Universal Display Corporation (UDC) - Page 11

Universal Display announced that the company will invest $15 million in PPG Industries' OLED facility in Barberton, Ohio. PPG will double its commercial production capacity of UDC's phosphorescent OLED emitter materials. The capacity expansion is scheduled to be completed in the third quarter 2017.

PPG Industries and UDC established a strategic relationship in 2000, and PPG is the exclusive producer of UDC's PHOLED emitter materials. In 2013, the two companies opened this OLED production plant in Barbertron as demand for OLED materials increased.

According to a story on ETNews, Samsung aims to use a full-screen display in its next flagship phone, the Galaxy S8. To achieve such a display, Samsung is using a flexible AMOLED that is wrapped around all four sides of the phone (unlike its current edge phones that are cured on two edges only).

ETNews also says that SDC is set to update its OLED material recipe. The so-called M7 iteration was used in the Galaxy Note 5, the GS7 and the Note 7. But now Samsung is updating its recipe to M8. You can see the different suppliers in the chart above. Most materials are sourced from the same supplier, but of course the suppliers are offering newer, updated materials and Samsung may switch to those.

Universal Display reported its financial results Q3 2016: revenues were $30.2 million (down from $39.4 million in Q3 2015) and the net loss was $1.5 million (down from $7 million in Q3 2015). UDC says that the lower revenues are due to increased customer production efficiency and product mix - and also a decline in host material sales. Royalties fees were $5.2 million, unchanged from last year.

UDC has $301 million in cash and equivalents, and in the third quarter the company generated $4.1 million. The company's guidance for full-year 2016 remains unchanged, and revenues are expected to be in the range of $190 million to $200 million.

Universal Display signed a five-year OLED Technology License Agreement and Supplemental Material Purchase Agreement with Tianma Micro-electronics. Under the license agreement, UDC granted Tianma non-exclusive license rights to manufacture and sell OLED display products based on its IPs. UDC will also supply phosphorescent OLED materials to Tianma.

Tianma is currently producing AMOLED displays in low volume in its 5.5-Gen pilot fab in Shanghai (our own sources say that these displays are not commercial yet but will be so by the end of 2016). In May 2016 the company demonstrated flexible and rigid OLED prototypes, including a 5.5" 702p (270 PPI) flexible OLED prototype with a bending radius of 20 mm.

Universal Display announced its financial results for Q2 2016. Revenues reached $64.4 million (an increase of $10.8 over Q2 2015) and net income was $21.8 million. This quarter includes a $33.7 million license payment from Samsung Display. UDC results disappointed investors which expected higher revenue and earnings.

Operating cash flow in the quarter was $36.2 million and the company's cash and equivalents at the end of the quarter were $332 million (down from $395 million in the end of Q1 2016, following the $96 million BASF IP acquisition and the $36 million Adesis acquisition).

Universal Display announced that it acquired BASF's entire OLED IP portfolio, for 87 Euro million (about $96 million). BASF's IP portfolio, representing 15 years of R&D, includes over 500 issues and pending patents around the world in 86 patent families - mostly regarding phosphorescent OLED materials and technologies. BASF’s OLED portfolio has an average lifetime of 10 years.

UDC says that BASF's patents will help the company develop and deliver an all-phosphorescent emissive stack. Specifically, UDC is believing that this will help the company develop commercial blue emissive systems. Including the new BASF patents, UDC will have over 4,000 issued and pending patents

Universal Display announced that it is going to acquire Adesis, Inc - a privately held contract research organization with 43 employees specializing in organic and organometallic synthetic R&D and commercialization. UDC will pay $36 million in cash for Adesis.

Adesis has worked with UDC over the last few years, to help advance and accelerate a number of UDC's product offerings.

Universal Display developed a new AMOLED structure that is a sort of WOLED - RGB hybrid structure. The idea is to use a large blue sub-pixel and a large yellow sub-pixel that is split into three areas - unfiltered and red and green filtered.

This structure is easier to deposit compared to a true RGB AMOLED (that requires very fine patterning of red, green and blue subpixels) but increase the aperture ratio compared to a WOLED architecture (which LG for example uses in its OLED TVs) - which increases the lifetime and color gamut of the display.

Universal Display reported Q1 2016 financial result, with a net income of $1.9 million on revenues of $29.7 million (down from $31.2 million in Q1 2015). Commercial emitter revenue grew 8% and royalty and license fees increased 22% (to $5.3 million). The decrease in revenue is due to a decline in host material sales. UDC has $395.7 million in cash and equivalents as of March 31 2016.

UDC did not change its guidance for 2016 of $220 million (a 15% increase over 2015) plus or minus 5%.

Last week Universal Display celebrates 20 years on the NASDAQ, and the company's executives rang the opening bell to signal the beginning of trading on April 20. This is a nice recognition of UDC's achievements over the years.

In 2015, UDC reported 191 million in revenues - and generated $113.6 million in cash.