FineMat Applied Materials has disclosed it will expand production capacity for metal masks used in manufacturing of flexible OLED panels by adding two CVD (chemical vapor deposition) mask lines in the second half of 2022, with the additional production capacity to come into operation in 2023.

The expansion is in response to increasing demand from China-based flexible OLED panel makers, FineMat said at a December 22 investors conference.

Leading Chinese smartphone vendors, including Huawei, Oppo and Vivo, used to rely on Samsung Display for supply of flexible OLED panels but have been turning to BOE Technology, Visionox Technology, China Star Optoelectronics Technology (CSOT) and Tianma Micro-electronics, FineMat noted. As a result, China-based flexible OLED panel makers' average capacity utilization rate rose from below 50% in the first half of 2021 to over 50% in the second half, FineMat indicated.

FineMat set up a CVD mask production line with monthly capacity of 40-50 metal masks in China and started production in October 2021. The production capacity is far insufficient to meet monthly demand for 250-300 metal masks from China-based flexible OLED panel makers, the reason for expanding CVD mask production capacity, FineMat explained.

As China-based makers have not yet set up metal mask production lines, FineMat currently faces competition in the China market only from South Korea-based fellow makers.

The existing CVD mask production line in China generates sales of US$700,000-800,000 a month currently and can generate over US$1 million if capacity is fully utilized.

Through cooperation with Etch Home, FineMat will use in-house etching technology to develop thin cooling sheets for use in smartphones, notebooks and servers.

FineMat posted consolidated revenues of NT$561.4 million (US$20.1 million), gross margin of 31.64%, operating profit of NT$24.6 million and net profit of NT$9.2 million for the first three quarters of 2021.