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.
According to CLSA Samsung is constructing the A5 6-Gen flexible OLED fab building (which will take 9 months to finish) but is delaying orders for production equipment. SDC's Capex will be down quite a bit in 2018 as it is delaying the A5 fab. This was already suggested two months ago.
CLSA has also visited China's Visionox and BOE. Both companies are now busy integrating the OLED equipment and ramping up production in existing fabs and do not see any new equipment orders until late 2018, and that is only in the case that yields improve and production stabilizes.
BOE began production in its B7 flexible OLED line in Chengdu a few weeks ago, and according to CLSA it can currently produce around 4,000 monthly substrates. The company is confident in its ability to ramp up and expects to be able to produce 16,000 monthly substrates in June 2018. BOE is already constructing its second flexible OLED line and is reportedly also considering a third fab (which contradicts CLSA's estimates).
Visionox has started mass producing AMOLED panels in June 2015 in the company's Gen-5.5 AMOLED line in Kunshan. CLSA says that the company's current flexible OLED capacity is 11,000 monthly substrates, in addition to 4,000 monthly rigid substrates. Visionox's 6-Gen fab in Hebei, scheduled for mid 2018 will eventually have a capacity of 30,000 monthly flexible substrates.
Finally CLSA also met with Sony - and the company is not bullish on OLED TVs, according to CLSA, preferring to focus on LCDs with its large supply. According to earlier reports orders for Sony's first OLED TV were higher than expected and Sony actually asked LGD to increase shipments.
