Those of us who believe OLEDs have a vibrant commercial future ahead of them have had a hard time of late making our case to the infidels in the face of stagnating unit sales, falling prices and declining profits.

Ken Werner
Senior Analyst and Editor

But in its latest Quarterly OLED Shipment and Forecast Report DisplaySearch reports that 1Q’07 OLED shipments were 19.1M, up 71% year on year, and revenues were $121M, up 56% year on year, with ASP dropping by only 9%. Shipments were down 14% from 4Q’06, and the corresponding revenue was down 13%, but DisplaySearch justifiably downplayed that as a seasonal result.

Pioneer replaced Samsung SDI as the leader in sales revenue, which should tell you that passive-matrix OLEDs remain the dominant technology; AMOLED is still ramping up. Indeed, SDI’s quarterly revenue shrunk 24% year on year, while Pioneer’s grew 25%, and Pioneer even managed to post quarter-on-quarter growth, seasonality or not. LGE revenue grew 135% to take third place in the revenue derby. Fourth place went to RiTdisplay, which also posted quarter-on-quarter growth. These four top vendors are each within a tick of 20% market share. Together, they command over 80% of the market. In other words, the OLED industry continues its consolidation.

The AMOLED ramp may just be starting, but it has started. SDI, Kodak, Sony and eMagin together shipped 335K displays in 1Q, and DisplaySearch expects that number to grow to 685K in 2Q. Did your eyebrows go up when you saw that Kodak is selling AMOLEDs? These are inventoried displays from the now-defunct Sanyo-Kodak manufacturing collaboration. They were and are very nice displays, but made at crushingly low manufacturing yields. Kodak is interested in getting back in the AMOLED manufacturing game, but this time with the benefit of painful lessons learned. The main applications for the AMOLEDs being sold now are mobile phone main displays and media players. eMagin’s units are microdisplays on a silicon backplane that are used for near-the-eye applications.

Of the top 5 OLED applications, only cell-phone main displays have a significant active-matrix component. (See table.) The sharp growth in main displays was driven by Samsung finally finding a significant customer for its 2.4-inch QVGA AMOLED display. The customer is Kyocera, who stepped in when Samsung Electronics delayed making a commitment to AMOLEDs.

The big source of growth overall is passive-matrix cell-phone sub-displays, which are very popular in Japan, Displaysearch reported.

Insight Media has learned that some significant players in the AMOLED game have been holding off on making significant additional investments until Samsung SDI demonstrates it can be successful. That time is now much closer.

There are also manufacturing cost and yield issues. Alternative approaches that would increase the substrate size on which AMOLEDs can be made and increase the manufacturing yield of the active-matrix backplane are under very serious development at major companies such as DuPont and Kodak.

Today cell phones; tomorrow the world.