Why Samsung would rather cut production of OLED panels than
Updated : 2018-08-28

  Foreign media reported that after Apple's order to reduce iPhoneX, OLED panel supplier Samsung also reduced the capacity of the OLED panel, and why is Samsung reluctant to reduce the sale of the OLED panel to gain more revenue under the hot OLED panel demand boom that led Chinese mobile companies to use the OLED panel more?

      Samsung dominates the small and medium size OLED panel Market


  The current global OLED panel production enterprises mainly include Samsung and LGD, and Samsung produces small and medium sized OLED panels for smart phones and other digital products, while LGD produces large size OLED panels for consumer electronics such as TV sets. It occupies more than 90% of the market share in the small and medium size OLED panel market. LGD is also promoting the production of small and medium size OLED panels, but it is currently facing a technical problem that it is expected to supply apple to the small and medium sized OLED panel this year, but there is a recent message that it will be the fastest to achieve the target next year.


  China panel production enterprises are actively putting into production the OLED panel. The largest panel production enterprise, Beijing East, has put into operation the small and medium size OLED panel in October. The second big panel production company Huaxing optoelectronic is building the OLED panel production plant in Wuhan, which is expected to be put into production the fastest next year. Hui photoelectric and so on, but considering that the OLED panel needs to be improved and improved technology industry is expected to have an impact on the global OLED panel Market by next year or even in 2020.


  In this case, at least this year and next year, Samsung will still be the leader of the small and medium size OLED panel market. It is difficult to challenge Samsung in terms of capacity. Even by 2020, Samsung's share in the global OLED panel market is declining and it still has a leading advantage in technology. After all, it has worked in the OLED panel industry. Decade。


  Global demand for OLED panels


  Samsung, the world's largest mobile phone company, has always used the OLED panel as one of its own mobile phones, so its high-end and mid - end mobile phones are using their own OLED panels. Second big mobile phone companies are said to be pushing three new iPhone this year, of which two use OLED panels, and the OLED screen of the big screen iPhone is bigger, so that its demand for the OLED panel will grow further.


  China's mobile phone companies have become a global power. In 2017, seven of the world's top ten smartphone companies came from China. Chinese mobile phone brands shipped more smartphones than the world's top two smartphone brands, Samsung and apple, and they were not willing to win the goods only in the middle and low smartphone market. We hope to compete with apple and Samsung in the high-end smartphone market, so they are also willing to purchase the top components of mobile phones.


  Among homemade mobile phones, OPPO and vivo are the biggest winners in OLED screen phones. In 2016, the two mobile phone companies accounted for more than 70% of the market share of the OLED screen, and the OLED screen was better in color display. The two companies' mobile phones emphasized the shooting function and the OLED screen enabled users to obtain better photo display effects. They are willing to pay more for the cost of purchasing the OLED panel, which is said to have paid a huge deposit to ensure Samsung supply the OLED panel, and the purchase price of the OLED panel is also high.


  HUAWEI and Xiaomi are also willing to buy Samsung's OLED panels, but for various reasons, the two companies now have limited OLED panels supplied by Samsung. Millet Note2's LGD OLED panel, which has been introduced before millet, has been spitting to show a sense of particle, which forces it to choose Samsung's OLED panel, and the high-end mobile phone before it is limited to the OLED panel to use the LCD panel as far as possible, but the two top high-end handset brands in Samsung and apple are using the OLED panel. In the circumstances, HUAWEI, who is interested in competing with the two companies in the high-end mobile phone market, will naturally choose more OLED panels.


  At the moment, fingerprint recognition technology has begun to be sought after, and the thinner OLED panel that can fully support the fingerprint identification technology is a lighter panel, which also encourages domestic mobile phone brands to purchase more OLED panels, all of which have led to the global phone industry's increasing demand for the OLED panel.


  Samsung would rather cut production than sell the OLED panel


  As the global mobile phone industry has increased demand for small and medium sized OLED panels, Samsung, which takes the dominant position in the small and medium size OLED panel market, will naturally become the biggest beneficiary. The 2017 performance showed that the business of Samsung was the main source of profit for Samsung, and its contribution to Samsung's profits was only inferior to that of storage chips. Under such circumstances, Samsung will naturally ensure that the profits of the OLED panel business will be the top priority.


  Among smartphone companies, apple is clearly willing to pay higher costs for the supply of Samsung's high level OLED panels. Chinese mobile companies are more willing to use lower cost LCD panels in the middle and low end phones because of cost relations. They also want to use more OLED panels on high-end phones, but because they sell far lower than Samsung and apple, the price game naturally hopes to reduce OLED in the price game. The price of the panel is in wait-and-see, but Samsung, the leader, obviously does not want it.


  So in the game, Samsung has released the capacity to reduce the OLED panel to show the Chinese mobile companies that even so does not reduce the price, and because of their own mobile phones and Apple's iPhone demand for the OLED panel, especially Apple's iPhone has contributed a lot to Samsung's OLED panel business. Let it be more optimistic to ensure the profit of OLED panel business.


  I think that in this year and next year, Samsung still dominates the small and medium size OLED panel market, the Chinese mobile phone companies can not get rid of the Samsung OLED panel dependence, but they need to keep up with the trend.


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