Samsung is facing a loss in profits from increased competition and a slowdown in sales.
What you need to know
- Samsung is investing $11 billion along with $336 million from the South Korean government into quantum-dot displays to stave off Chinese competition.
- A new quantom-dot production line will be built in Asan and is set to start operating in 2021.
- It will create 81,000 jobs and initially will be able to produce panels 65 inches or larger at a rate of 30,000 per month.
Samsung is one of the leading tech companies in the world when it comes to manufacturing displays, memory chips, and smartphones. Unfortunately over the past few years, the rise of Chinese competition and waning sales have put a hurt on the company in these three key areas.
That’s a fact that is showing up on Samsung’s bottom line after the company just recently reported a 50% decline in profits year over year on October 8. In the face of this news, Samsung is going on the offensive by investing 13.1 trillion won ($11 billion) in the development of advanced next-generation displays.
Along with an investment of 400 billion won ($336 million) from the South Korean government, a new quantum-dot display production line will be built in Asan. It is set to begin operations in 2021 and will initially have the ability to produce panels larger than 65 inches at a rate of 30,000 per month. Production is expected to scale up from there and in the process create 81,000 jobs in total.
South Korean President Moon Jae-in and Samsung both hope that by investing in this next-generation display technology they will be able to re-establish dominance in the display market while staving off the rise of Chinese competition in the LCD space.
Even with this new investment, Samsung still faces challenges ahead while being in the middle of two different trade disputes. The first being with Japan over chemicals and components needed for making advanced displays, the second being the trade war being between its two largest customers — the U.S. and China — which could further affect its sales.
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