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Musings From An OLED Advocate

Musings From An OLED Advocate

The OLED Association, an industry-based organization, provides a forum for the interchange of technical and global market information, and regularly updates its members on developments.

Display

Coronavirus adds complexity to panel pricing issues

The panels industry has seen at least four issues that play into panel pricing over the last few weeks, and while overall panel pricing is expected to stabilize, each application category has its own characteristics for February. All in, coronavirus is the most impactful, and in the short term it will be more difficult to maintain consistent output as some workers remain in quarantine or are facing restricted travel, while dormitory living for many factory workers could increase the risk of the virus spreading. Perhaps over time this will lessen, especially if the spread of the virus is limited, before things return to more normal buying patterns. The interim trade agreement would have had a bigger impact on the Chinese consumer electronics economy if coronavirus had not occurred at roughly the same time, and while the agreement likely assuages the fears of industrial buyers, the virus, at least temporarily increases them. LCD capacity reductions in South Korea and Chinese LCD expansion likely increase the disparity between smaller and larger TV prices with timing the essential pointer toward price patterns for the year 2020.

BOE adds area to its leadership in LCD TV panel production

BOE overtook LG Display in 2019 as the market-share leader in LCD TV panel area shipment, according to IHS Markit. BOE shipped the most LCD TV panels since 2018, and now leads in area shipments. Until the coronavirus epidemic, Chinese display makers have been increasing their market share as LG Display and Samsung Display began exiting the LCD TV panel production market. In 2019, BOE posted a 23.8 percent on-year increase for TV LCD area shipment of 30.1 million square meters. In the second place, LG Display posted a 10.3 percent decrease to 28.300 million square meters. Samsung Display came in third with 21.79 million square meters to show a 19-percent decline. CSOT was at 21.2 million square meters after a 19.4-percent increase. Innolux was fifth with 20 million square meters. Among the LCD panels for TVs shipped in 2019, 45.2 percent were 4K panels up 6.1 percent YoY 39.1 percent in 2018. LG Display increased their share 6.3 percent YoY to 34.4 percent in 2019, passing JDI, the previous leader. BOE is active in this segment, increasing its share from 7.6 percent in 2018, to 11.3 percent.

Covid-19 pushes LCD panels price up in February

WitsView reported some LCD TV panel prices were up or flat in February. On February 10, both Samsung and LGD fabs restarted partial operations; however, full production is not expected until early March at the earliest owing to a lack of components and workforce. TV panel prices increased for the first time since November 2016, and more price increases are anticipated in March.

Production

Samsung and LG Display exiting LCD production faster than expected

Samsung and LG are planning on selling a major part of their respective production line that makes LCD panels. Smaller stakeholders have an opportunity to gain a greater share of the market, now dominated by BOE and CSOT by buying out Gen 7 and Gen 8 fab equipment from Samsung and LG. Samsung and LG combine for USD 33 billion in LCD revenue or ~30 percent. LGD has already shifted to OLED TV panels and SDC’s USD 11-billion investment in QD-OLED signaled their intent to move away from LCDs TVs

Samsung Display has reportedly sold the LCD-manufacturing equipment at its Gen 8 LCD production line to China’s Efonlong. The equipment will be shipped to China next month, and Samsung will use the capacity freed up to produce quantum dot displays.

LG is looking to close a deal with another Chinese LCD-display manufacturer. The brand also wishes to sell its LCD-manufacturing equipment, which is from its P8 manufacturing line. LG will use the new production capacity to boost OLED production in its manufacturing plants in Paju. LG Display reported operating loss of KRW 422 billion, compared with an operating loss of KRW 436 billion in the third quarter of 2019, and the operating profit of KRW 279 billion in the fourth quarter of 2018. EBITDA of LG Display in the fourth quarter of 2019 was KRW 586 billion, compared with EBITDA of KRW 613 billion in the third quarter of 2019 and with EBITDA of KRW 1134 billion in the fourth quarter of 2018.

