Samsung Display To Invest $3.6 Billion: Making Up For The Mistakes?

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Samsung Electronics Co. Ltd. (KRX:005930) and its beautiful displays have been the talk of the town ever since the first SuperAMOLED display made to the market with the very popular android phone Samsung Galaxy S. Banking on its marketing strategies and wide range of handsets catering to the needs of consumers at different price points, Samsung has become a force to be reckoned with in the smartphone industry over the past few years.

All seems good when it all goes good, right? Things just haven’t been that way for Samsung since the beginning of the fiscal year 2014. Profits seemed to fade away and the world leader although holding its top position in the Indian market, saw a really great onslaught by OEMs from the subcontinent, especially from China and India. And, there is no need to harp on how special the Indian market is for every smartphone maker, being the fastest growing smartphone market in the world!

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Why Is Samsung Group (005930) Losing Ground, Especially To New Smartphone Entrants ?

As reported by Reuters, Samsung is looking to invest around $3.6 billion in a new OLED production line, to produce mostly small and medium-sized OLED display panels for consumer electronic devices such as mobile phones and tablets.

This move made by Samsung can be directly attributed to Apple’s taking over of the pole position globally as the world’s top smartphone maker as per the recent reports. Again, this could just be the required move for the South Korean giant to get back into the game after it’s recent woes. Therefore, this should not come as a huge surprise as Samsung is known to invest heavily in production of mobile components to maintain the company’s hold in the business.

As per the figures posted on Samsung Electronic’s Official Global Blog, the company recorded $47.75 billion in revenues and $1.77 billion worth of profit in Q4 2014, thanks to the week-received Galaxy Note 4. According to analysts, the production line will start production of curved display units like the one found on the Galaxy Note Edge and its successor – the next flagship to boast a curved display.

Samsung was under attack for the lack of innovation through the Galaxy S line up, spare for the first two Galaxy S devices and was followed up, recently, by an overpriced set of metal clad handsets, the Galaxy Alpha Series.

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The new investments will be made between now and 2017. However, apart from the display production line, the South Korean giant is looking to set up a $14.12 billion worth of Silicon (SoC’s) manufacturing facility in South Korea somewhere around the first half of CY 2015. As per the information given to Reuters, such investments are expected to strain Samsung’s capital returns.

Looking towards the future, Samsung is all set to bring its next flagship down the alley and for sure, the upcoming device has a lot of money riding on it, spare for the position of the top of the line offering in the premium segment which is currently held by the arch rival, the Apple iPhone 6. While the company shall soon reveal its next flagship, we’re be waiting for some “real innovation” in its devices which so far consisted of nothing but a few battery hogging software tricks! Speaking of innovation, if it has to be that way, let’s deal with it.

Be it the popular LG G Flex smartphones or Samsung’s very own Galaxy Note Edge, which probably made the best use of a curved screen panel so far, curved displays are the talk of the town with only a few handsets sporting it for the time being, and Samsung should just go on with the same!

While each and every Galaxy Product gets touted as the Next Big Thingit will be interesting to see how Samsung is going to make up for the lost ground! Investments in mobile components may help the company maintain its profits, but it definitely needs a One Big Thing!

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