Samsung Display - Page 59

In August 2011 Samsung signed a long-term license agreement with Universal Display which allowed Samsung to acquire and use UDC's patented phosphorescent OLED materials. That important agreement (which generated hundreds of millions in revenues for UDC over the years) expired on December 31, 2017.

UDC announced yesterday that it is in on-going discussions regarding a formal long-term extension of these agreements (the patent license agreement and the OLED material purchase agreement). UDC expects SDC to continue buying materials during these discussions. No time frame has been established for the completion of these discussions.

Display analyst firm DSCC released a new market report on the OLED market, in which they have some very interesting estimates on the OLED market. OLED revenues reached over $5 billion for the first time in Q3 2017, and DSCC sees a huge 88% jump in the final quarter of 2017 (to $10 billion) as Samsung starts to supply flexible OLEDs to Apple.

Flexible OLED revenues are the main driver of the growth in OLED smartphone shipments, with revenues rising 37% in Q3 2017 and are expected to grow 140% (Q/Q) in Q4 2017. Flexible OLED unit share out of the entire OLED smartphone market reached 33% in Q3 and will reach 49% in Q4. In terms of revenues, the market share will grow from 66% in Q3 to 80% in Q4.

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.

DSCC estimates that 88 Million smartphone OLED displays were shipped in Q3 2017, which represents a 4% drop from Q2 2017 and a 13% drop from Q3 2016 - mostly due to delays in iPhone X shipments. Flexible OLED shipments were up 25% from Q2 2017 (30.4 million units).

Shipments are expected to grow significantly in Q4 2017, though, to reach 151 million units. Flexible OLEDs shipments (78.3 million) will grow 157% from last quarter and 544% from last year, and will surpass rigid OLED shipments (73.3 million) for the first time.

IHS says that SDC increased its lead in the smartphone display market, reaching a market share of 42.7% in Q3 2017. Samsung is followed by JDI (12.5%), LG Display (10.1%), BOE (8.8%) and Sharp (7.7%). The smartphone display market totaled $11.8 billion in Q3, a new quarterly high.

IHS says that OLED smartphone revenue reached a record high in the quarter - $5.11 billion (up 32.4% from the $3.86 billion in Q2 2017). SDC's market share in the OLED smartphone display market is 98.5% ($5.03 billion). IHS actually expects SDC's market share to increase slightly to 98.8% in Q4 2017.

Last month we posted on reports from Korea claiming that Samsung is accelerating its effort to develop a Micro-LED based TV as it aims to regain its premium-TV market share (following its failure to keep up with LG's OLED TVs).

According to a new report from Korea, Samsung is further ahead than we thought, and the company will launch a 150-inch Micro-LED TV at CES 2018 (January 2018).

UBI Research is tracking the price of premium TV sold on Amazon.com in the US. As competition intensifies, the price gap between OLED and LCD TVs keeps getting lower - to the point where is not much difference between a high end Samsung QLED TV and LG's OLEDC7 OLED TVs.

In December 2016, the price gap between a 65" LG OLED TV to a 65" Samsung SUHD TV was about $1,000. The price gap as of today is only about $300. The price gap for a 55" TV is even lower (around $200).

IHS Markit performed a teardown analysis of Apple's iPhone X, saying that the total cost of materials in the 64GB model amount to around $370.

IHS estimates the cost of the OLED display module, including the force touch sensor, is $110. KGI securities estimated the display at $120 a few months ago. The iPhone X has a 5.8" 1125x2436 Samsung-made flexible Super AMOLED display.

Samsung introduced the Diamond Pixel display architecture back in 2013 when it launched the Galaxy S4 smartphone, and since then it has adopted this sub-pixel scheme in all of its OLED displays (replacing the previous PenTile scheme).

The 2014 Galaxy S5 introduced a different Diamond Pixel scheme which Samsung uses till today. DisplayMate tested the Apple iPhone X and it turns out that Apple's OLED, even though it is produced by Samsung Display, uses a slightly different Diamond Pixels - the fill factor of Apple's display is higher than in the Galaxy phones. You can see the two different displays in the macro photos above (courtesy of Display Mate). The iPhone X OLED is on the left, while the right shows the Galaxy OLED.