Samsung reportedly spending $21B to expand OLED capacity for 'iPhone 8,' future devices

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in iPhone
Possibly flush with OLED screen orders for the "iPhone 8," Samsung is reportedly beefing up its production capacity by building new factories at a pair of new sites in South Korea.




Citing sources within the supply chain, ET News claims that Samsung has started planning a new "A5" plant with capacities between 180,000 and 270,000 panels per month. The plants said to be located in Cheonin and Asan, South Korea are expected to cost around $1.75 billion for the facility alone, and another $14 billion for equipment for OLED fabrication, with total costs for the two facilities coming in at around $21 billion.

Friday's report is similar to one from April, which claimed that Samsung would have to dole out $8.8 billion in 2017 to boost capacity and convert a LCD plant to produce OLED screens.

The ET News report claims that this new factory is being built in anticipation of further demand from smartphone manufacturers, and mass-production of 10-inch foldable displays.

Also in April, reports started circulating about a ramped-up OLED contract between Apple and Samsung. The contact, confirmed by multiple sources inside the supply chain, is said to be an escalation of the $4.3 billion one signed in February for 60 million panels.

The current "A3" plant builds 180,000 screens per month, according to the report. The plans for the new facilities are reportedly not set yet, with a board of directors meeting scheduled for July to hammer out the details.

Apple's "iPhone 8" is expected to be revealed alongside the "iPhone 7s" family in the fall of 2017, and use a 5.8-inch edge-to-edge OLED panel with a 5.1-inch practical area, the rest being dedicated to virtual buttons. Other features rumored to be included in the device are a 3D facial scanner, and other sensors embedded in the front glass of the device.

Comments

  • Reply 1 of 17
    gatorguygatorguy Posts: 21,112member
    For a $21B investment they must be anticipating a crapload of those Samsung foldable screens! If there's anything to it I guess everyone selling smartphones is planning for "the next big thing": Compact foldable phones with huge displays? 
  • Reply 2 of 17
    macxpressmacxpress Posts: 4,979member
    So they're not building this in the US? Whatever happened to were going to bring factories back to the USA? You can't just being assembly plants back to the US...you should be looking to bring as much as possible to the US if you want assembly in the US. Otherwise, while things are assembled in the US, its still sourced 98% from other countries so there is a shitload of jobs that could have been here that are elsewhere.
  • Reply 3 of 17
    macxpress said:
    So they're not building this in the US? Whatever happened to were going to bring factories back to the USA? You can't just being assembly plants back to the US...you should be looking to bring as much as possible to the US if you want assembly in the US. Otherwise, while things are assembled in the US, its still sourced 98% from other countries so there is a shitload of jobs that could have been here that are elsewhere.
    Samsung is going to build a 'white goods' factory in the US. That will keep the Tweeter in Chief happy.
  • Reply 4 of 17
    macxpress said:
    So they're not building this in the US?
    Samsung is not an American company.
    netmage
  • Reply 5 of 17
    Going to be funny when Apple switches to microLED in a couple years.
    slprescottanton zuykovnetmage
  • Reply 6 of 17
    Herbivore2Herbivore2 Posts: 362member
    gatorguy said:
    For a $21B investment they must be anticipating a crapload of those Samsung foldable screens! If there's anything to it I guess everyone selling smartphones is planning for "the next big thing": Compact foldable phones with huge displays? 
    Just the demand from Samsung mobile and Apple would justify this investment. 

    The other mobile device manufacturers are still going to be left in the cold. 

    The entire mobile market is going to move to bendable and foldable devices. The real caveat is that they will only be available in large numbers from Samsung and Apple. LG can produce them also, but to a much smaller degree. The Chinese OEMs will have to pay through the nose to access the technology and cannot produce low cost devices to undercut Samsung's and Apple's offerings. Samsung is nearly untouchable now with respect to the technology. This is going to bite Google hard. Like getting caught in the jaw of an alligator. 

