Samsung seeks to diversify smartphone display, battery suppliers

Samsung Electronics appears to be turning to domestic electronics parts makers, especially for its upcoming mobile devices, amid Japan’s economic reprisal, according to industry sources Sunday.

The South Korean tech giant is deemed to be the biggest victim of Japanese restrictions on exports of three key hi-tech materials -- fluorinated polyimide, photoresist and hydrogen fluoride -- which can smother the production of both semiconductors and smartphones.

For the Galaxy Fold smartphones, Samsung is reportedly exploring new suppliers of colorless polyimide (CPI) films that are crucial for the foldable display devices.

Samsung Display, the exclusive provider of the foldable organic light-emitting diode display panels for its phones, is considering additional measures in case it is unable to procure a sufficient volume of CPI films from Japan’s Sumitomo, at the order of its de facto leader Lee Jae-yong.

Among the measures, some industry watchers raise expectations that Samsung Display could collaborate with domestic film makers like Kolon Industries and SKC. 

Kolon completed construction of a CPI film plant in Gumi, North Gyeongsang Province, last year and is preparing to start mass production in the near term. The facility is capable of producing CPI films for 10 million foldable devices. Samsung had chosen Sumitomo over Kolon due to the Japanese firm’s material quality and technological prowess.

SKC is currently building a similar facility with a schedule to finish construction by October.

A local newspaper reported Samsung is more likely to cooperate with SKC on the Galaxy Fold CPI films.

“The company has been in talks with various customers to provide CPI films, but specific decisions will be made after the manufacturing facility is completed,” said an SKC official as he dismissed the report, saying “It is too early to mention a particular product to work together.”

As part of long-term preparations against the expansions of export curbs by Japan, Samsung is also seeking to diversify smartphones parts suppliers.

For the upcoming Galaxy Note 10 smartphones slated for debut on Aug. 7, Samsung has selected LG Chem as one of battery suppliers, according to sources.

The company has been using mobile batteries manufactured mainly by its affiliate Samsung SDI and some foreign makers including China’s ATL for its flagship models.

“It is the first time the LG Chem batteries will be supplied for Samsung’s flagship phones,” an industry source said. “Since battery materials like separators could also be subject to Japan’s restrictions in a worst-case scenario, the new partnership between Samsung and LG seems advantageous for both groups.”

By Song Su-hyun (song@heraldcorp.com)