We had a short week after a public holiday on Monday. We were working on the report from the IdTechEx event in Berlin, but didn’t get it finished because of the restricted time. We’ll publish it on the website as we get it done and include a summary next week. We have included a report from an IHS analyst event in London last week this week.
On the front page, we have a report, directly from a key executive at Samsung Display, that Samsung will not resurrect its attempts to develop large OLED TV, preferring instead to focus on quantum dot technology. As I mention in my comments on the story, I suspect that this is more to do with the realities of business than technology. Samsung made a huge investment in engineering to try to create large OLEDs, but couldn’t make them cheaply or efficiently enough. I suspect that Samsung’s finance people have decided to limit their exposure to risk after this, especially given the push into displays in China.
I have been saying since 2007 (a report on Sony at CES 2007 in Display Monitor!) that “OLEDs have my heart, but LCDs have my head”. By this, I meant that OLEDs look fantastic, but that the economics of the technology would be challenging given the position of LCD. LG Display confirmed in its Q1 earnings call recently that it remains in the red in its OLED TV panel business, despite the high premium that it is getting for OLED TV. In that call, the firm emphasised that it needs to keep OLED at a premium to LCD to have a chance of profit – even FullHD TV OLEDs are only “above 80%” yield, while UltraHD is still behind that.
Now, Samsung said that quantum dots (QDs) are the key to future of large panels. That’s interesting, because the firm didn’t seem to say LCD with QDs. As Ken pointed out in his article last summer (http://tinyurl.com/js8avq3), micro-LED possibly including QD technology to convert the blue LED light to other colours, could be the disruptive technology that might displace LCD. As we reported in December (http://tinyurl.com/hhosksn), Osram is saying that it will be able to put QDs directly into the packaging of LEDs by the end of this year (the other QD developers are also working on this). It doesn’t take much of a leap of imagination to see these technologies combined.
In a discussion with a previous head of Samsung Display, Wonkie Chang, at IFA in 2010, I said to him “Given the outlook for the end markets of TVs, monitors and notebooks and the upcoming competition from China, I can’t imagine what you have to say to your finance people to persuade them to give you the cash you need for more LCD fabs”. He couldn’t tell me the magic words. Today, there is even less obvious evidence that such an investment would ever be profitable.
That’s very depressing if you are in the management of a manufacturing plant. In my early career, I was in the steel industry. I remember hearing from an experienced factory manager, on a training course, that “the key is to stay out of balance”. If you have some spare basic steel capacity, he said, then build some extra finishing (making strip or sheet or tubes etc), but build some excess capacity into your plans (without telling finance). After the new finishing plant is completed and into production, you go back to finance and tell them that your great production engineers have been able to squeeze out more output. If only you had more basic steel, you could use that capacity. Of course, you then over build capacity again.
By following this process, you get a continuous supply of new factories, which are fun to plan and implement. If you get into balance, the job is just about running the current site as efficiently as possible, which is much duller. The problem is, as we see now in the steel industry, is that you end up with massive over-capacity and disastrous structural problems in the industry. That doesn’t look very different from the future of LCD.
Bob