    Short of a North Korean invasion, there will be only two dominant players in mobile. Samsung and Apple. Android is still going to be displaced. Samsung is committed to it and as the dominant components manufacturer with control of all of the critical component technologies, they are well-positioned to make it happen. It is already happening in the Android wear arena. Samsung continues to aggressively update and advance the Gear line while the android wear manufacturers are sluggish and poorly committed. The Gear S3 classic now comes with LTE. It is far better than anything made by Huawei, LG or Xiaomi. Manufacturers are actually decommitting from Android wear as Motorola has no plans to manufacture future watches. 

    And with LTE, the Gear watches stomp all over the Android wear devices in battery life. Tizen runs like a champ on low end hardware also. 

    Samsung knows where the market is headed. And they are pioneering the hardware to make it happen. Google hypes the software, but the fact remains unchanged, superior hardware is where the true advances come from. Software can only be written to the capabilities of the hardware. Samsung knows it. Apple knows it. Google is about to become painfully aware of it. 
    patchythepiratebadmonk
  • Reply 7 of 17
    gatorguygatorguy Posts: 21,112member
    Going to be funny when Apple switches to microLED in a couple years.
    If both the report and investment number is accurate this isn't being done simply to get Apple's business. At $40-60 max per OLED display (that's based on my reading of quantity pricing reported in other product cost breakdowns) Apple wouldn't possibly buy enough to make it worthwhile even if Sammy got ALL their business which Apple seems to try and avoid anyway. At $60 a pop times 80M units the total revenue from Apple might hit $5B and even that's far more than Samsung would actually realize in profit. Apparently they have determined there's a heckuva market outside of Apple for whatever OLED product they're developing even if they get only a portion of industry orders. 

    ...if the report is true. :/
  • Reply 8 of 17
    gatorguy said:
    Going to be funny when Apple switches to microLED in a couple years.
    If both the report and investment number is accurate this isn't being done simply to get Apple's business. At $40-60 max per OLED display (that's based on my reading of quantity pricing reported in other product cost breakdowns) Apple wouldn't possibly buy enough to make it worthwhile even if Sammy got ALL their business which Apple seems to try and avoid anyway. At $60 a pop times 80M units the total revenue from Apple might hit $5B and even that's far more than Samsung would actually realize in profit. Apparently they have determined there's a heckuva market outside of Apple for whatever OLED product they're developing even if they get only a portion of industry orders. 

    ...if the report is true. :/
    You are right in that they aren't counting only in Apple but they are also doing this as a multi-year investment they may only get $4-5 billion this year from Apple but multiply that for a couple of years and the investment looks better. 
    netmage
  • Reply 9 of 17
    foggyhillfoggyhill Posts: 4,767member
    Apple and Samsung are frennemies

    samsung Is able to try things because they know apple will be a client

     both apple and Samsung are the main beneficiaries of this but others are too.
  • Reply 10 of 17
    macxpressmacxpress Posts: 4,979member
    macxpress said:
    So they're not building this in the US?
    Samsung is not an American company.
    So...neither is Toyota, Nissan, Honda, etc yet they all have factories in the US. 
  • Reply 11 of 17
    wizard69wizard69 Posts: 12,866member
    gatorguy said:
    For a $21B investment they must be anticipating a crapload of those Samsung foldable screens! If there's anything to it I guess everyone selling smartphones is planning for "the next big thing": Compact foldable phones with huge displays? 
    Someplace on the net is a great video where Apple highlights what might be possible in the future as tablets go.    In any event foldable displays have been desired for decades now.   


    Update 

    Found the video of Apples "Navigator" concept video:   While iPad isn't yet foldable it has in some ways eclipsed this concept video.   The real problem is that AI technology simply isn't far enough along to realize some of the behaviors described in the video.   However it looks like Apple is aggressively attacking the AI problem.   So the desire for foldable displays has been around since 1987, we may actually see the tech debut in a year or two.

