OLED production - Page 30

Yesterday we posted on a new OLED monitor, the Asus ProArt PQ22UC with a 21.6" 3840x2160 (204 PPI) OLED panel. It turns out that this panel is produced by JOLED.

This is very interesting news. JOLED indeed announced a few weeks ago that it started commercial production of 21.6" ink-jet printed 4K OLED panels, and it is great to see a product launched so quickly. JOLED's production capacity is not large, the company is still using a pilot-scale line, but it's likely that Asus is not expecting to sell many units of this high-end OLED monitor.

CLSA estimates that in 2017 Samsung Display produced 450 million OLED displays, and this will grow 26% in 2018 to reach 570 million units. Samsung's current capacity for flexible OLEDs is about 330-385.

Looking at the OLED TV market, CLSA expects it to continue its fast growth. Global OLED TV shipments will grow to 2.7 million units in 2018 (up from 1.6 million in 2017). LG Display is said to shift its focus to larger panel production (65-inch and 77-inch) so this may effect the number of panels produced.

According to Business Korea, Samsung Display will ship 50 million flexible AMOLED displays to Apple in 2017. Next year that amount is set to quadruple to 180-200 million panels, as Apple aims to adopt OLED displays in more iPhone models.

Samsung will produce all of these OLEDs bound for Apple at its A3 fab. Initially SDC aimed to construct a new fab for Apple (the A5 fab) but earlier reports suggested that these plans have been delayed. Samsung managed to increase the yields at its A3 line from 60% in early 2017 to around 90% today.

Analysts from CLSA returned from a journey to Asia with some interesting notes on the OLED industry. According to CLSA, spending in the OLED industry has peaked and OLED producers are not expecting to place any new equipment orders in the near future. This coincides with IHS estimates of over supply in the flexible OLED market in 2018.

According to CLSA, Samsung has a current capacity in its A3 and A4 (which should be ready by Q2 2018) OLED fabs to produce about 330-385 million OLED displays per year (11 lines, each about 15,000 monthly substrates) which SDC expects to be enough to satisfy Apple's and Samsung Electronics' demand. SDC does not see a strong demand from China's smartphone makers, surprisingly, due to the high cost of OLED displays. Without demand for larger displays (tablets/laptops) or perhaps for foldable devices, SDC's seem to be content with its current OLED capacity.

LG Display announced that it has started mass production at its new 5-Gen OLED lighting fab in Gumi, Korea. The 5-Gen line (1100x1250 mm substrates) has an initial capacity of 15,000 substrates per month - about 30 times the capacity of LG's previous 2-Gen line that had a monthly capacity of 4,000 substrates.

LG hopes that the new line will enable it to produces OLED lighting panels at a much lower cost (initial estimates suggested a 95% cost reduction!) which it hopes will trigger the widespread adoption of OLED lighting globally.

In August 2016 Sharp said that it wants to collaborate with Japan Display to co-develop and produce OLED displays. JDI responded saying that Sharp did not actually reach out regarding such a collaboration, but it seems that Sharp did not give up on that idea.

Sharp's stock returned to the Tokyo Stock Exchange first section after a year of absence, and the company's president told Reuters that it is going to ask Japan's government it help it form an alliance with JDI. Sharp is also considering an investment in JOLED.

In June 2017 JOLED announced that it started to sample 21.6" 4K OLED panels, with plans to initiate low volume production at its 4.5-Gen pilot inkjet production line. JOLED announced today that it has began commercial shipments of these panels. We do not know JOLED's first customer but it is likely to be Sony.

JOLED says that it has now achieved the necessary product quality and production yields. The product was already selected for use in medical monitors (again, we believe this is Sony, who we know received JOLED's first samples and already has its own 25" OLED medical monitor that uses Sony's own OLEDs). JOLED also aims to ship these panes to other OLED monitors applications.

Samsung recently announced its financial results for Q3 2017, and Specifically regarding its OLED business, SDC increased its sales of flexible OLEDs, but prices of rigid OLED panels declined. DSCC estimates that the utilization at Samsung's OLED fab fell from mid-80% to mid-70% mostly due to delays in shipments to Apple.

The low utilization rate resulted in a decline in OLED operating income, which fell 37% from Q2 2017. Revenues actually increased (as you can see in the chart above), but pricing pressure on rigid OLED panels meant that SDC's OLED operating margins fell from 22.5% in Q2 2017 to 12.4% in Q3 2017. DSCC estimates however that OLED profitability will rebound quickly as Apple are likely to increase iPhone X shipments and as utilization and yield improve. The higher demand for higher-cost flexible OLEDs are likely to enable SDC to return its operating margin to over 20%.

A few days ago we reported that BOE started to produce flexible OLED displays at its Chengdu B7 fab, and yesterday the company held an official ceremony during which it demonstrated its first batch of flexible OLED panels, and delivered samples to representatives from Huawei, Oppo, Vivo, Xiaomi and others Chinese phone makers - although its not clear whether any of these are already acquiring panels.

The first panels produced by BOE are 5.5" in size with a resolution of 1440x2560 (QHD) - these are smartphone panels that will be adopted in an edge-type configuration. BOE says that its production line is highly automated, and BOE's panels come with a touch layer already laminated. The whole panel is just 0.03 mm thick.

IHS Markit says that global AMOLED production capacity is set to grow from 11.9 million square meters to 50.1 million sqm in 2022 - that's a 320% growth in 5 years. Samsung and LGD will remain the market leaders and Korea will have a market share of 71% in 2022 (down from 93% in 2017). China-based OLED makers will have a market share of 26% in 2022 (up from 5% in 2017).

IHS says that the majority of OLED capacity will still be used to produce RGB (direct-emission) OLEDs in 2022. RGB OLED production capacity will grow from 8.9 million sqm in 2017 to 31.9 million sqm in 2022. WOLED (WRGB) OLED TV panel capacity will grow from 3 million sqm in 2017 to 18.2 million sqm in 2022.