convert one of its South Korean facilities from an LCD line into a new form of display technology. This would allow Samsung Display to mass produce “quantum dot” screens.

Overcoming Loss by Investment

Samsung Display runs a total of six display manufacturing lines, with one even in China. However, Samsung has said that it had suspended its LCD production line due to the massive oversupply going on. The company stated that they would overcome this crisis via active investment into the display industry.

Moon Jae-in, President of South Korea, and Jay Y. Lee, Elec Vice Chairman and heir to the Samsung Group conglomerate, both attended the signing ceremony for the investment. This happened on Thursday, at Samsung Display’s Asan manufacturing site within South Korea.

With this massive new investment, Samsung has set its sights on beginning operations of its “quantum dot” display line in 2021. The month capacity of display sheets would be 30,000.

Many companies, when seeing a loss on their profits, would preferably just have scaled down their global operations instead of doubling down on it. Granted, the display industry isn’t something that’s going to disappear, but it’s an interesting choice from the electronics giant. It shows their willingness to put down the money to keep themselves relevant in the display industry.

Time will only tell whether Samsung’s move was a wise one, with OLED rising to prominence as it is. Samsung won’t fail for a long time, and even if it did, it would probably just change ownership instead of collapsing in on itself. However, $11 billion is a hefty amount to throw around in any circumstance, and here’s hoping it was the right move for them.

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Ali Raza

A journalist, with experience in web journalism and marketing. Ali holds a master degree in finance and enjoys writing about cryptocurrencies and fintech. Ali’s work has been published on a number of cryptocurrency publications.

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