LG Display Reports Performance, Focus on Structure Differentiation Through OLED TV

On April 22, LG Display reported their first quarter of 2015 performance announcing their success in OLED TV market entrance with balanced results in mass production yield rate, timing, and management. They also revealed their panel production targets of 600,000 units this year, and 1,500,000 units in 2016.

 

LG Display’s CFO Sang-don Kim announced that “OLED TV was about technology innovation until last year, this year it will be innovation in consumers and yield rate, and by next year it will be decided whether it has popularization potential”. He added LG Display will “focus on increasing the business values rather than immediate profit and methodically proceed with OLED focused strategy for structural differentiation in large size display”. He also revealed LG Display will decide on additional investment after observing OLED TV market’s growth potential.

 

Regarding China’s BOE Gen10.5 investment, a recent issue, he forecast “much time is needed to begin set up and if Chinese companies run into problems while working on enlarging the display it is estimated that they will return to 30inch. Therefore LG Display’s large area panel sales will not be much affected”. He explained in regards to LG Display’s Gen10.5 large area LCD investment that it will be decided after careful examination considering the cost and market maturity.

 

LG Display also revealed a decrease in sales in small to mid-size display, such as tablet, due to seasonal factors. However for large size display, they announced as a result of improved performance, the total business profit recorded approx. 687 million USD, an 11% increase compared to the previous quarter (approx. 578 million USD), and showed surplus in business profit for the 12 consecutive quarters.

 

LG Display CFO Sang-don Kim

LG Display CFO Sang-don Kim

White OLED Display Market to Grow Rapidly to 150 Million Units Production in 2020

Large size OLED TV production is one of the hot issues within the display market. Although OLED has long been a focus for the next generation display, the market share of OLED display is still low. According to UBI Research, a market research company, despite the continued increase in OLED panel production volume and application scope, the point when it moves toward consumer market from producer market will be another leap for the display industry.

UBI Research’s White OLED Display Annual Report (published April 15, 2015) notes that mass production actualization of large size display using RGB structured OLED panel has not been possible due to the dead space from drooped effect. Therefore, UBI Research analyzed that the additional processes and investment cost in order to improve this increases the production cost resulting in decreased competitiveness.

Currently, OLED panel with WRGB structure is being regarded as the only technology that can achieve large size display. As key production companies revealed in SID 2014, concentrated efforts in WRGB OLED research and production resulted in approx. 80% of target yield. In 2015, supply rate is estimated to be 600 thousand units, a 40% increase from 2014, and 1.6 million units in 2016. Chinese key panel companies, led by AUO and BOE, also possess pilot lines for large area WRGB OLED panel mass production including Gen8. (Source: White OLED Display Annual Report, UBI Research)

Solution process applied technology is being developed in close pursuit of WRGB OLED, but UBI Research surmises that it will take 3~4 years for the active mass production competing with efficiency and merits of WRGB structure.

UBI Research forecast WRGB OLED’s unrivaled path will continue for another 5 years or so with approx. 150 million units of WRGB OLED display production out of over 1,000 million OLED display units in 2020. Large size white OLED display panel for TV market is expected to record approx. 1.6 million units in 2016 and grow to produce US$ 13,759M in revenue in 2020 (figures 1, 2).

If the selection of WRGB OLED can solve the RGB structure’s limit in large area panel mass production, possible active OLED TV production is anticipated. With the publication of UBI Research’s report the timing of this is expected to be a point of much discussion. Additionally, further analysis is needed on whether WRGB OLED is really the only technology for large size display, and if so for how long WRGB OLED’s peerless growth can last.

White OLED Shipment and Revenue

Samsung Elec. and Apple Lead Flexible (Plastic) OLED Industry

2015 is forecast to be the year flexible (plastic) OLED actively enters the market. Galaxy S6, which was hugely popular in MWC 2015, is already to have received pre-order for 20 million units. Of these, approximately 50% is estimated to be for Galaxy S6 Edge.

