Korean Toolmakers Report Changes in Shipment Plans
November 07, 2017
TES extended an $11.1m contract with Royale for OLED equipment from the original end date of 1/2/18 to 4/18/2018. Shenzhen based Royale is building a Gen 5.5 flexible OLED fab that is expected to be completed in 3Q 2018, and is planning a Gen 6 flexible OLED fab expected to open a year later. Such a contract extension could indicate that the fab is behind schedule, but this type of revision is unlikely to be a determining factor as to when the fab opens. However, if there were other reports of major tools being delayed it would be significant. Royale has been producing small quantities of OLED displays in an R&D Fab focusing on VR. Avaco extended a $14.3m contract with CEC Panda by a month. Panda currently operates Gen 6 and Gen 8 LCD fabs in Nanjing, China, and is building a Gen 8.5 LCD fab in Xianyang that was expected to open (phase 1) this month.
Avaco makes sputtering and baking tools, as well as some logistics equipment, most of which would be rather early in the fab equipment line-up.
AP Systems extended a $101.9m contract with an ‘undisclosed party’ for ‘contract manufacturing equipment’ from 10/31/2017 to 12/15/2017. The tools are either excimer laser annealing, laser lift-off, or laser glass cutting tools, which would be used in either the LCD or OLED process, or deposition equipment for OLED.
SFA Engineering had signed a contract with Samsung Display for OLED equipment worth $47m, which was to run through April 2017. In a filing, SFA indicated that it had signed what a second contract with Samsung Display in March of this year, for ~$98m, with the contract expiring last week. A very large contract with an unnamed customer was extended from last week to the end of the year, all of which seem to point to Samsung Display’s Gen 6 panel flexible OLED expansion programs. While no specifics were revealed it is assumed this purchase was a final push to complete the ninth phase at the A3 fab in January 2018.
Charm Engineering has extended a contract with Samsung Display through 12/31/2017 and Praxair (PX) has also just signed a long-term contract with Samsung Display to supply 700 tons/day of Nitrogen to the A3 fab complex, which is the 4th such Praxair facility supporting the A3 fab.
The Samsung Display A3 fab in Cheonan, South Korea, will be Samsung Display’s largest OLED fab, ~1.9% larger than A2, and Samsung Display’s only fab that is completely dedicated to flexible OLED production. A3 has been built out in nine phases starting with phase 1, which opened in May 2015 and fully completed with phase 9 as noted above and at full capacity able to produce will have a unyielded capacity of 134.8m 5.5” flexible smartphones/quarter. While this is an obviously theoretical number, we believe Samsung Display has the ability to garner utilization rates of 85%, depending on the display specifications, once the fab has been completed and fully running for 6 to 9 months. As this is not Samsung Display’s only OLED fab, obviously they have the capacity to produce far more small panel OLED displays, and are also in development of what will start out as a smaller flexible small panel fab (A4), a converted LCD fab (L7-1), and another medium size flexible small panel OLED fab in Asan, South Korea, while maintaining both rigid and flexible small panel OLED capacity at its very large A2 fab, and smaller A1 fab. As can be seen below, Samsung Display has extremely significant capacity in both rigid and flexible small panel OLED production, and when compared to other producers, on both a raw and ‘available’ capacity basis, dominates the space.