[EXCLUSIVE] Samsung Display to supply OLEDs for Apple tablets and laptops

Samsung Display is investing billions of dollars to supply organic light-emitting diode (OLED) displays to Apple for tablets and laptops, in a pioneering move that more closely integrates it with Apple, the Cupertino, California phone maker.

Samsung Electronics Executive Chairman Lee Jae-yong speaks at Samsung Display's factory in Asan, South Chungcheong, Tuesday after announcing a 4.1 trillion-won ($3.1 billion) investment into the factory. [YONHAP]

Samsung Display is investing billions of dollars to supply organic light-emitting diode (OLED) displays to Apple for tablets and laptops, in a pioneering move that more closely integrates it with the Cupertino, California phone maker.

In total, 4.1 trillion won ($3.1 billion) will be invested by 2026 in the manufacturing facility, and most of that money will go toward increasing capacity for the iPad-MacBook supply deal.

The investment will be committed to Samsung Display’s factory in Asan, South Chungcheong, to upgrade existing production lines, the Industry Ministry and Samsung Electronics announced Tuesday.

The majority of the panels being made with the new manufacturing process will be integrated into Apple tablet and laptop products under development, according to Yi Choong-hoon, head of display-focused market tracker UBI Research.

“The main client related to the new investment is Apple,” Yi told the Korea JoongAng Daily.

“There are only few manufacturers capable of making OLED-based laptops and tablets, such as Samsung Electronics and ASUS, and Apple has long considered adopting OLED to its laptop and tablet lines.”

Samsung Electronics, which owns 84.78 percent of Samsung Display, said the new lines would be able to produce screens for 10 million 14.3-inch tablets annually compared to the current 4.5 million.

The revamped facility will be tailored for glass substrates measuring 2.25 meters by 2.6 meters, a category called Gen 8.6. The glass will be cut into smaller units for use in tablets and laptops.

Samsung Display is presently the biggest OLED supplier for iPhones, but it has never supplied the panel type for other products.

The move is part of a big industry shift toward premium OLED panels from liquid crystal displays (LCD). Currently, OLED displays are used in high-end televisions and smartphones but rarely for laptops, tablets and monitors.

Multiple media outlets have speculated that Apple plans to release new iPad Pros with OLED panels next year by contracting Samsung Display and LG Display as suppliers.

Apple has never confirmed that it is reviewing the adoption of OLEDs for iPads and MacBooks.

iPads and MacBooks have LCD panels that use microscopic LEDs as backlights. But the OLEDs emit light directly without needing a backlight, allowing for better contrast and color.

The change in the panel type means that the prices of the products will go higher as the materials and equipment for OLEDs are more expensive than those for LCDs.

President Yoon Suk Yeol, Industry Minister Lee Chang-yang and Samsung Electronics Executive Chairman Lee Jae-yong attended a ceremony celebrating the signing of investment with the regional government.

The government pledged to provide sufficient regulatory and financial support for the expansion of OLED capacity to defeat price-cutting Chinese competitors like BOE.

BY PARK EUN-JEE [park.eunjee@joongang.co.kr]