Samsung Display announced that IT plans to invest 4.1 trillion won in an organic light-emitting diode (OLED) production line for 8.6 generation IT devices by 2026, but negotiations on the price of the vaporizer, a key component of the OLED project, are not going smoothly. In fact, Canon Tokki, the market leader, is known to have demanded a price of more than 1.5 trillion won (7.797 billion yuan) per unit. As Samsung Display and LG Display are burdened by heavy equipment investment, IT is difficult to ensure the medium - and long-term profitability of the OLED business.

According to the Display industry, Samsung Display and LG Display will invest in cooperation with Apple's OLED plan for IT. However, it remains to be seen whether Canon Tokki, the only OLED vaporizer maker, can fully secure its investment schedule and production capacity as its production capacity is limited.

The evaporation machine heats organic materials under vacuum and adheres to the panel substrate, which is a necessary procedure in the production of OLED panel. The method of evaporation includes placing the substrate vertically close to the ground, and the method of evaporation of organic matter and the substrate parallel to the ground.

Samsung Display has been trying to introduce a vertical evaporator, but Apple is pushing Canon Tokki to introduce a horizontal evaporator due to technical issues. Canon Tokki's horizontal evaporation technology is already used in the sixth-generation OLED process for existing Samsung displays.

The industry reportedly insisted on the unreasonable price, knowing that Canon Tokki likes its own device, which has been proven by Apple in the sixth generation product line. They believe that Samsung Display and LG Display will not be able to build an eighth-generation OLED cable for IT without their own evaporation machines.

The fact that Apple has introduced OLED panels based on dual-stack Tandem as standard is also a burden for the Korean display industry. "IT devices last longer and last longer than smartphones," said Park Sung-soon, an industry researcher. This is why we have adopted the dual stack series technology, which can improve life and power efficiency."

Two luminous layers means that the number of evaporation processes will soon be doubled. In other words, production costs can only increase. He went on to explain: "It is expected that the sixth generation of the existing dual-stack tandem architecture will be available for tablets in 2024. In the eighth generation, the price burden of the enhancers will be greater if the dual stack structure is adopted in series."

In addition, there are voices in the industry that Samsung Display should take this opportunity to consider changing its structure, which relies on Canon Tokki evaporation machine, if not impossible. From Samsung Display's point of view, LG Display's partner companies such as Korea Sun Systems and AMAT of the United States can be considered as evaporator companies.

A source from the Display industry said, Samsung Display and LG Display have no choice but to use Canon Tokki's vaporizer first in order to meet the production scale and yield that Apple wants. However, the profitability of the OLED business is bound to decline in the medium to long term unless it diversifies its partner companies, including domestic equipment companies.

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