    If Apple could get iOS to the point that the Navigator video alludes too they would sell one hell of a lot more iPads.    
    edited July 2017
  • Reply 12 of 17
    pk22901pk22901 Posts: 139member
    gatorguy said:
    Going to be funny when Apple switches to microLED in a couple years.
    You are right in that they aren't counting only in Apple but they are also doing this as a multi-year investment they may only get $4-5 billion this year from Apple but multiply that for a couple of years and the investment looks better. 
    That's $4-$5B for year 1, Y2 will be $8 or so, Y3 will be $12, Y4 probably $12 as the 7 iPhone models are displaced by the 8s and the 9s.
  • Reply 13 of 17
    gatorguygatorguy Posts: 21,112member
    pk22901 said:
    gatorguy said:
    Going to be funny when Apple switches to microLED in a couple years.
    You are right in that they aren't counting only in Apple but they are also doing this as a multi-year investment they may only get $4-5 billion this year from Apple but multiply that for a couple of years and the investment looks better. 
    That's $4-$5B for year 1, Y2 will be $8 or so, Y3 will be $12, Y4 probably $12 as the 7 iPhone models are displaced by the 8s and the 9s.
    ...but not PROFIT. Even your figures assume Apple keeps all their orders with them, or using OLED at all 4-5 years from now. I don't personally think a $21B investment if true is because of Apple. I'm sure Samsung has learned not to plan around orders from them several years out with processors already moved to a different supplier. 
  • Reply 14 of 17
    macarenamacarena Posts: 364member
    Samsung burnt its fingers really bad on phones that caught fire. At this point, they are probably one or two disasters away from a total belly up scenario.

    Yes, they have locked up the future of hardware - but the reality is that the game has shifted completely to ecosystem. And in that space, Apple, Amazon and Google have gone way ahead of what Samsung can ever hope for. Even if Tizen is actually better than Android, it is unlikely that Samsung can ever create the developer ecosystem for Tizen that Apple and Google have.

    In couple of years, the hardware will reach a point where it no longer matters. All hardware will be so good, that differentiation from hardware will cease to matter. With displays being the biggest battery guzzlers, in 2 years time, phone battery life will cross a point where it no longer is a concern. At which point, prices for even the most fancy hardware will start to drop.

    Effectively, the only thing Samsung is doing, is bearing the costs and the risks for Apple and others to adopt future technologies. Not a smart strategy by any stretch.
  • Reply 15 of 17
    macarenamacarena Posts: 364member
    Apple is in a sweet spot, where they can easily say, we decided to continue with regular LED screens for this generation also, to take advantage of price drops, and to increase margins as well as provide lower prices to end users. Also, we want higher volumes than what we can handle with OLED.

    And if Apple decides something like that, Samsung would be screwed. They need Apple more than Apple needs them.
  • Reply 16 of 17
    badmonkbadmonk Posts: 831member
    gatorguy said:
    Going to be funny when Apple switches to microLED in a couple years.
    If both the report and investment number is accurate this isn't being done simply to get Apple's business. At $40-60 max per OLED display (that's based on my reading of quantity pricing reported in other product cost breakdowns) Apple wouldn't possibly buy enough to make it worthwhile even if Sammy got ALL their business which Apple seems to try and avoid anyway. At $60 a pop times 80M units the total revenue from Apple might hit $5B and even that's far more than Samsung would actually realize in profit. Apparently they have determined there's a heckuva market outside of Apple for whatever OLED product they're developing even if they get only a portion of industry orders. 

    ...if the report is true. :/
    sorry Gatorguy but at a production ramp of 200-300k panels/month/factory there is not going to be much left for your buddies at Google.
  • Reply 17 of 17
    gatorguygatorguy Posts: 21,112member
    badmonk said:
    gatorguy said:
    Going to be funny when Apple switches to microLED in a couple years.
    If both the report and investment number is accurate this isn't being done simply to get Apple's business. At $40-60 max per OLED display (that's based on my reading of quantity pricing reported in other product cost breakdowns) Apple wouldn't possibly buy enough to make it worthwhile even if Sammy got ALL their business which Apple seems to try and avoid anyway. At $60 a pop times 80M units the total revenue from Apple might hit $5B and even that's far more than Samsung would actually realize in profit. Apparently they have determined there's a heckuva market outside of Apple for whatever OLED product they're developing even if they get only a portion of industry orders. 

    ...if the report is true. :/
    sorry Gatorguy but at a production ramp of 200-300k panels/month/factory there is not going to be much left for your buddies at Google.
    Whew... Well that's fortunate since I have no buddies at Google. :) Never met anyone associated with them for that matter. 
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