Omdia (IHS) - Page 12

IHS says that flexible displays are an "increasingly important segment of overall display market revenues", and by 2024 flexible displays (mostly OLEDs) will grab 15% of the total flat panel display market.

Flexible display production will grow at a compound annual growth rate (CAGR) of 44% from 2014 - to reach $23 billion in 2024. The growth may actually accelerate when display makers start to produce rollable, foldable and stretchable panels and devices.

IHS says that display shipments for smartwatches will grow 250% in 2015 to reach 34 million units, mostly due to the new Apple Watch. IHS says though that shipments will fall in Q4. AMOLED displays will be the leading display technology with 58% of total smartwatch displays shipped in 2015.

Apple's Watch uses 1.34" plastic-based AMOLEDs produced by LG Display (IHS estimates that this display costs $20.5). The Watch will make up 84% of all AMOLED shipments in this market and 49% of total displays.

IHS says that flexible AMOLED shipments reaching about 25 million displays in 2015, or 11% of the total AMOLED market in 2015. AMOLED shipments will grow to about 400 million in 2019, and flexible OLEDs shipments will grow to over 100 million units - or over 25% of the total AMOLED market.

Device makers are adopting flexible OLEDs in smartphones and wearables, to differentiate their products from those that use rigid displays. Flexible OLEDs are especially useful in mobile devices because they are thinner and lighter - and of course they enable new design options.

IHS estimates the cost of materials in the Apple Watch (sports edition) to be $81.2 ($83.7 including the cost of the watch production itself). The most expensive component is the flexible OLED display which costs $20.5 - this is the glass covered display. Other components include the CPU ($10.2), the memory ($7.2) and the power management unit ($5.5).

The display is reportedly made by LG Display, and is a 1.34" diagonal panel with a resolution of 272x340 (290 PPI). The display cost includes TPK's ForceTouch layer. In 2014 DisplaySearch estimated the display would cost $27 to produce (assuming 60% yields).

Market research company IHS says that the Galaxy S6 Edge costs about $290 to build (that's the 64GB model sold on Verizon) - and the flexible curved super AMOLED display (5.1" 2560x1440, 577 PPI) costs $85. Just for comparison, the GS5 BOM was estimated at $256 (and the regular GS6 is probably somewhere in between).

Other expensive parts include the application chip ($29.5), the 3GB of DDR4 memory ($27) and the 64GB flash memory ($25).

According to IHS, the OLED TV market will see slow growth unless producers manage to apply new technologies - mainly printing processes based on soluble materials and flexible substrates. If both technologies are to be adopted, IHS sees OLED TV shipments reaching almost 40 million units in 2023.

In the chart above, IHS Uses three cases. In Case 1, OLED TV makers use glass substrate and an evaporation process. In case 2 they adopt a printing process and soluble materials, and Case 3 assumes a flexible substrate is used as well.

IHS says that OLED displays will make up 75% of all flexible display shipments in 2015. And this will pretty much continue until 2023 at least, as foldable tablets and large flexible OLED display will make OLED the leading flexible display technology in the foreseeable future.

The second most popular flexible display technology will be e-paper, but these kinds of displays will mostly be used for wearable applications. The major advantage of e-paper is the extremely low power consumption.

IHS estimates the current OLED lighting market (at the panel level) at $2.7 million in 2014, and says that the market will grow tenfold by 2020 - to reach $26 million. IHS expects panel prices to drop 40% in the next several years, but OLEDs will still not be able to compete with LED lighting, and this is why it does not expect OLED lighting to really emerge as a mass market in the near future.

A Philips OLED installation

IHS is rather pessimistic, and other analysts see panel prices dropping much more quickly and volumes rise at a much more dramatic rate. IDTechEx for example see a $200 million panel market in 2019 that will grow to $1.9 billion in 2025. Cintelliq sees OLED competing with LEDs in 2016, and 500 million 100x100 mm OLED lighting panels produced in 2023.

IHS estimates that the wearable display market will grow very quickly in the next few years and revenues will climb from $300 million in 2014 (54 million panels) to $22.7 billion by 2023 (800 million panels).

It's likely that the majority of those wearable devices will adopt flexible OLED displays. IHS explains that wearables are best viewed as functional fashion accessories, and this market is defined by design. This means that wearable products must be adaptable to various forms which requires flexible displays. Wearable displays also require outdoor visibility and low power consumption.

According to IHS, Samsung's Galaxy S5 costs about $256 to make, and the most expensive component is the 5.1" FHD Super AMOLED display which costs $63. That's actually cheaper than the 4.99" display on the GS4 which was estimated at $75 back in 2013 by IHS. In 2013, DisplaySearch estimated the GS4 display at just over $60.

According to reports from Korea towards the end of 2013, Samsung Electronics indeed asked Samsung Display to reduce its AMOLED prices in an effort to reduce smartphone costs (even though IHS esimates that the GS5 costs about $20 more than the GS4, even with the cheaper display). Then again it may simply be that DisplaySearch were correct and the $60 price remained the same even though the new display is a bit larger and performs a lot better.