According to industry officials on Monday, South Korean tech giant Samsung Electronics’ subsidiary, Samsung Display Co., invested 13.5 billion won ($11.6 million) in acquiring 600,000 shares of the local ultra-thin glass substrate maker Dowoo Insys Co.
Samsung Display, the only maker of foldable displays for Samsung Electronics, became a majority stakeholder with a total of 27.7 percent share as part of its strategy to secure adequate supplies for the second generation of the Galaxy Fold set to launch next year.
The subsidiary made the investment last week with Samsung Venture Investment Corp. through a collaborative fund.
Market observers expect that the latest purchase of stakes in the local glass display material maker, Samsung Display will reduce its dependency on its current Japanese suppliers and secure a steady supply of display materials.
Samsung Display, so far, invested 48.5 billion won ($41.8 million) in the glassmaker since May of 2018. Before the investment, the company held the second-largest share of 18 percent after Koo Bon-ki, Dowoo Insys Chairman, with a 19 percent share.
Samsung Electronics currently sources colorless polyimide films from Japan-based Sumitomo Chemical for parts of its Galaxy Fold. However, the tech giant plans to change the existing screen material to the more robust and flexible glass material provided by the local maker.
Dowoo Insys recently decided to issue convertible bonds valued at 23 billion won ($19.8 million), which the company expects Samsung Display to acquire by the end of the month fully. The largest shareholder is also said to buy Chairman Koo’s holdings.
A Samsung Display official confirms with a statement, “There have been moves to increase stake in the firm gradually.” The official added, “Yet, we can’t confirm the exact figures or further moves.”
The display maker, however, stated that the purchase is only for investment purposes for its second-generation foldable phones, and it would not influence in any way the management of Dowoo Insys.
Samsung Electronics plans to debut its newest Galaxy Fold 2 smartphone in San Francisco, U.S., in February next year. The company targets to sell 6 million units in foldable phones next year and 20 million units by 2021.