TCL CSOT - Page 8

Market analysts from DSCC say that the low utilization rates at Samsung Display has caused the company to delay its capacity expansion plans. SDC's decision to delay its A5 fab has already been discussed, but DSCC now says that Samsung is also significantly delaying the ramp-up at its new A4 line. DSCC estimates that SDC will delay this new line by at least a year.

LG Display has also reportedly cancelled the first phase of their next flexible OLED line, the P7 (which can be a conversion of LGD's old P7 LCD line). DSCC sees LGD ordering equipment for a new flexible OLED line only at the beginning of 2019.

Financial analysts from CLSA released an interesting short report about OLED demand in China. According to IDC, OLED smartphone shipments in China was down 6% in Q4 2017 (compared to Q4 2016) to 36 million units - in line with total Chinese smartphone weakness (-8% in the same period). Total OLED smartphone shipments in 2017 reached 128 million, up 8% compared to 2016. OLED penetration was up only 1% (to 15%) in 2017.

CLSA sees lower demand in 2018 and 2019 compared to early estimates - 175 million in 2018 and 225 million in 2019. That's 11% (2018) and 20% (2019) lower than CLSA's earlier estimates. CLSA is less optimistic than before regarding the ramp-up at Tianma, Truly and CSoT.

In August 2017, Japan Display announced a strategic focus on OLED displays as the losing display maker failed to keep up with the industry shift to OLEDs. JDI announced it will raise funds to accelerate its OLED plans and prepare for mass production in 2019.

In October 2017 Japan Display estimated that it will require more than 200 billion Yen (around $1.77 billion USD) to start mass producing OLEDs in 2019, and the company started reaching out to display makers in China and Korea as finding a partner in Japan is difficult. JDI hoped to finalize its financing by March 2018, but according to a new report from Japan the investors in China, while initially eager to participate, are now hesitating.

Many OLED producers believe that Ink-Jet printing of OLED emissive materials is the best way to achieve lower-cost OLED TV production, and to enable OLEDs to compete in the medium part of the TV market. Ink-Jet printing is an efficient process (less material waste compared to evaporation) and it can be very quick as well. The main drawbacks of inkjet are the limited resolution and the need for soluble emissive materials which are less efficient compared to evaporation ones.

A Kateeva OLED ink-jet printing system

These challenges are being overcome, and it seems that at least four groups (in Korea, Japan and China) are charging forward towards mass production of ink-jet printed OLEDs. Ink-jet printer makers and soluble material suppliers are also optimistic ink-jet printing commercialization will soon be here as the material performance gap is diminishing.

In June 2017 CSoT launched the construction of its new Wuhan 6-Gen AMOLED fab (the T4 fab). This $5 billion fab is expected to begin production in Q2 2019, with full mass production achieved by 2020. The fab's capacity will be 45,000 substrates per month, and it will be used to make small and medium-sized flexible and foldable OLEDs.

Yesterday CSoT held a ceremony to mark the building main concrete structure complete - 13 days ahead of schedule and 153 days since the beginning of construction. The next steps will be the construction of the clean rooms and moving in the equipment.

IHS analyst David Hsieh posted a very interesting article that discuss the global OLED industry with a special focus on China. Samsung is expected to retain its lead in this market - and will more than double its capacity between 2017 to 2022.

In five years (2022), Samsung will have a capacity to produce 16.6 million square meters of RGB OLED displays, or 52% of the global capacity. SDC will be followed by LG Display (11%), Tianma (6%), CSoT (5%), Visionox (4%) and EverDisplay (4%).

Market research company DSCC has updated their OLED models, as the company sees more capital spending then before and a larger OLED market going forward.

The OLED market in general will grow 57% in 2017, according to DSCC, to reach $23.2 billion. Growth will continue to be strong with a 50% increase in 2018 (to $34.9 billion) and a CAGR of 27% from 2016 to 2022. In 2022 the market will surpass $60 billion.

In August 2017, Japan Display announced a strategic focus on OLED displays as the losing display maker failed to keep up with the industry shift to OLEDs. JDI said it will need to raise new funds in order to accelerate its OLED plans and prepare for mass production in 2019.

JDI estimates that it will require more than 200 billion Yen (around $1.77 billion USD) to start mass producing OLEDs in 2019. JDI is now looking for financing partners that will help fund the company's OLED project. It is estimated that it will find it difficult to find a partner in Japan and so JDI is looking for Chinese and Korean display makers. According to the Nikkei Asian Times BOE and CSoT already expressed interest.

AP Systems announced that it has received orders for OLED deposition equipment from CSoT for the company's 6-Gen flexible AMOLED fab in Wuhan that is currently under construction.

AP Systems said that the whole order is worth $60.65 million and the equipment will be delivered starting in September 2017 until October 2018. AP Systems did not disclose the equipment list, but the company's main products are laser annealing equipment (used to produce LTPS substrates), laser list-off equipment and OLED encapsulation tools.

In April 2017 it was reported that TCL-subsidiary China Star Optoelectronics Technology (CSoT) decided to construct a 6-Gen LTPS flexible AMOLED production line in Wuhan, China, in a $5.08 billion investment. Yesterday the company officially started the construction of the new display fab.

The new production fab is expected to begin production in Q2 2019, with full mass production achieved by Q1 2020. The fab's capacity will be 45,000 substrates per month, which will be used to make small and medium-sized flexible and foldable OLEDs.