Samsung Display has recently requested quotes from a display equipment maker DMS, with which it had not traded in the past few years, for LCD device cleaning equipment. It seems that Samsung Electronics has done so as SEMES, a subsidiary of Samsung Electronics, has begun to liquidate the LCD equipment business.
According to the industry on the 1st, Samsung Display recently commissioned DMS to give estimates on LCD cleaning equipment The two had not dealt with each other since 2015. "We know that DMS had been asked for a quote from Samsung Display and thought it was strange at first," said a display official who knows well about the internal news of DMS.
The last transaction DMS had with Samsung Display was in 2015 when DMS supplied cleaning equipment to Samsung Display's 8th generation LCD production line in Suzhou, Jiangsu Province in China. After that, SEMES and KCTech supplied cleaning equipment to Samsung Display.
The reason why Samsung Display recently requested estimates from a company that it has not traded with for several years seems to be the fact that SEMES, the main supplier, is about to liquidate the LCD equipment business. An official from KCTech, another company that supplies LCD cleaning equipment to Samsung Display, said, "We learned that the (stock) market is expecting an increase in sales due to orders from another company. Still, there is no specific progress.”
DMS, a major supplier of LG Display, is reportedly discussing the matter seriously internally after receiving the quotation request from Samsung Display. A DMS official said, "There is a difference in specifications of cleaning equipment between LG Display and Samsung Display. To make something that has not been created in the meantime, we have to consider the efficiency of the existing production line."
It would not be easy for DMS to take advantage of this opportunity to expand its sales to the provision of OLED cleaning equipment through LCD cleaning equipment after commencing transactions with Samsung Display. This is because SEMES will continue its OLED equipment business.
Cleaning equipment for OLED panels, which use organic light emission vulnerable to moisture and oxygen, requires a higher level of specification than LCD cleaning equipment. Equipment prices are also generally higher for OLED cleaning equipment than LCD cleaning equipment. OLED cleaning equipment sales of DMS, which has stayed the same with LCD cleaning equipment sales last year, are expected to surpass LCD cleaning equipment sales this year.
As DMS expects to increase sales of LED cleaning equipment, it is unlikely that it will be able to add additional capacity to LCD cleaning equipment, for which Samsung Display is not expected to make large-scale investments. As a result, it is reported that they are considering the method of giving subcontracts to a secondary supplier.