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Samsung Display And LG Display To Increase Plant And Equipment Investment Up To 30% In 2016
Jan 04, 2016

Samsung Display and LG Display are going to increase plant and equipment investment up to 30% in 2016 compared to 2015. Based on OLED (Organic Light-Emitting Diode) production lines’ extension, they are also going to expand supplies of LCD (liquid crystal display) according to markets’ situations. Even if plant and equipment investment for Apple’s iPhones’ flexible OLEDs is excluded, they are going to carry out investment that is slightly more than last year’s investment. If investment for Apple is confirmed, size of investment will become bigger.
According to display industries on the 3rd, Samsung Display and LG Display have temporarily decided on plans for plant and equipment investment in 2016. Both businesses’ investments exclude plant and equipment investment for Apple.
After carrying out about $2.55 billion (3 trillion KRW) in investment last year, LG Display is planning to carry out $4 billion (4.7 trillion KRW), which is about 30% bigger than 2015’s investment, in 2016.
Size of Samsung Display’s plant and equipment investment for 2016 is still unclear. However it seems that it will maintain at least $4.68 billion (5.5 trillion KRW) which is about same as 2015’s investment. If investments for A3 Line’s flexible OLED are considered, it is likely that it will invest somewhere between later-end of 6 trillion KRW (5.10 billion KRW) and beginning-end of 7 trillion KRW(5.95 billion KRW) that are about 20% increase from 2015’s investment.

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<Samsung Display and LG Display are going to increase plant and equipment investment up to 30% in 2016. Picture shows LG Display’s Paju Factory. >

2016’s major area for investment is OLED.
LG Display is planning to use between $851 million and $1.19 billion (1 trillion KRW and 1.4 trillion KRW) on new P10 Line, which is being constructed in Paju, in 2016. It also included investments for Gen. 6 Flexible OLED Line (E5) that is planning to start its operation in first half of 2017. E5 is planning to produce 75 million sheets per month at first.
LG Display is also considering about extending Gen 8.5 LCD Facility that is in Guangzhou. It is currently capable of producing 90,000 sheets per month, and LG Display is discussing about expanding its production capability to 100,000 sheets and maximum of 130,000 sheets per month in 2016. However because prices for 32-inch LCD as well as 50-inch LCD are rapidly decreasing, financial burdens for additional investments are huge.
It is likely that Samsung Display will carry out 2nd step of investments on A3 Line in 2016. Although it was planning to carry out plant and equipment investment of 15,000 sheets per month in first half of 2015 initially, it postponed its plan due to changes in processes and others. It is planning to prepare facilities for flexible OLED, and it size will exceed $851 million (1 trillion KRW). It changed LCD Line from Gen.5 L6 to oxide-based LCD.
Both businesses have yet to decide on detailed sizes of plant and equipment investment regarding OLED panels that will be supplied to Apple. Markets are estimating that they will need about $12.8 billion (15 trillion KRW) for plant and equipment investment for next 2 to 3 years.
It seems that Chinese panel industries are planning to continue their plant and equipment investments in 2016. Due to these investments, there are possibilities major devices such as deposition, package, heat treatment, light exposure and other devices can temporarily suffer lack of supplies. 
“Although it is positive to see number of large-sized plant and equipment investments increase while global economies are struggling, it is impossible to respond to all ordered supplies by increasing size of investment by a lot momentarily.” said a person related to display device industry. “It is wise to compete by looking at overall trend and strategically choosing businesses that can be successful.”