Samsung seeks to drive growth with foldable displays

Samsung’s earnings releases tend to offer bits and pieces of information that help us understand what the company is focusing on for the coming quarters. Its full earnings results for Q2 2018 show that revenues were down 4 percent in the quarter due to sluggish sales of smartphones and display panels. Samsung also confirmed reports that the Galaxy S9 sales have indeed been slow.

Samsung’s display division was expected to take a hit in this quarter and it certainly has. There was weak demand for flexible OLED panels while shipments and prices for LCD panels also declined. The company is now relying on newer products such as foldable displays to drive growth for this crucial division.

First foldable smartphone due early next year

Samsung was expected to bring in around $22 billion in revenue when it was selected as the sole supplier of OLED panels to Apple for the iPhone X. Amid reports that Apple had cut its sales target for the flagship device, it was reported that Samsung had overestimated demand for OLED displays.

The company was said to be taking a step back to re-evaluate its investments in OLED production as it seemed to have overestimated demand from Chinese manufacturers as well. Most Chinese OEMs have stuck with LCD panels because of cost benefits and haven’t made the switch to OLED.

Despite improved factory utilization for rigid products, Samsung says that demand for flexible OLED products “from major customers” remained slow. This had a negative impact on the company’s revenues. It didn’t help that shipments and the average panel price for LCD products also declined during this period.

Samsung expects better performance from its display division in the second half of this year, though. It predicts that OLED sales will rebound on recovering demand for flexible displays. It will enhance technological and price competitiveness to actively address customer demand.

It pledges to reinforce its competencies in new products such as foldable displays. Samsung is expected to start mass producing its foldable OLED displays in the second half of this year. They will first be supplied to the company’s mobile division which is said to launch Samsung’s first foldable smartphone early next year. It’s only after that might the display division start thinking about supplying the foldable OLED display to other manufacturers.

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