Idemitsu Kosan has announced that the company has reached a basic agreement with the government of the Chengdu Hi-tech Industrial Development Zone in the city of Chengdu, Sichuan Province, China, on the establishment, in the first quarter of the 2018 fiscal year, of a Chinese subsidiary company to engage in businesses related to OLED materials.
This is intended to strengthen Idemitsu's supply structure and technological support in preparation for further growth in the demand for OLED materials in China.
The company said that recent years have seen advancement in the use of OLED displays in many devices, including smartphones and large-screen TVs.
In China, there has been vigorous investment in OLED manufacturing facilities, mainly by major display manufacturers, due to the government’s policy of promoting the display industry in China. China is expected to experience a rapid growth in the future as a producer of OLED displays.
Based on anticipated growth of OLED display manufacturing in China, Idemitsu has decided to enhance its evaluation system for OLED materials and devices, strengthen its technological support capabilities and improve its supply structure in China to better fulfil its responsibilities as a reliable material supplier to customers in China.
To achieve this, Idemitsu has concluded this basic agreement with the government of the Chengdu Hi-tech Industrial Development Zone on the establishment of an OLED materials subsidiary in China.
Idemitsu has provided customer support and marketing activities in China since it established Idemitsu Electronic Materials (Shanghai) Co., Ltd. in Shanghai in 2017.
Following completion of incorporation procedures, future plans call for completion of construction of the new company’s facility and the beginning of commercial material production during fiscal 2019.
Idemitsu has OLED manufacturing plants in the cities of Omaezaki, Shizuoka Prefecture, Japan and Paju, Gyeonggi Province, South Korea. The new facility in China will be Idemitsu’s third manufacturing facility for OLED materials. At the same time, Idemitsu will continue working to ensure a stable OLED material supply structure in Japan and around the world to meet its customers’ needs.
While FY 2018 consolidated forecasts planned to be disclosed on 15th May are under discussion, we estimate this decision has no impact on the forecasts.
In a separate news report it was stated that the production facility will be built on a 15,000m2 site, with construction expected to be completed by March 2020. The output capacity and investment amount will be determined later.
With demand shrinking in Idemitsu's core petroleum business, the Tokyo-based company is hoping that production of OLED materials in China, along with the existing sites in Japan and South Korea, can provide an avenue for growth.