The gist of it: Samsung and LG are going to have two bad quarters, maybe three, maybe four. That’s going to tighten up purse strings, and reduce commitments. Apple’s probably looking at some sort of bigger market turnaround, M3 3 nm chip yields, and a refresh of its laptops and computing products no earlier than 2024. Companies that move financial markets in their own countries are wary of what the immediate future holds. Nothing else has changed about the future of OLED manufacturing.
As Apple’s worldwide developer conference (WWDC) comes into view in June, there’s endless chatter and speculation about the company’s intentions. That chatter is bleeding into chatter around OLED display manufacturing. The expectation is that future iPads and MacBooks, through 2024-25, are supposed to have OLED displays and Samsung and LG will build those displays, and use Gen 8 OLED production lines. To date, neither company has placed orders for the key equipment needed to construct these lines. This puts the profitability of Gen 8 OLED production under a cloud and it all has to do with Apple’s existing MacBook sales continuing to slip.
Apple is an iPhone Company
Apple reported a 31% year-on-year decrease in MacBook revenues to $7.168 billion during its fiscal second quarter of 2023 (January to March), marking the second straight quarter of plunging MacBook sales. Apple is still an iPhone business, and that seems to be where all the profits and opportunities lie for the company. Even though there are indications that the company is going to refresh the MacBook Air line with a 15-inch display, it will use the M2 chipset, there being some issues with TSMC’s 3 nm yields on the M3, and that’s left even the Apple faithful feeling a little let down.
Samsung’s plans to spend about $3 billion building Gen 8 OLED lines through 2026 has been well documented but, neither Samsung nor LG seem in any rush to buy the necessary equipment. Meanwhile, Canon Tokki, the maker of deposition machines for Gen 8 OLED lines, is demanding that Samsung cover both machine costs and development fees and both Samsung and LG are telling their suppliers that they cannot pay more for Gen 8 equipment than they did for Gen 6 equipment.
All of this angst about the future of Gen 8 OLED production is may open the door for Chinese companies, such as BOE, to play catch up while Samsung and LG are in a holding pattern. It is all going to depend on the degree to which manufacturers with shareholders and fiscal responsibilities are comfortable with an upturn in future business to pull the trigger on more investment.
