When Samsung invests, Verizon is impacted

US: "Demand for high-end displays is very strong and we may continue to fail to meet all customer requirements, even after expanding capacity by seven-fold, until next year," Lee Woo-jong, vice president of marketing at Samsung Mobile Display, told the Reuters Global Technology Summit.

Reflecting strong demand for advanced displays, Samsung said early this week that it would invest 2.5 trillion won ($2.15 billion) by 2012 to build the world's largest production line of ultra-bright active-matric organic light-emitting diode (AM-OLED) screens.

Verizon Wireless, the biggest U.S. mobile carrier, also said in the Reuters Summit that it was unable to keep up with strong demand for some smartphone models such as the Droid Incredible from HTC due in part to component shortages such as high-quality screens made by Samsung.

Samsung Mobile Display is an equal joint venture of Samsung Electronics and Samsung SDI and ranks as the world's largest display maker for mobile devices.

It is also the biggest maker of a next-generation ultra-bright AM-OLED display screen, which is increasingly used in high-end mobile devices as it is thinner, has better image quality and consumes less power than traditional LCD screens.

Lee forecast shipments of overall mobile devices such as handsets and digital media players to grow to around 2.1 billion and 2.2 billion units this year from 1.9 billion last year.

Of these, smartphone shipments would grow nearly 50 percent to 260 million units this year from 175 million last year.

"Strong growth of smartphones will drive robust expansion in the AM-OLED market, which we expect to grow by 30 times to 600 million units by 2015 when shipments of mobile devices are expected to grow to 2.6 billion units," Lee said.

But high price has kept it from becoming a mass-produced technology in the market dominated by cheaper LCD panels. OLED screens are making inroads into high-end mobile phones but the cost of applying the technology to PCs and TVs are still prohibitive.

Competition is also intensifying, with LG Display planning to invest 250 billion won this year to triple capacity of a line producing OLED displays.

"We welcome competition and the industry needs more major players to grow this market, which is likely to expand application segments to other areas such as tablet PCs and TVs eventually."

The OLED market grew 35 percent last year to a record $826 million and Samsung Mobile controlled 70 percent of the market with $566 million revenue, according to research firm DisplaySearch.

Lee said its AM-OLED operation was now trading above break-even point as strong sales have started offsetting years of massive investment.

Samsung Mobile Display competes with local rival LG Display, Japan's Sharp Corp and TDK Corp and Taiwan's AU Optronics.