The electronics giant Samsung plans to invest $ 11 billion in the development and construction of next-generation displays The South Korean company wants to react to the flood of supply and price pressure in the face of Chinese rivals.
At an event, in the presence of South Korean President Moon Jae In and Samsung Vice President Jay Y. Lee, the investment was presented as a step toward reorganizing the display industry while maintaining Samsung's global leadership and Korean dominance. The South Korean government will invest about $ 330 million in the project to achieve this goal, Moon said.
Samsung claims to build a so-called quantum dot display production line in Asan. This will start production in 2021 with an initial monthly capacity of 30,000 panels larger than 65 inches. As part of a long-term plan, production is to be expanded by 2025. The investment will help create 81,000 jobs, the company said.
Samsung and city rivals LG are struggling with fierce competition from Chinese suppliers like BOE. Chinese competitors have expanded their liquid crystal display manufacturing capabilities in recent years and are increasingly entering the market for the next generation of displays. In order to offset a decline in margins and loss of customers, Samsung is driving the development of quantum dot displays.
Samsung's legacy and de facto leader Lee is committed to investing in the display business in the long term, which, in addition to memory chips and smartphones, is one of the three areas in which the Korean tech champion is the world leader. The company is making a big bet on the future as the business environment deteriorates and a trade dispute between Korea and Japan creates uncertainty over the supply of chemicals and components needed to make modern displays. On Tuesday, Samsung reported a decline in profits of more than 50 percent in the past quarter – and even that was less than analysts had expected.
South Korea's largest company is the world's leading manufacturer of high-margin OLED displays, but it was given a damper last year. At that time the orders of Apple back, as the sales of the iPhone XS turned out worse than expected.
In addition, the trade war between the US and China has led to a downturn in the chip industry. The demand for smartphones is also diminishing. In China, Samsung generates a large part of its sales.
More: The crash of memory chip prices also tore Samsung's profits down. But now the group surprises with good figures for the third quarter.
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