Compared to only several million units of previously released Galaxy Round and Note Edge, the 2015 shipment for Galaxy S6 Edge is anticipated to reach 20 – 30 million units. In order to prepare for Galaxy S6 Edge sales Samsung Display began A3 line operation. Existing A2 line’s Gen 5.5 15K supply and Gen 6’s 15K of flexible OLED panels are to be used. Using these shipment, Samsung Electronics is planning to sell 50% of flexible OLED equipped Edge. What began with Omnia, Samsung Elec.’s lead in rigid AMOLED market is being transferred to their ability to control the secondary flow of flexible OLED market.

Smart phone market’s absolute leader Apple begins the sales of Apple Watch, equipped with LG Display’s plastic OLED, from April. Expected sales volume for this year is approximately 20 million units.

Samsung Elec.’s Galaxy S6 Edge is estimated to cost approximately 1,000 USD, and Apple is releasing various products costing from hundreds USD to thousands USD. If each product from the 2 companies cost 1,000 USD, the total set market is expected to exceed 35 thousand million USD.

The market that these 2 companies will create in this year’s smart device market is quite stunning. Accordingly, the flexible (plastic) OLED panel market is also expected to grow rapidly. Although neither company revealed the panel cost, considering the existing market is staying at 7 thousand million USD the 2015 AMOLED total market is forecast to reach 9 thousand million USD.

Chinese Companies’ Aggressive Chase, BOE’s Active Secondary Investment for OLED

It was revealed that public tendering began regarding BOE’s 5.5G AM-OLED project on ICB Operator, a Chinese international tendering network site.

BOE possesses Gen 5.5 AMOLED line in Ordos, and is preparing mass production using SNU’s evaporator. It is analyzed that the additional investment regarding Gen 5.5 AMOLED project has been confirmed as SNU evaporator yield has mostly settled. It is estimated that BOE’s mass production of AMOLED panel for mobile will be able to begin earnestly in the second half of the year.

BOE, OLED Project Public Tender List

BOE, OLED Project Public Tender List

<Source: ICB Operator>

Chinese panel companies aiming for mass production of AMOLED panel for mobile in 2015 are Visionox, Truly, Tianma, and EverDisplay as well as BOE. Of these, EverDisplay is known to be already supplying panel’s sample base.

The focus is now on how the active mass production of Chinese OLED panel companies will affect the OLED industry which is currently being led by Korea’s Samsung Display and LG Display.

Chinese Companies Begin Active OLED Panel Production Line Operation

The Chinese companies are estimated to begin active production of OLED panels, a market for which used to be dominated by Korean companies. Following this, the market for emitting materials for OLED panels also started shifting.

“OLED Emitting Material Annual Report”, published by UBI Research in March 2015, forecast that Chinese companies will begin mass production of AMOLED panel for mobile in second half of 2015, and large area panel from 2017. Together with China’s mass production of panel, emitting material market is estimated to grow into US$ 560 million in 2015, a 16% increase from 2014, and approximately US$ 2,500 million in 2020.

Emitting material companies that rely heavily on Samsung and LG’s panel mass production are anticipating supply chain advancement to China, and considering business expansion in China in order to increase revenue. Idemitsu Kosan is the most proactive and has already started supplying materials to BOE and Tianma. Duksan Neolux began supplying to BOE’s Ordos factory and deliberating on furthering business in China. (Source: Trend Analysis of Key Material Companies, 2015 OLED Emitting Material Annual Report)

With the expansion of panel market, increased competitiveness by Korean emitting material companies is required to acquire supply chain. This is also when Korean panel production companies need to obtain technology in order to retain their market share against Chinese companies.

Emitting Material Market Share by country: UBI Research

Emitting Material Market Share by country: UBI Research

<Emitting Material Market Share by country: UBI Research>

 

OLED TV, becomes the Quantum Dot TV just by placing a dot in the name?

