Apple OLED
Apple (AAPL) is slow in making transitions. Whether a function of a cautious attitude toward new technology or a desire to put its own stamp on what might already be available, they take their time, where others tend to jump as quickly as possible. Of course it helps to have 1.66b active Apple users, creating a very ‘sticky’ base that is typically willing to wait for Apple to move forward, so Apple has, at the least, the luxury of exploring new technologies for a while before pushing them out to their customer base. What does make a big difference however is when Apple does adopt a new technology, whether it is early or late, it means significant unit volumes and a blessing for the Apple supply chain.
That said, Apple was a slow starter with OLED, adopting the technology in late 2017 with the iPhone X, while leaving the other iPhone models with LCD displays. In 2018 two iPhone models had OLED displays, and by last year all iPhones sported OLED displays, and while Apple sells lots of smartphones, they also have other products that could easily adopt OLED displays going forward (The Apple Watch also uses OLED). For much of this year rumors have been circulating that Apple will be offering its first iPad with an OLED display next year and would continue to spread the technology across the iPad line in 2023, likely to all but the iPad Mini, which is a smaller and lower priced offering.
Those rumors have surfaced again, with current expectations that Apple will offer a 10.86” iPad version next year with an OLED screen, albeit based on relatively mundane OLED technology. The OLED display is expected to be based on a rigid substrate (glass) but instead of being encapsulated with glass (typical for rigid OLED), it would use the same thin-film encapsulation used on most flexible OLED displays. The TFT structure is expected to be typical LTPS, the most common form of OLED backplane, with the displays being made exclusively for Apple by Samsung Display (pvt).
The reason this rumor is gaining strength comes from Samsung’s push to commercialize its IT OLED panel business, which has been exclusive to parent Samsung Electronics, and given Samsung’s goal of shipping 1m OLED notebook displays this year, we expect they have plans to increment that number again in 2022 and 2023. While we expect SDC is actively seeking a broad customer base, a deal with Apple for the iPad, even for one of four Apple iPad models, would go a long way toward both filling existing OLED capacity and justifying the expansion of same. Apple has financed such capacity expansions in the past, particularly for LG Display (LPL) and Japan Display (6740.JP), and while we expect Samsung is not in a position to need or accept financing for small panel OLED capacity, Apple would likely contract dedicated capacity, which they have done with SDC in the past, and such contracts, being as close to ‘take-or-pay’ as possible in the CE space, are a guarantee that SDC could maintain profitability for that new capacity, without significant market risk.
We note also that the surface area of a 10.86” iPad display (4:3 aspect ratio) would be equal to the surface area of four iPhone 12s (9:19.5 aspect ratio), and the relatively simplistic structure of the supposed OLED iPad would likely allow Samsung to maintain high yields and profitability, so there is some logic to the expectations. In 2023 however the rumor suggests that Apple will expand its iPad offerings to 11” and 12.9” (iPad Pro current sizes) offerings using flexible OLED and an LTPO backplane structure, which should be able to maintain profitable yields at that time, and in order to offset any criticism of the OLED iPads being less bright than their former LCD brethren, the OLED emitting structure itself is said to be a double RGB stack, a process that is being adopted by both SDC and LG Display for ‘certain’ customers.
Such a dual stack process can be used in near-eye displays that must be both high resolution and high brightness, but research has been focused on photolithography techniques for such a process that would require a significant process change and cost for high volume production. Both OLED producers have been working toward being able to run the substrate through the deposition process a 2nd time to create the double stack, without compromising the first layer rather than using a more complex approach, which is why that process is scheduled for 2023 rather than next year, giving SDC and LGD time to perfect the process.
All in, the current rumor does carry some weight in terms of meshing with expansion plans for SDC and LGD, and on a more general basis, Apple’s desire to continually improve their displays, but while this track toward an OLED iPad line is being developed, so is the work toward Mini-LEDs, which are based on LCD architecture. This gives Apple some leverage with OLED display producers as adapting mini-LEDs to notebook sized LCD panels is a relatively easy task that can be accomplished using existing technology. OLED producers must push hard to further develop OLED technology knowing they have competition from the ranks of LCD producers who are eager to keep their investment active and competitive against OLED and can do so with relatively little investment and new infrastructure. That said, as always, time lines are developed to be changed, so rumors need verification that is hard to come by when dealing with companies that are obsessive about project security, but at least the current Apple/iPad/OLED rumors have some basis on which to be made, albeit one that could change daily..
