Samsung Display ponders US$2.5 billion investment in Bac Ninh

The move say industry insiders is in response to growing demand for smartphone display panels, the biggest growth segment in the display business, especially the smartphone segment.

According to multiple industry sources, the display-making subsidiary of Samsung Electronics Co has been engaged in a series of ongoing negotiations with the Vietnam government over expanding its current factory in the Southeast Asian country for some time.

Samsung Display, say the representatives, had already invested roughly US$4 billion in the facility in 2016.

The negotiations are reportedly centred around potential tax breaks or other concessions in return for the Republic of Korea based manufacturers additional investment in Bac Ninh Province in northern Vietnam.

Samsung Display started construction of display panel production facilities in late 2014 on unused land at Samsung Electronics’ plant in Bac Ninh Province and began production in March 2015.

The OLED display modules produced in Bac Ninh Province are used to supply Samsung Electronics’ manufacturing plants located in the provinces of Bac Ninh and Thai Nguyen.

Industry insiders have speculated that the Vietnam government and the management of Samsung Display would come to some formal agreement during the first quarter of 2017 at the earliest.

Industry watchers observe that Samsung Display had appropriated US$8.4 billion in the budget through the end of 2016 to ramp up organic light-emitting diode (OLED) panel production.

Not all the US US$8.4 billion had been expended as of the start of 2017, however. The contemplated US$2.5 billion investment in a Vietnam factory would be an additional appropriation.

Samsung Display also plans to transform its seventh-generation liquid crystal display (LCD) production line L7-1 in Tangjeong, South Chungcheong Province, the Republic of Korea into OLED production line.

To meet the growing demand for OLED panels, the manufacturer invested more than US$4.9 billion to boost its production capacity of OLEDs for smartphones in the fourth quarter of 2016.

In particular, the Samsung Display will sharply up investment in high-value added OLED displays such as the so-called ‘Quad Edge Display,’ which was featured on Samsung Electronics’ Galaxy S7 series. The curved OLED panel is also expected to be fitted with the upcoming Apple iPhone series in the second half of 2017.