LG Display posted a net loss of KRW 1817 billion in 4Q, compared with the net loss of KRW 442 billion in the third quarter of 2019 and the net income of KRW 153 billion in the fourth quarter of 2018. The revenue increase of 10 percent QoQ was driven by a rise in sales of large-size OLED panels for TVs and plastic OLED (P-OLED) panels for smartphones, which also resulted in an 18-percent increase of ASP compared to the previous quarter. LG Display achieved a rise in P-OLED shipments, as it improved the TFE process in one Gen 6 fab in the fourth quarter. The company’s operating loss improvement on a QoQ basis was limited owing to an increase in fixed costs for full-scale P-OLED mass-production and additional costs for the company’s move toward structural innovation for its LCD business. The net loss was mainly owing to the write-off from the OLED lighting business and KRW 1.4 trillion won owing to the underutilization of the Gen-6, owing to the TFE problem in prior quarters:

  • Panels for TVs accounted for 28 percent of the revenue, 4 percent down from the previous quarter owing to LCD TV panels.
  • Panels for mobile devices accounted for 36 percent, an 8-percent QoQ increase, driven by the shipment increase of P-OLED panels for smartphones, while those for tablets and notebook PCs accounted for 20 percent and desktop monitors for 16 percent respectively.

According to the company, it will halt domestic production of LCD TV panels by the end of the year, and is now investing heavily in OLED displays that are generally thinner and allow more flexibility in device design than LCDs.

The offshoot of the Korean LCD fab closings is that captured component and material suppliers are finding it difficult to compete. LG Chem is the earliest supplier to announce the closing of a key component for LCD production, glass substrates, at its facility in Paju, South Korea. LG Chem announced back in 2009 that it would enter the display substrate business with an investment of USD 2.5 billion over 9 years, and a partnership with Schott a German specialty glass producer. At the time, they were competing with Asahi Glass, NEG, and a JV between Corning (GLW) and Samsung Display, which Corning bought out Samsung’s 42.3 percent share in late 2013. When the initial LG Chem investment was made, the company expected to produce 50 million square meter of glass, and generating USD 1.7 billion in sales by 2018. The business actually generates ~USD 40 million annually.

The SDC/Corning JV remains a supplier to SDC under a 10-year contract signed in 2013, but Corning has been either taking that capacity off line or converting it to Gorilla Glass production as LCD production has slowed. Local Korean press has indicated that Corning has been taking voluntary resignations as South Korean glass demand slowed, and has concentrated resources for glass substrates in China to support the base of Gen 8.5/8.6 LCD fabs.

While the closings will take place in 2020, the effect, relative to previous expectations for fab ramp, would continue into 2021, with the greatest reduction in that year. If the P10 Gen 10.5 Paju fab remains on schedule, it would account for a slight decrease in the cumulative reduction, and all of the decrease in 2022. Without the P10 fab, LG Display would have no large-panel (TV) production-capacity increase by the end of 2020. From 2019 to 2022, the cumulative reduction in LG’s TV capacity will be 75.4 percent, which will reduce the industry’s LCD TV capacity by 8.4 percent

Televisions

Sharp to offer OLED TVs in Japan

Sharp plans to offer OLED displays in 55-inch and 65-inch sizes, at a premium starting price of 300,000 yen (around USD 2700), as the company joins the big players in the OLED market, soon as March/April. The Japanese TV brand was the biggest seller of televisions in its home nation in 2018, though the past year saw it slip to the third place behind Panasonic and Sony, both of which use OLED panels in their high-end sets. Sharp is betting on OLED in a bid to reverse that slide, not long after Chinese manufacturer Hisense announced it was ditching the technology in favor of its own proprietary DuelCell LCD panels. Sharp is not the only new OLED player in town, either, with both Xiaomi and Vizio recently announcing their intention to embrace the tech. The budget-priced Hisense O8B OLED suffered from a buggy-smart platform and inconsistent viewing quality, and the industry is wary of seeing Sharp face similar issues. Technically, this is not Sharp’s first foray into OLED – it showed off a 30-inch rollable OLED model last year, and various reports over the last couple of years have suggested it was looking to produce conventional OLED sets. But the reliance on LG’s larger-scale panels shows a shift in direction.

