Samsung has been killing it in the smartphone segment with its Super AMOLED displays. AMOLED displays are superior to LCD panels in many ways: they are thinner, have better contrast and deeper blacks. However, other smartphone brands did not adopt this technology due to higher panel costs. Now, the production cost of AMOLED panels is said to have fallen below the production cost of LCD panels.
According to IHS Technology, it costs somewhere around $14.30 to produce a 5-inch 1080p AMOLED display, while the production cost of a similarly-sized 1080p LTPS LCD panel is $14.60. These numbers are from the first quarter of 2016. In Q4 2015, the production costs of LCD and AMOLED display panels were $15.70 and $17.10, respectively. This means that many brands may start using AMOLED displays in their entry-level as well as mid-range smartphones.
Samsung has improved the quality and performance of its Super AMOLED displays, and its high-end smartphones have been crowned as the best smartphone displays by DisplayMate many times in the recent past. The cost of operating the factories is fixed, so the production cost can be reduced by increasing the operation rate, so there's a good chance that production cost of AMOLED panels will continue to drop.
Samsung’s display manufacturing arm has reduced its reliance on the company’s smartphone division and strengthened its business with Chinese smartphone brands. It was able to increase the operation rate at its AMOLED display manufacturing units by 90 to 95 percent, and it is gearing up to produce additional AMOLED panels at its A3 line to further reduce the production cost. It is expected to be the chief supplier of flexible AMOLED panels for future iPhones.
