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For the first time in the world, Samsung SDI will mass produce its two-inch AM-OLED panels, meaning that customers are likely to see their mobile phones equipped with what many call the next-generation of display screens within the year.

Samsung SDI, a unit of Samsung Group, said that it will produce 1.5 million units of AM-OLED, or active-matrix organic light emitting diode, screens every month and Sony, LG and Toshiba will likely follow suit soon, prompting fierce competition among display manufactures at home and abroad to preempt the emerging display market.

Samsung SDI held a press conference on October 10 to announce that it has launched mass production of AM-OLED panels at its plant in Cheonan, around 90 kilometers south of Seoul. Kim Jae-wook, head of its display business division, said, “We have secured orders covering products to be manufactured by the end of next year.” The company plans to produce the ultra-small panels for portable devices such as PMPs and personal computers next year and will unveil panels to be used in laptop computers and television sets the following year.

Rival LG.Philips LCD is also weighing when to start mass production of AM-OLED panels. LG.Philips can produce around 100,000 units of such panels from its two production lines in Gumi.

In addition, Japanese companies are striving to catch up with their South Korean rivals in the emerging display market. Sony is planning to launch 11-inch AM-OLED-equipped televisions in December, while TMD, a joint venture between Toshiba and Matsushita, aims to churn out its own products in 2009. Kyocera has already brought its sample television products to the market.

Though Samsung SDI has started the world’s first AM-OLED mass production, there are many challenges for the company ahead. The question is how to keep high yields and demand. Sample AM-OLED products for mobile phones cost twice as much as ordinary display panels and customers pay six or seven times as much for Sony’s 11-inch TV as they would spend on an ordinary LCD TV. But experts say that Sony cannot say that it has started mass production of AM-OLEDs as its monthly production capacity stands at only 1,000.

An LG Electronics official said, “Timing is important but it seems to be a little bit fast. The key is how much demand there will be for small panels used in mobile devices.”

Samsung SDI said that around three or four global mobile handset manufacturers will adopt its AM-OLED panels in their models and the products will hit the market within the end of this year. But it declined to specify the name of companies in question.

“With a great customer response, we have received orders which will cover around 90 percent of all the AM-OLED products to be manufactured by the end of next year,” Samsung’s display business division head. “We plan to increase our monthly (2-inch) AM-OLED production capacity from the current 1.5 million units to 7.5 million in 2009.”

He also said that the company’s AM-OLED technology is faster than that of its Japanese rivals by around one year. Chung Dong-young, a researcher at the Samsung Economic Research Institute, however, said it will take at least five years for Samsung SDI to catch up with LG.Philips in terms of cost, though there might be a demand for small-sized AM-OLEDs used in mobile phones.

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