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Apple & Samsung will own 83.33% of the OLED Display Market in 2017 while Samsung Races to 7nm Chips to Win Apple Back

1AF X99 TSMC 7NM PLANT

 

Two interesting reports surfaced this morning in Asia that are worth noting. In the first report we lean that Samsung Display will produce an estimated 300 million AMOLED smartphone panels in 2017. After priority supply for Samsung Electronics and Apple, Samsung Display can supply only about 50 million AMOLED panels for China-based smartphone vendors this year for Huawei, Oppo and Vivo combined. Consequently, global supply of AMOLED panels will be short of demand for all of 2017. Apple and Samsung will account for 83.33% of the AMOLED panel market this year.

 

In a second report we learn that Samsung Electronics is going to invest US$6.98 billion (8 trillion KRW) to extend high-tech system semiconductor production lines. It is going to make supplemental investments into its 10-nano production lines in next month and construct new 7-nano semiconductor facilities in 2018.

 

Its strategy is to secure ultra-fine processing technologies faster than its competitors. Samsung Electronics is expecting that it can recover Apple's foundry supplies that were taken by Taiwan's TSMC by operating 7-nano production lines early and this will also benefit equipment manufacturers.

 

A Samsung representative stated added that "It is true that investments into 10-nano semiconductors have reduced compared to its initial plan as TSMC took supplies of Apple's latest AP." Because of that loss, the rep further noted that Samsung Electronics is making swift actions as it has high expectations on markets for 7-nano chips that will be commercialized in 2018 and that the amount of investment can increase in the future if Samsung Electronics can land a contract with Apple to produce 7-nano chips.

 

But Samsung may be dreaming a little here as TSMC's road map for 7, 5 and 3nm chips is already underway. Back in December TSMC TSMC's CEO Mark Liu stated at their second quarter performance presentation back September stated that he believed that their 7nm chips will be superior to those from Samsung in PPA index that indicates Power, Performance, and Area.

 

Liu further noted that they're going to start on tape-out on 7-nano chips in first quarter of next year and start mass-production in early 2018. Whether that could mean the iPhone 9 could be the first to introduce this processor is unknown at this time.

 

In the end, Samsung would need a miracle chip with new capabilities or one at half price to entice Apple to swithch. But realistically, it's a very long shot that Samsung will be able to win back Apple anytime in the foreseeable future.

 

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