OLED – OLED technology is the designated prince of the display technology world. We have seen it rise from a novel technology to the first products released 17 years ago. The question is when will it take over the display world in the same way that LCD kicked other display technologies out?
In a recent article we reported on the South Korean government’s announcement of a focus on OLED and flexible displays in the coming year. The government will spend $11 million, more than double the amount in the year before. The money will go through KEIT (Korea’s Evaluation Institute of Industrial Technology) and benefit core technology research. KEIT will also look at special materials to allow OLED technology to be used in special applications, such as the automotive sector.
All this for a technology that is already very strongly influencing the mobile sector. The best mobile display according to Ray Soneira from DisplayMate is Samsung’s AMOLED display. One would expect that this is enough to have this display technology beat out LCD all by itself. However, it appears that Samsung still has some hurdles to overcome.
Similar to the development of the LCD industry, OLED manufacturing has its own set of challenges that need to be addressed. About a year ago, Business Korea reported that LG had achieved 60% to 70% manufacturing yield in large panel manufacturing, while Samsung was still hovering at 40% to 50%. According to the article, both companies would reach 70% manufacturing yield by the end of 2013, at which point manufacturing of OLED TVs would only be 15% more expensive than LCD. This in turn would allow OLED to become competitive in the market.
Looking at TV pricing in the market today, LG thinks that an OLED TV commands a 5x price over a comparable LED LCD TV. This is far from my definition of competitive. This is based on a comparison of the 55″ and 65″ LG TV models available in the USA today.
If LG is indeed producing these panels at a 70% yield, the price premium should be less than 50% instead of the current 500%. This is true as long as the bill of materials and labor are comparable between the technologies. If this is not the case the question for OLED will be – how low can you go?
In an article from Trusted Reviews earlier this year, Panasonic expressed its view that OLED is just not where it needs to be price-wise to really address the TV market. Now, Panasonic is buying OLED panels from either Samsung or LG for the moment, if it does not see a way to be competitive, the panel prices are indeed just too high. Interestingly Panasonic also expressed the view that in the long run OLED will succeed in taking over the TV market.
There is an argument to be made that LG and Samsung both do not have the manufacturing capacity to actually support a successful OLED TV launch. This raises the question why neither of the two market leaders at this point do not invest heavily in OLED manufacturing capacity in a bid to dominate the OLED TV panel market for the near future.
As a comparison between OLED and LCD, we have to realize that the first LCD product was launched in 1973 (Sharp’s pocket calculator) and it took until 2008 when LCD TV outsold CRT TV for the first time on a global basis. This journey took 35 years. The first OLED product was launched in 1997 (monochrome display in a car audio system), which would make it the year 2032 before OLED takes over the reign in the TV market. That is if we still have a TV market by then.
Of course this is a bad comparison and many arguments can be made why this will not be true, and I personally expect this takeover to happen sooner than that. However, unless 9 out of 10 future display factory investments are for OLED factories, 2032 seems as good a target for crowning OLED as any other. – Norbert Hildebrand