Competitive technology

Development of combined RGB LEDs promises microLED cost reduction

Seoul Viosys Co., Ltd. and Seoul Semiconductor Co., Ltd. announced the development of their Micro Clean LED, a single-pixel RGB micro-LED technology that enables the design of 4K-resolution TVs with 42-inch to 220-inch displays. By combining technology capabilities from Seoul Viosys – epitaxial EPI growth of red, green, and blue LED chips, as well as proprietary mass-transfer technology for single-pixel RGB μ-level chips – and Seoul Semiconductor – optimized surface mount technology (SMT) to increase production capacity, and tiling technology for substrate connectivity, they enable the production of customized display screen sizes. The Micro Clean LED technology resolves several challenges in the manufacturing of microLEDs, which will bring cost reductions by combining three (RGB) LEDs in a single-pixel package, including transfer technology, consistent color mixing, and the ability to control individual color and light intensity. South Korean LED maker Seoul Semiconductor Co. Ltd. and its ultraviolet (UV) LED product-manufacturing subsidiary, Seoul Viosys Co. Ltd. have showcased Micro Clean LED, a single-pixel RGB microLED technology that enables the design of 4K-resolution TVs with 42-inch to 220-inch displays.

SEMES IJP for QDs substantially lower cost than comparable Kateeva tool

Reports from Korea indicate that SDC chose the SEMES IJP because it was substantially less expensive than the competing Kateeva tool even though it was unproven in mass production. The loss is a major blow to Kateeva, but the company believes they have an advantage in printing OLEDs. With the selection of SEMES, the IJP market is getting crowded as Panasonic supplies the tool for JOLED, and TEL also has a competitor.

Removing the luminance limitations of green LEDs

Researchers from the University of Sheffield have devised a new fabrication process for green InGaN microLEDs that achieves high-brightness compact microLED arrays. Most green InGaN microLEDs are produced by combining a standard photolithography technique with subsequent dry-etching processes on a standard III-nitride LED wafer. The researchers found a way to avoid the dry-etching processes, which damage the surface of the resulting LEDs. In the new process, the InGaN stack is directly grown within the pre-patterned micro-hole arrays through a thin (500nm) SiO2 layer serving as a GaN template over the epitaxial wafer. The researchers use metalorganic vapor-phase epitaxy (MOVPE) to fabricate the individual microLEDs, which are selectively overgrown within each micro-hole. The micro-hole masks offer a natural surface passivation around each microLED, which can greatly simplify the device fabrication. All the µLEDs in the array share a common n-contact, while all the p-contacts are left open, which can then be contacted either individually or across large areas. The researcher produced a few thousand 3.6 µm microLEDs, arrayed across a 0.1-mm2 surface and calculated that an individual 3.6-μm microLED could be brightly lit at an ultra-low driving current of 0.3 µA under a 2.5V bias. A 640×480 pixel display, built around such LEDs, would only draw 0.23W.

Leftovers

JDI finally gets their bailout from Ichigo

JDI inked a deal to get up to JPY 100.8 billion (USD 918.87 million) from Ichigo Asset Management, a Japanese investment company. The company terminated its memorandum of understanding (MoU) with Suva Investment Holdings, a group of investors from China and Taiwan, it signed last year to get USD 715 million. Under the terms of the deal, Ichigo will gain control of the company as The Innovation Network Corporation of Japan (INCJ) will lose control but will retain a stake in the company. Stakes of other investors of JDI will get lower. No mention was made of the USD 800 million that JDI currently owes Apple.

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