That said, Apple was a slow starter with OLED, adopting the technology in late 2017 with the iPhone X, while leaving the other iPhone models with LCD displays. In 2018 two iPhone models had OLED displays, and by last year all iPhones sported OLED displays, and while Apple sells lots of smartphones, they also have other products that could easily adopt OLED displays going forward (The Apple Watch also uses OLED). For much of this year rumors have been circulating that Apple will be offering its first iPad with an OLED display next year and would continue to spread the technology across the iPad line in 2023, likely to all but the iPad Mini, which is a smaller and lower priced offering.
Those rumors have surfaced again, with current expectations that Apple will offer a 10.86” iPad version next year with an OLED screen, albeit based on relatively mundane OLED technology. The OLED display is expected to be based on a rigid substrate (glass) but instead of being encapsulated with glass (typical for rigid OLED), it would use the same thin-film encapsulation used on most flexible OLED displays. The TFT structure is expected to be typical LTPS, the most common form of OLED backplane, with the displays being made exclusively for Apple by Samsung Display (pvt).
The reason this rumor is gaining strength comes from Samsung’s push to commercialize its IT OLED panel business, which has been exclusive to parent Samsung Electronics, and given Samsung’s goal of shipping 1m OLED notebook displays this year, we expect they have plans to increment that number again in 2022 and 2023. While we expect SDC is actively seeking a broad customer base, a deal with Apple for the iPad, even for one of four Apple iPad models, would go a long way toward both filling existing OLED capacity and justifying the expansion of same. Apple has financed such capacity expansions in the past, particularly for LG Display (LPL) and Japan Display (6740.JP), and while we expect Samsung is not in a position to need or accept financing for small panel OLED capacity, Apple would likely contract dedicated capacity, which they have done with SDC in the past, and such contracts, being as close to ‘take-or-pay’ as possible in the CE space, are a guarantee that SDC could maintain profitability for that new capacity, without significant market risk.
We note also that the surface area of a 10.86” iPad display (4:3 aspect ratio) would be equal to the surface area of four iPhone 12s (9:19.5 aspect ratio), and the relatively simplistic structure of the supposed OLED iPad would likely allow Samsung to maintain high yields and profitability, so there is some logic to the expectations. In 2023 however the rumor suggests that Apple will expand its iPad offerings to 11” and 12.9” (iPad Pro current sizes) offerings using flexible OLED and an LTPO backplane structure, which should be able to maintain profitable yields at that time, and in order to offset any criticism of the OLED iPads being less bright than their former LCD brethren, the OLED emitting structure itself is said to be a double RGB stack, a process that is being adopted by both SDC and LG Display for ‘certain’ customers.
Such a dual stack process can be used in near-eye displays that must be both high resolution and high brightness, but research has been focused on photolithography techniques for such a process that would require a significant process change and cost for high volume production. Both OLED producers have been working toward being able to run the substrate through the deposition process a 2nd time to create the double stack, without compromising the first layer rather than using a more complex approach, which is why that process is scheduled for 2023 rather than next year, giving SDC and LGD time to perfect the process.
All in, the current rumor does carry some weight in terms of meshing with expansion plans for SDC and LGD, and on a more general basis, Apple’s desire to continually improve their displays, but while this track toward an OLED iPad line is being developed, so is the work toward Mini-LEDs, which are based on LCD architecture. This gives Apple some leverage with OLED display producers as adapting mini-LEDs to notebook sized LCD panels is a relatively easy task that can be accomplished using existing technology. OLED producers must push hard to further develop OLED technology knowing they have competition from the ranks of LCD producers who are eager to keep their investment active and competitive against OLED and can do so with relatively little investment and new infrastructure. That said, as always, time lines are developed to be changed, so rumors need verification that is hard to come by when dealing with companies that are obsessive about project security, but at least the current Apple/iPad/OLED rumors have some basis on which to be made, albeit one that could change daily..
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