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SDC Still Looking to Sell Large Area Fabs L7-2 and L81-2
Samsung Display sold its portion of the Suzhou, China fab to TCL/ChinaStar for $1.08b US and increased its stake in CSoT to 12.3% while keeping its remaining large panel LCD fabs in South Korea in operation as panel prices continued to rise.
Samsung Display will continue operating its Korean LCD fabs until large area supply has stabilized but will then resume its plans together with Samsung Electronics affiliate Samsung C&T representing SDC in the sale of the two large LCD panel fabs. The two fabs on the block are SDC’s Gen 7.5 fab known as L7-2 and L8-2-1, part of SDC’s Gen 8.5 line in Asan. The lines have been in mass production mode since 2008 and 2010 respectively and while currently running much smaller amounts, had peak production in their prime of 90,000 and 100,000 sheets/month. If both fabs are sold it would end SDC’s large panel production, leaving only fabs dedicated to small panel and QD/OLED production.
As both lines are old, it might be rather difficult for SDC to find a buyer that was willing to ship the fab to another location and upgrade the equipment, but the price will be the determining factor. Both lines are used for panel production between 20” and 86” but perform more efficiently at sizes more suited to IT displays and TV displays in the 55” category, a buyer would likely purchase the fabs to enhance their IT panel production capabilities, where capacity shortages exist. While the sale includes all production equipment, all production information would be removed and no IP is involved in the sale, The Chinese government however has instituted policies over the last year to afford itself more control over the purchase of what would be 2nd hand LCD production fabs. This additional control gives the central government a larger call in the supply/demand balance that is currently working in the Chinese display industry’s favor and is justified by the government bailouts of a number of Chinese LCD production fabs over the last few years, particularly when panel prices are in decline.
In April, BOE was the most aggressive at accepting bids for a variety of equipment for its OLED fabs in Ordos and Mianyang, and LCD equipment for its Gen 10.5 fab in Hefei, and more major purchases for the new G6 OLED fab BOE is building in Chongqing. Tianma was purchased equipment for their OLED fab in Xiamen, which is under construction, and HKC bought equipment for its H5 LCD fab, which is expected to open later this year. There were a number of procurements from an unnamed micro-OLED display project, which was a project initiated back in 2017, involving BOE, a number of Chinese development funds, US based Kopin Corp (KOPN), and a company known as Olightek (aka Yunnan Invensight Optoelectronics), that is controlled by China North Industries Group (state), also known as The China Ordinance Industries Group or Norinco, one of the largest global defense contractors. Kopin indicated they are no longer working with BOE.
The project is developing an OLED micro-display production line, in addition to Olightek’s existing production line and is based on similar technology. The line is developing a silicon based micro-OLED display that has purchased equipment from Sunic Systems late last year. BOE began offering a 0.39”OLED micro-OLED display in late 2019 and a 0.71” full HD micro-OLED display last year that has over 3,000 pixels/inch. BOE is also involved in a JV with Rohini that is developing a micro-LED backlight and direct emission system.
Samsung Display sold its portion of the Suzhou, China fab to TCL/ChinaStar for $1.08b US and increased its stake in CSoT to 12.3% while keeping its remaining large panel LCD fabs in South Korea in operation as panel prices continued to rise.
Samsung Display will continue operating its Korean LCD fabs until large area supply has stabilized but will then resume its plans together with Samsung Electronics affiliate Samsung C&T representing SDC in the sale of the two large LCD panel fabs. The two fabs on the block are SDC’s Gen 7.5 fab known as L7-2 and L8-2-1, part of SDC’s Gen 8.5 line in Asan. The lines have been in mass production mode since 2008 and 2010 respectively and while currently running much smaller amounts, had peak production in their prime of 90,000 and 100,000 sheets/month. If both fabs are sold it would end SDC’s large panel production, leaving only fabs dedicated to small panel and QD/OLED production.
As both lines are old, it might be rather difficult for SDC to find a buyer that was willing to ship the fab to another location and upgrade the equipment, but the price will be the determining factor. Both lines are used for panel production between 20” and 86” but perform more efficiently at sizes more suited to IT displays and TV displays in the 55” category, a buyer would likely purchase the fabs to enhance their IT panel production capabilities, where capacity shortages exist. While the sale includes all production equipment, all production information would be removed and no IP is involved in the sale, The Chinese government however has instituted policies over the last year to afford itself more control over the purchase of what would be 2nd hand LCD production fabs. This additional control gives the central government a larger call in the supply/demand balance that is currently working in the Chinese display industry’s favor and is justified by the government bailouts of a number of Chinese LCD production fabs over the last few years, particularly when panel prices are in decline.
In April, BOE was the most aggressive at accepting bids for a variety of equipment for its OLED fabs in Ordos and Mianyang, and LCD equipment for its Gen 10.5 fab in Hefei, and more major purchases for the new G6 OLED fab BOE is building in Chongqing. Tianma was purchased equipment for their OLED fab in Xiamen, which is under construction, and HKC bought equipment for its H5 LCD fab, which is expected to open later this year. There were a number of procurements from an unnamed micro-OLED display project, which was a project initiated back in 2017, involving BOE, a number of Chinese development funds, US based Kopin Corp (KOPN), and a company known as Olightek (aka Yunnan Invensight Optoelectronics), that is controlled by China North Industries Group (state), also known as The China Ordinance Industries Group or Norinco, one of the largest global defense contractors. Kopin indicated they are no longer working with BOE.
The project is developing an OLED micro-display production line, in addition to Olightek’s existing production line and is based on similar technology. The line is developing a silicon based micro-OLED display that has purchased equipment from Sunic Systems late last year. BOE began offering a 0.39”OLED micro-OLED display in late 2019 and a 0.71” full HD micro-OLED display last year that has over 3,000 pixels/inch. BOE is also involved in a JV with Rohini that is developing a micro-LED backlight and direct emission system.
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