More Modules
As we noted on 11/15/21, Samsung has some aggressive targets for its smartphone line next year, and as part of that plan, it targets 13m foldable phones to be shipped, up from the 7m expected this year. While Samsung Display (pvt) has the capacity to produce the required units for its parent, it also expects to ship an additional 5m units to other customers, a target of 18m units, however the panels produced by SDC need to be assembled into modules before being shipped to customers, which takes place at the company’s module plant in Vietnam.
With the Vietnam module plant capacity at between 17m and 18m foldable modules/year, even running at full capacity the foldable module assembly process would be the bottleneck facing SDC’s foldable display shipment plans. To that end, SDC has begun to order equipment to expand module capacity at the Vietnam facility with the goal of increasing module output capacity to 24m units, a ~33% increase, by adding 3 new lines to the existing 7. As the tools needed for assembly are not akin to those used for actual display production, the timing of tool delivery should not be a limiting factor for SDC. That said, the COVID-19 travel restrictions mentioned earlier in our daily note, could lengthen the time for the tools to be installed and tested, which is why SDC is ordering enough new module capacity to more than meet foldable module expectations for 2022.
With the Vietnam module plant capacity at between 17m and 18m foldable modules/year, even running at full capacity the foldable module assembly process would be the bottleneck facing SDC’s foldable display shipment plans. To that end, SDC has begun to order equipment to expand module capacity at the Vietnam facility with the goal of increasing module output capacity to 24m units, a ~33% increase, by adding 3 new lines to the existing 7. As the tools needed for assembly are not akin to those used for actual display production, the timing of tool delivery should not be a limiting factor for SDC. That said, the COVID-19 travel restrictions mentioned earlier in our daily note, could lengthen the time for the tools to be installed and tested, which is why SDC is ordering enough new module capacity to more than meet foldable module expectations for 2022.
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