Though they are a part of sales gimmick, extremely deluding names are emerging.

For OLED TV, the technology name “OLED” makes it easier for a consumer to recognize the differences of TVs precisely as it uses the OLED panel which is a spontaneous emission method employed to realize brightness and color. In the beginning of last year, LG Electronics and Samsung Electronics made it clear that it is not LCD TV by literally using the term ‘OLED TV’ for the TVs manufactured using OLED panel. But for LED TV, it should be named as LCD TV adopting LED BLU. The LED TV is the one that controls light only with LED.

The name LED TV was a dangerous concept allowing for that it is safe to deceive general customers to sell products. This concern reoccurs for the LCD TV employing the quantum dot technology. As the LCD TV adopting the quantum dot technology emerges as a new rising star of the TV market, the TV set producers are planning to ship the products under the names of QD TV, QLED TV, or Q Dot TV. While they are naming the LCD product as if it is a new TV made only with the quantum dot while in reality, the quantum dot technology is added to the LED backlight to improve the color reproducibility and power consumption.

The worst name is “QLED TV” which was created just by putting a dot in the OLED TV. It is assumed to be the combination of the terms LED TV and quantum dot. But it is very similar to the name ‘OLED TV’ that commonly recognized as the next generation TV to the extent of confusing as OLED TV.

In the TV market that becomes more and more competitive as time passes, the differentiation strategy is crucial to make a distinction with other companies. However, this immoral and disgraceful trick of playing with consumers with naming must be stopped. Like an automobile company gets a considerable penalty for selling a car with false mileage, the strict sanctions must be imposed upon TV manufacturers using names to deceive customers.

Solution-processed OLED to be commercialized in years

A solution-processable OLED technology is the one of its kinds that can RGB panels by using mother glasses for Gen 6 or later OLED panels. After some improvements are made to the properties of materials and definition, solution-processed OLED products will be manufactures in years to come.

 

So far, the existing solution process technology with a resolution of 200ppi could not be applied to smartphones and tablet PCs requiring a higher definition. With the development of the new technology that can feature a resolution of up to 300ppi, however, the solution process can become applied to tablet PCs with the potential for rapid growth.

 

In addition, it is possible that solution process technology is utilized to manufacture ultra HD 4K and even 8K (7680×4320) TV panels. The 65-inch 8K (7680×4320) panels are expected to feature a resolution of approximately 140 ppi. The manufacturing of panels that can produce an image of 200 ppi or higher will lead to the production of high-definition RGB LED TV panels.

 

Given that the 10.5-inch panels using the recently released AMOLED panels have a resolution of 287 ppi and use a Pentile layout, tablet PC panels with a RGB layout will be manufactured by using the solution process technology.

UDC, OLED market awaiting to bloom

On the 6th, Universal Display Corporation (UDC), the U.S panel company, announced on their website that the 3Q/2014 Performance Summary was released on 30th October.

The sales for the third quarter of 2014 is $32.9 million similar to $32.8 million which was the 3Q sales in the previous year. It is analyzed that the rise by a small margin is because the royalties and license fees were increased from $1.5 million in the third quarter of the last year to $5.4 million. In addition, another result includes the decrease of materials sales by 9% from $30.3 million to $27.5 million. It is considered that it fell due to the poor host materials sales. The business profit is $6.1 million, increased $1.9 million from the same period a year earlier.

The sales by the third quarter of 2014 is $134.9 million, increased by 39% as compared to the corresponding period last year. Though there is little demand for materials as the OLED industry is still in the preliminary stage, the UDC indicated on the report that there are variables to come. For that reason, the sales for this year is expected to be between $183 million and $185 million.

reporter@olednet.co.kr

Korean Display Companies, need urgent restructuring!

As the sales of Korean display companies drop drastically, the business profits are under the serious situations.

