South Korean panel maker Samsung Display, a subsidiary of Samsung Electronics Co Ltd. that develops and manufactures display panels, have announced this week their intention to cease LCD panel production by the end of 2020. The company runs two LCD production lines at factories in South Korea and two LCD-only factories in China.
This would would mark the departure of one of the key panel providers from LCD desktop monitors as well as from the LCD TV space. Samsung currently make a range of LCD panels for monitors, primarily based on their SVA (VA-type) and PLS (IPS-type) technologies. Many of which (e.g. 49″ ultrawide) are fairly niche segments at this time for them. Much of this article is focused on the TV market and there is not much clarity on what this might mean for the desktop monitor market at this time.
Re-focus on Quantum Dot Displays and OLED
Samsung Display will instead reportedly re-focus their production line on other technologies such as Quantum Dot, AMOLED and OLED reports say. Existing Samsung QLED-branded TV’s currently use LCD panels behind a Quantum Dot layer, with the “QLED” term being largely a marketing gimmick which makes them sound and read like “OLED”. Samsung dropped out of actual OLED (Organic Light Emitting Diode) production in 2015 leaving that segment to manufacturers like LG.Display who are the sold producer of OLED panels for TV’s at the moment.
Samsung had already suspended one of its two LCD production lines in South Korea in October 2019 amid falling demand for LCD panels and LCD panel prices declining worldwide as Chinese competitors ramp up production. LCD prices have plunged in recent years as Chinese makers, backed by generous state subsidies, aggressively expanded production capacity. Sluggish demand for large TV sets amid a global economic slowdown and the U.S.-China trade war has also weighed on prices.
Samsung will invest 13.1 trillion won (~$10.72 billion) in facilities and research to upgrade a production line, as it contends with oversupply amid weak global demand for smartphones and TVs. The investment for the next five years will be focused on converting one of its South Korean LCD lines into a facility to mass produce more advanced “quantum dot” screens. Samsung has not yet decided on the future operation of its factories in China.
We know that longer-term Samsung are working on developing self-emissive quantum dot diodes which would remove the need for a separate layer. Although reports say that “the commercialisation of displays that uses quantum dot in this way as the light source is still far away, and may never be realised at all as there are mountain of challenges ahead“. These self-emissive Quantum Dot diodes could be several years away still if they ever appear and are viable.
In the meantime the production of the first iteration of new QD displays will begin in 2021, but will be QD-enabled OLED, which uses organic material as the light source and QD material as a film. It will be more similar to Samsung’s own AMOLED used for mobile phones and LG’s OLED TVs and will mark the company’s return to the OLED segment. It’s unclear how these new panels would be branded when they hit the market in TV’s, but it seems likely the term “QLED” would need to be changed given that is currently used for LCD+QD panels. “QD-OLED” seems a likely candidate.
It is expected that commercial products using the new panels will likely enter the market in 2022. The arrival of new OLED TV panel options from Samsung Display would mean competition for LG.Display of course, and provide alternative options for large TV manufacturers.
Accelerated Closure Timelines
Digitimes reported earlier this week that Samsung Display reportedly plans to shut down four of its LCD panel production lines ahead of schedule as early as Q3 2020. Citing the ongoing coronavirus pandemic as a driver for this earlier closure due to reduced demand on TV’s due to major sporting events like the Olympics being postponed, as well causing downward pressure on panel prices. Digitimes reports that ” Samsung Display also plans to keep production at its 8.5G LCD fab in Suzhou, China in the meantime, while overhauling its L7-2 fab for production of POLED panels and its L8 fab for QD-OLED panels”
Digitimes goes on to report that “The Korean panel maker is also looking to halt the operations of the Suzhou 8.5G line by the third quarter of 2022 and is currently in talks to sell the LCD panel plant to Chinese panel makers, said the sources, adding that the completion of a deal will mark Samsung Display ‘s exit from the LCD TV panel market. “ – which actually implies some production would continue until Q3 2022, although some lines will end earlier in Q3 2020.
Supply of Panels and Samsung’s TV Line-up
“We will supply ordered LCDs to our customers by the end of this year without any issues,” the company said in a statement. Although Samsung Display says that it will be able to continue supplying its existing LCD panel orders until the end of the year, there are questions about what Samsung Electronics, the largest TV manufacturer in the world, will use in its LCD TVs going forward. They have stated that for now nothing changes and they do not expect supply issues to affect their current “QLED branded” TV line up.
One alternative is that Samsung buys its LCD panels from suppliers like TCL-owned CSOT and AUO, which already supply panels for Samsung TVs. Last year The Elec reported that Samsung could close all its South Korean LCD production lines, and make up the difference with panels bought from Chinese manufacturers like CSOT, which Samsung Display has invested in.
The Impact to the monitor market?
Most of the reports about this change at Samsung Display are focused on the TV market, where OLED is already a commonly used technology. There are still questions around what this might mean for the desktop monitor market. We have yet to see any small/medium sized OLED panels of any notable mention in this segment, and it’s uncertain whether Samsung’s re-focus on QD-OLED and future QD technologies would extend to this space. It’s possible that they would begin to develop QD-OLED panels in smaller sizes to replace their current desktop monitor LCD panel line-up. Although it’s equally possible they would just move away from this segment and leave it to other providers like AUO, Innolux and new players like Panda for instance.
LG.Display also following suit in South Korea
Samsung Display’s cross-town rival LG Display Co Ltd said earlier this year in January that it will halt domestic production in South Korea of LCD TV panels by the end of 2020. LG Display operates two LCD TV production sites, one in South Korea and another in China.
“We will be wrapping up our LCD TV production in South Korea by end of this year and focusing on our LCD TV production in China,” CEO Jeong Ho-young said at the annual CES trade show in Las Vegas. While terminating domestic LCD TV production, LG Display aims to shift its focus to organic light-emitting diode (OLED) technology in China.