UBI - Page 8

Market Analyst UBI Research estimates the flexible OLED shipments used by Apple iPhone will grow from 34 million panels in 2017 (in which Apple will, according to UBI, launch its first OLED phone) to 518 million panels in 2021 - surpassing Samsung Electronics that will sell 298 million flexible OLED smartphones.

This is a bold statement by UBI - especially as flexible OLEDs have been used by Samsung for years now with great success, and the company is actually planning to adopt foldable OLED displays in future devices - which may completely revolutionize the segment if successful.

In early 2016 UBI Research estimated that LG Display will produce 1.2 million OLED TV panels in 2016, and 8.1 million in 2020. But now UBI Research reduced those estimates by around 20-30% to 800,000-900,000 panels in 2016 and about 6 million in 2020.

The reason for this reduction is the fact that LG Display is producing more 65" panels then estimated. We have heard this several times before - LGD sees larger than expected demand for 65" OLED TVs, and is producing more larger panels as a result. Because the company's total area production capacity is limited, this means that the total amount of produced panel is lower

UBI Research says that 4" to 6" AMOLED panels shipments will reach 318.8 million in 2016 - up 27% compared to 2015. The fast growth will continue to reach 505 million in 2017, 902 million in 2018, 1.17 billion 2019 and over 1.35 billion in 2020.

Flexible OLEDs will lead this growth as the new displays will be increasingly adopted by display makers globally. In 2016, flexible OLEDs will amount to 22% of the OLED market, but this will grow to 56 in 2018.

UBI Research says that the OLED lighting market will grow rapidly in the near future (a CAGR of 66% in 2017-2025) to reach $1.6 billion in sales by 2020. LG Display will lead the market with a market share of 53% (in terms of revenue).

UBI estimates the OLED lighting market in 2016 at $114 million, and LGD's current market share is 15% (or $17 million in sales).

According to UBI Research, LG shipped 140,000 OLED TV panels in Q2 2016. The company shipped 28,000 65" OLED TVs in Q2, double from the number of 65" panels it sold in Q1 2016.

UBI says that the OLED TV market has started to gain sales momentum as more companies besides LG are adopting OLEDs in their high-end TVs. LG is focusing on 65" panels as the price gap compared to high-end 65" LCDs is lower than the price gap in 55" TVs.

In past month there were dozens of reports stating that Apple will adopt an OLED display in its 2017 or 2018 iPhone and that Apple signed an agreement with SDC to be its first OLED supplier. Apple will require a huge amount of OLED displays, even if the first device will be a premium iPhone model, which will require large capacity expansion from SDC (and other suppliers that Apple will probably need to sign up).

According to UBI Research, Apple's decision to adopt OLED displays in its iPhones will result in $13 billion of production equipment orders by 2020. The capacity required for Apple will take up 47% of the global equipment market for 6-Gen flexible OLEDs ($28.5 billion in the next 5 years, according to UBI).

UBI Research says that the total OLED market reached 91.3 million units in Q1 2016, and Samsung Display produced about 86.7 million panels (95% of the total OLED market).

UBI further estimates that Samsung produced 12.1 million flexible OLEDs for its Edge-type phones (14% of its total OLED shipments).

UBI Research's president Lee Choong-hoon says that Apple is set to adopt OLEDs in its phones, and the company will release an iPhone with a curved OLED display in 2018. The curved iPhone will make up for 30% of total iPhone sales (about 100 million units) - but this will rise to 80% to 2020.

In fact, by 2021, Apple couple be the largest OLED customer - buying more OLEDs than Samsung Electronics. Samsung is currently using OLEDs in about 70% of its smartphones.

UBI Research says that the OLED materials market is set to grow at a CAGR of 46% from 2016 to 2021, to reach $4.3 billion. In 2016 itself OLED emitters will record $677 million - a 16% increase from 2015.

This fast growth will mostly come from AMOLED smartphones and OLED TVs. In 2016 Samsung and LG will buy the majority of those materials (about 94%) - but going forward more producers, especially in China, will join the market.

According to UBI Research, the market for OLED emitting materials grew 17% from 2014 to 2015. Universal Display (the top supplier in terms of revenues), Dow Chemical and LG Chem saw a decrease in sales while Novaled, Idemitsu Kosan and Samsung SDI saw improved revenues.

Samsung Display is the largest OLED producer by far, and so when it changes suppliers it changes the whole market. UBI says that in 2015 Idemitsu Kosan, the second supplier in terms of revenue started delivering blue fluorescent emitters to Samsung Display, and also enjoyed the ramp-up in OLED TV production by LGD.