Samsung Display to build $1.8 billion OLED plant in Vietnam
Eui-Myung Park
Sep 24, 2024 (Gmt+09:00)
Samsung Display's booth at IMID 2023 exhibition Samsung Display Co., a leading South Korean display maker, will build a $1.8 billion organic light-emitting diode (OLED) line in Vietnam for small- to medium-sized panels used in laptops and tablets.
Earlier this week, Samsung Display Vietnam (SDV) signed a memorandum of understanding with Bac Ninh Province authorities to build the plant in Yen Phong Industrial Park, east of Hanoi in the province, according to Vietnamese and foreign media reports.
The move comes 18 months after the display unit of tech giant Samsung Electronics Co., announced it would spend 4.1 trillion won ($3.1 billion) to build an 8.6th-generation OLED plant in Asan, Korea.
Samsung Display already operates a small- to medium-sized OLED module plant and a foldable display production line in the industrial park in Bac Ninh.
The new factory in Vietnam will handle back-end assembly work from 2026, annually processing some 10 million 8.6th-generation OLED panels, manufactured at the Asan plant in Korea.
(Graphics by Dongbeom Yun) Currently, Samsung Display produces OLED components at its Korean plant, while its factories in Vietnam and China handle the module attachment and final assembly work.
According to media reports, the planned investment in Vietnam would raise Samsung Group's total investment in Bac Ninh to $8.3 billion from the current $6.5 billion.
VIETNAM OVER CHINA: STRATEGIC CHOICE
Samsung Display’s decision to expand its facilities in Vietnam is seen as a strategic move to reduce risks stemming from the US-China trade conflict and to position the Southeast Asian country as its key display production hub.
Samsung Display’s 7.2-inch S-foldable multi-fold OLED panel Sources said panels to be produced at the new Vietnamese plant would be used for smaller tech devices such as laptops and tablets – sectors where OLED adoption is just beginning to take off, unlike smartphones where OLED has become mainstream.
Over the past decade, Vietnam has emerged as an attractive hub for electronics manufacturing, and Samsung has been at the forefront of this growth. Samsung Group has already established six manufacturing plants, a research and development center and a sales entity in Vietnam.
CHINESE ONSLAUGHT
Samsung’s OLED push in Vietnam comes as Korean display makers, including LG Display Co., struggle to compete with their fast-rising Chinese rivals.
Samsung Display's laptop panels Back in the mid-2000s, Korea led the global liquid crystal display (LCD) TV panel market with Samsung and LG accounting for nearly half of global shipments of such displays.
However, Chinese players, led by BOE Technology Group Co. (BOE) and China Star Optoelectronics Technology Co. (CSOT), emerged as formidable competitors, armed with generous state subsidies.
Under pressure, Samsung abandoned its LCD business and withdrew from the market in 2020, citing worsening profitability. It sold its Suzhou LCD factory in 2021.
Korean display makers are shifting their focus to OLED panels, in which they have a competitive edge over Chinese companies in terms of manufacturing technology.
OLED, MAINSTREAM PANEL
OLED is highlighted by self-illuminating pixels that do not require a separate light source, allowing manufacturers to produce lightweight, thin and flexible display products, appealing to high-end consumers.
LG Display's OLED screens displayed at an exhibition booth As the global OLED market is forecast to grow to 460 trillion won by 2034, China’s BOE is building an 8.6th-generation panel line in Chengdu with 63 billion yuan ($8.9 billion) in investment.
In the small-to-medium size OLED segment, Samsung Display ranked top, controlling over 50% of the market at the end of 2023.
With Chinese firms’ aggressive investment, Samsung’s market share fell to 44% as of the first half of this year, followed by BOE at 16%, Visionox at 11.3%, CSOT at 10% and Tianma (9%).
LG Display is also spending heavily to compete with Samsung and Chinese rivals.
In March, it raised 1.3 trillion won through a rights issue. The company plans to invest this along with 2 trillion won in proceeds from the sale of its Guangzhou LCD factory into next-generation OLED production facilities.