In 2012 when Samsung Display was established, the sales was about 33 trillion won and 29.8 trillion won in 2013, reduced by 10%. And it is expected to be about 24 trillion won, decreased about 20% compared to the previous year. LG Display is undergoing the similar situation where the sales was 29.4 trillion won in 2012 and 27 trillion won in 2013, losing the amount of 2.4 trillion won. The prospected sales for 2014 is about 25~26 trillion won.

Samsung Display’s business profits recorded 3.2 trillion won in 2012 and 3 trillion won in 2013, but the profit of 2014 is not anticipated as it is only 140 billion won in the second quarter of the year. Meanwhile, the business profits of LG Display were 0.9 trillion won in 2012 and 1.2 trillion won in 2013, expecting 1.4 trillion won in 2014.

While the sales and business profits of Samsung Display are slumping, the LG Display is improving its business value as the business profit increases slightly despite the sales decrease.

But these companies are facing inevitable sales decrease due to the intense investments and panel cost reductions of Chinese display companies, and increase of the production costs, worsening sales conditions of Korean display companies. Moreover, it is even harder to secure competitiveness as the technology level of Chinese panel companies are getting closer to that of Korean companies.

The problem is the decrease in the business profit. In reality, Samsung Display maintains the 33,000 employees since 2012. Given that the sales has decreased by 30% from 33 trillion won to 24 trillion won, keeping the same number of employees implies chronic structure of restricting the improvement of business profit. In purely arithmetical terms, Samsung Display requires structural adjustment of about 10,000 employees. The situation is unfavorable with LG Display as well. LG Display has about 55,000 employees which is 20,000 more than Samsung Display. LG Display’s business profit for this year might be greater than that of Samsung Display but it is relatively in bad circumstances considering sales per individual.

There still is no element likely to appear in 2015 to enhance the sales and business profits more than 2014. The sales fall is expected as the price is continually decreasing without any additional investment, and there is a high probability of business profit drop. However, there is a chance to increase the sales and business profits if these companies secure a market for the expensive OLED panel.

For display companies, the only way to achieve business profits without restructuring is lowering the supply prices of the parts, materials, and equipment. The OLED material industry which is blossoming now is struck by the mortal blow of 50% decrease of OLED emitting materials and relevant materials compared to 2012. The price decrease range of materials is excessively severe compared to the price decrease of the panel. Some companies are reconsidering the business and the poor performances of those display companies are shaking the forward and backward linkages of the industries higher than the actual numerical value.

To save the entire Korean display industries, Samsung Display and LG Display must secure the sound financial structure through structural adjustments rather than requesting of cost reduction for the supplier unilaterally.

The collapses of Japanese companies resulted from retaining the employments in spite of sales aggravation must be taken as a lesson.

 

reporter@olednet.co.kr

What is the optimal encapsulation technology for the Flexible AMOLED?

Currently mass-producing flexible AMOLED panels are taking PI substrate, backplane, and RGB deposition method, and the existing encapsulation technologies for A2 line of Samsung Display is TFE (thin film encapsulation) and hybrid encapsulation for LG Display.

But for the flexible AMOLED exclusive A3 line which is newly invested by the Samsung Display, advanced the orders not in the TFE but in the hybrid encapsulation method which is laminating the film after resin coating process on the passivation structure of inorganic layer and organic layer, similar to the method that the LG Display takes.

The reason for the change of encapsulation technology at the A3 of Samsung Display was analyzed in the “2014 Flexible OLED Report” issued by the UBI Research including the latest trends and issues such as the flexible AMOLED related issues and processes, market forecast of the flexible AMOLED panel and flexible OLED lighting, flexible AMOLED technologies comparison of Samsung Display and LG Display, etc.

According to this report, the flexible AMOLED panel market is forecasted to show a compound annual growth rate of about 60% through to 2020, reaching $ 17,600 million where the primary applications are expected to be for the flexible AMOLED panel of tablet pc.

140926_Flexible AMOLED용 encapsulation, 최적의 기술은

<Flexible AMOLED panel Market Forecast>

reporter@olednet.co.kr