According to news from the Nikkei Asian Review website Samsung Electronics is planning to increase production of the company's next-generation smartphone display panels by more than 50% this year. This increase in production is believed to be primarily targeted at supplying Apple as well as other manufacturers who are seeking to rushing to update their smartphones with OLED displays.
Samsung is reported as planning to invest around 8 trillion won (US$6.82 billion) in 2016 to raise production capacity by the equivalent of well over 200 million units for smartphone panels using OLED panels at a subsidiary's plant. The report indicated that increased OLED production will account for around 80% of Samsung's capital investment in its panel business this year. Samsung is thought to be capable of producing OLED panels equivalent to more than 300 million smartphone screens each year.
Figure: Samsung - Galaxy smartphones with OLED displays
Samsung holds a near-monopoly on small size OLED panels, and according to multiple news reports Apple has approached the company to supply such displays for an upcoming version of its iPhone. Apple is said to have previously hinted to component suppliers that an OLED smartphone could appear by 2018, however there is now speculation that the initial launch could be later in 2017.
Apple's introduction of an iPhone with an OLED display could spur other smartphone manufacturers to follow. However, Samsung's strategy for production carries a risk as its capacity after the upgrade will be much higher than the company's own estimated smartphone sales volume of 320 million units in 2015, creating the possibility of the massive investment becoming a drain on earnings.