News : Samsung SDI to invest $529 million to up OLED output

SEOUL (Reuters) - South Korean display maker Samsung SDI Co (006400.KS: Quote, Profile, Research, Stock Buzz) said on Monday it would boost production of next-generation organic displays to six times the current level by mid-2009, spending $529 million.

The move comes as leading panel makers try to grab a piece of the fast-growing market for active-matrix organic light-emitting diode (AM-OLED) displays, which make better-quality, slimmer and more energy-efficient screens than liquid crystal displays.

But makers need to clear hurdles such as cutting production costs and maximizing screen size in order to see an adoption in a wider range of applications.

Samsung SDI, which produces small-sized AM-OLED screens used in handheld devices, said in a filing with the local exchange that it would invest 551.8 billion won ($528.6 million) until mid-2009 to expand its AM-OLED output.

When the investment is completed, its production capacity will reach 9 million units a month in 2-inch screen terms, compared with 1.5 million currently, the company said.

Other makers are also moving fast to launch OLED products and build scale. Japan's Sony Corp (6758.T: Quote, Profile, Research, Stock Buzz) last November started selling small-sized TVs using OLED technology and Toshiba Corp (6502.T: Quote, Profile, Research, Stock Buzz) plans to ship small-to-medium-size OLED screens for mobile devices in the autumn.

Last week, Japan's Sankei Shimbun daily reported Matsushita Electric Industrial Co (6752.T: Quote, Profile, Research, Stock Buzz) is finalizing plans to mass-produce 37-inch OLED TVs in three years.

Market researcher iSuppli said in May it expected global shipments of AM-OLED panels to nearly quadruple in 2008 to 10.2 million units, with revenue reaching $225 million.

Shares in Samsung SDI ended up 0.12 percent at 83,600 won, outperforming the wider market's 0.57 percent loss.

($1=1043.8 Won)

(Reporting by Rhee So-eui; Editing by Keiron Henderson)