One of the overall impressions of the SID this year was that there were few OLEDs on view. As I mention in the main report, published in Display Monitor, I think this is because Samsung is clearly in the lead in developments in this market, but is concerned about giving away too much information to competitors. LG has responded to this by also hiding its OLEDs. That’s a shame and might give reporters that are not as close to the market as specialists, such as Display Monitor, the idea that OLED is not important or ‘not winning’. It is very important, because OLED is important, or even critical, to the Korean makers.
Samsung and LG are completely dominant in terms of market share in LCD and in all of the FPD market. However, as David Barnes said in his excellent talk at the business conference, there is strong evidence that sheer scale doesn’t help you to control a market in LCDs as it does in some other industries, such as semiconductors. I think there are some good reasons for that which may be the result of the industry structure and history, but I’ll need another editorial to discuss that!
OLED, on the other hand, offers a chance for them to put, as our UK politicians like to say, ‘clear blue water’ between themselves and their competitors in Taiwan and, in the future, in China. Japan seems to have lost all appetite for major display investments, although Sharp, Panasonic or Toshiba could change that. Chinese companies, such as Tianma, want to get into OLED, but it will be a huge technical challenge. There’s a big technical risk, but the reward could be really profitable business.
It’s intriguing to see how Samsung and LG are approaching this risk. While Samsung has committed huge technical resources to OLED, LG Displays is a little more cautious, and probably has to be – as a separately listed public company, it is more isolated than Samsung’s display business. I’m grateful to my friend, Alfred Poor, another veteran display commentator, who spotted that while Charles Annis of DisplaySearch had a new OLED fab on the production roadmap for LG, the company was not listed as having a roadmap for a substantial polysilicon backplane fab. That’s because LG has a plan to use Oxide TFTs for its OLED backplane (Oxide TFTs were a big talking point at SID) rather than polysilicon and the reasoning seems to be that if the OLED adventure doesn’t work out, the Oxide TFTs could be used for LCDs. Polysilicon could also be used for TFTs, but is likely to be less competitive, we think.
If LG’s oxide and OLED plans hit a technical or production road block, it would be much easier to switch the production to LCDs than for Samsung. Samsung on the other hand, is committed! Personally, in business, I prefer the committed, so my bet is on Samsung’s strategy, but it is higher risk, and, of course, potentially higher reward.
I hate using this phrase, but in this case it’s true to say that only time will tell which was the better risk strategy. However, for both of the companies, the risk is much, much less than for the Chinese, although they have the Chinese government to bankroll them. For the entrepreneurial Taiwanese, the risk may just be too great to stay in the game.