Samsung Display is doing a great job when it comes to the production of AMOLED panels, and so far it's been able to keep up with the increased demand of AMOLED panels in the market. However, a research firm warns that further increase in demand might put Samsung Display in trouble as the supply-demand ratio is expected to fall to 1% by the end of this year.

According to research firm DispalySearch, AMOLED panel shipment is expected to reach more than 217 million units this year. The shipment of AMOLED panels was recorded at 134 million units in the year 2012.

The company will have to extend the capacity of its A2 Gen-5.5 fabrication unit to keep up with the increasing demand in 2013and 2014. It might also have to speed up its plans for the A3 production line.

"As the supply/demand ratio is expected to tighten dramatically, Samsung is moving to significantly extend capacity at its A2 Gen 5.5 fab this year and next. Additionally, the company may also accelerate its plan for A3, another new AMOLED production line," said Charles Annis, Vice President of Manufacturing Research at NPD DisplaySearch.

The research firm also showed that in the first quarter of 2013, the demand-supply ratio for the AMOLED displays was 40%. The firm predicted that the ratio will come down 20% in the third quarter. However, the prediction showed that the speeding up the production at A2 and A3 fabs will help Samsung in bringing the demand-supply ratio above 10% in the second quarter next year.

Samsung has been very successful with its AMOLED display panels and the company has used it in many of its flagship devices. The AMOLED panels are also being used in smartphones from Motorola, Nokia and HTC.

The report also stated that the success of the Samsung Galaxy S4 that features 5 inch full HD AMOLED display will be one of the major reasons behind the increased demand.

"Samsung Display still produces the vast majority of commercially available AMOLEDs, and these are mainly used in smartphones. With the recent release of the Galaxy S4 with a 5" full HD AMOLED display, Samsung will need to run its AMOLED fabs at maximum capacity to keep up with expected high demand," Annis added.

At present Sasmsung produces the AMOLED displays in the size ranging from 2 inch to 7.7 inch.