Apple (AAPL) is scheduled to have an ‘event’ in March.  Expectations for such events tends to overshoot, but thus far we have heard that Apple is expected to release any of the following, a new iPhone SE (3rd generation), an updated iPad Air (5th Generation), both of which should be 5G equipped, and at least one new iMac, which will be released around June.  Apple will update iOS and flavors for macOS (Monterey 12.3), Watch OS (8.5) and tvOS (15.4), including the Air Tag changes we noted on 2/11/2022, and some new HomePod code that is oriented toward smart speakers.  There have been rumors that Apple has completed another round of validation for its AR/VR headset, so there might be a hint or two about that device, although we don’t expect it this year and hints of a foldable device such as a foldable iPhone, again a 2023 or later product.
The iPhone SE, was an inexpensive and small version of an iPhone that was last released in April of 2020 that sold for $399.  The 2020 SE was based on the design of the iPhone 8, which was released in September 2017, so even the current version (2nd Gen.) is due for an upgrade.  The SE is a popular device and is among the 18 iPhones that encompass 99.5% of iPhone traffic across the internet, with the iPhone 7 (released 9/16/16) still generating the most traffic out of all iPhones currently available.  We believe the SE sold ~8.7m units in 2020 and likely less last year so a new version should stimulate sales and help Apple compete in the $300 - $500 low-end phone arena that is dominated by Chinese brands, particularly in India where the iPhone SE still sells but is looking a bit old in comparison to some of the more recent Chinese brand models from Xiaomi (1810.HK), One Plus (pvt), and Vivo (pvt).
While we are on the subject, Apple filed a patent application this week that takes the laptop to another level and could one day represent a version of what is now a laptop device.  In this potential application, the basis for the device is a keyboard, however inside the keyboard are a number of ‘compartments’ that contain everything from an I/O port (224) and components, a processor (236), memory (238), and a variety of other, smaller components that reside in additional cavities under the keyboard (234).  The unit is powered through the ‘all-in-one’ I/O port and can be connected to a display device through the same port, so by detaching the I/O connector one could take their entire computer from home to work just by taking the keyboard.
The idea is really taken from the relatively early days of personal computers, as the Commodore (defunct) 64 introduced in early 1982 and the Amiga (Commodore) 500, were both self-contained ‘keyboard computers’ that were mildly successful but were never able to compete against more powerful static business computers or the laptops that eventually replaced them.    Given that an iPhone 13 Pro is 4.78 cubic inches with much of that the display, fitting all the components needed for a relatively powerful computer inside a keyboard such as indicated below, seems a task that could easily be completed.  Of course, the ancillary monitor (home and work) would be hard-wired (or not) and power would have to be supplied in both use cases, but a single port would make that relatively simple and a wireless monitor would simplify that connection even further, so transporting the keyboard and a power adapter would be all that is needed to become fully portable.
Of course, this is just a patent and may never be developed into a product from Apple, but it does represent an alternative to ‘virtual’ keyboards on tablets or the need to carry a keyboard along with a tablet if you are used to a ‘physical’ device.  Pricing would have to be somewhere between a tablet and a laptop, probably in the $500 range, and of course the design would have to be a selling point, but anything that makes it easy for a hybrid worker to haul their computer from work to home and back could have merit as a product.

​Apple is a fan of LTPO (Low-temperature Poly-Oxide) backplane technology, a process that uses materials from both LTPS (Low-temperature poly-silicon), a common backplane technology, and LTPO.  By combining these materials and processes, panel producers can change the characteristics of OLED displays, allowing them to function at a 120Hz refresh rate.  With the screen be ‘repainted’ twice as often as usual, the chance that an image might blur as it moves across the screen is lessened, however at the same time the double refresh rate creates addition power consumption.  In order to compensate for this, LTPO can provide a lower overall power drain, and helps to keep the higher refresh rate displays from draining the battery.
That said, there are few panel producers who have the ability to produce displays with LTPO backplanes, and that limits those who wish to take advantage of 120Hz refresh rates to a small number of display producers, primarily Samsung Display (pvt), who is the leader in the space.  LG Display (LPL) also produces LTPO displays but in a more limited capacity, leaving Apple little choice but to use South Korean suppliers for its LTPO needs, with both the iPhone 13 Pro and the iPhone 13 Pro Max using the technology.  As we have noted previously, China’s BOE (200725.CH) has passed muster as a primary display producer for the iPhone, but is limited to producing LTPS displays (iPhone 13 currently) until it is able to get qualified for LTPO display production by Apple, which has yet to happen.
In the interim, China’s Visionox (002387.CH) has announced that they have launched China’s first LTPO OLED display and expects to see the display in new phones ‘soon’, putting them both in competition to garner attention from Apple and to compete with BOE, SDC, and LPL.  As BOE discovered, it can take quite a while to get through Apple’s intense qualification process, which not only considers the quality of the technology but also the ability to produce a stuffiest quantity for inclusion as a full supplier, and that means a yield that can be difficult to reach.  Visionox, while they will certainly push to develop customers on the Mainland, will have to begin the qualification process with Apple now that they have a commercial product, which can be both difficult and could require at least some capacity to be dedicated to such a project.  With that goal in mind we expect Visionox will make such an attempt although they have relatively small OLED production capacity (line in Hebei, Hefei & Kunshan) when compared to BOE and South Korean producers, so it could be some time before they would have the dedicated capacity needed to be a primary LTPO supplier to Apple.  As BOE faced a number of qualification disappointments that were regaled in the trade press, it might be best for Visionox to work with Chinese smartphone brands for a time rather than take the big step toward Apple.

​We all spend a considerable amount of time on mobile devices each day and that amount of time seems to increase every year.  According to data from data.ai, Brazilians spend the most time on mobile devices at 5.4 average hours/day in 2021, up from 5.2hours/day in 2020 and 4.1 in 2019, with Indonesia 2nd and the US 10th, while China is a surprising 17th on the list and while Russia saw a big y/y boost in 2020, those increases slowed in 2021.  Putting China back in perspective, despite a continuing crackdown on a wide variety of applications, China has been the country downloading the most apps by a wide margin, for a number of years and in 2021 downloaded almost 4x the number of apps as did the next in line, India, despite the fact that both have similar population.  However when it comes to spending in App stores, while China remains first, the US is second, spending ~$43b to China’s ~$56.8b and Japan’s ~$20.7b, with India being out of the top 10 spenders list.
Further, when looking at data for which application categories were the most popular over the period between 2018 and 2021, it comes as no surprise that social media & communication (messaging) remains the primary application for mobile users, but has seen it share decline from 48.0% in 1Q 2018 to 41.9% in 4Q 2021, while the photos & video category (TikTok – ByteDance (pvt)) has increased from 19.0% in 1Q 2018 to 24.8% in 4Q 2021., while entertainment (movies, etc.) has remained between 2.0% and 3.2%, while game time has decreased during the period from 9.0% to 8.1%, surprising considering how much publicity the gaming sector generates.  On an overall basis, the number of hours spent in all app categories has grown from 615.18b hours in 1Q 2018 to 982.73b hours in 4Q 2021, or 59.7%, so while the world might be spending a bit less time on social media and a bit more time watching Tik Tok, the number of hours we spend on mobile devices continues to increase

In response to Russia’s invasion of Ukraine and its recognition of two independent states that are part of the country, the US Bureau of Industry & Security has issued a number of sanctions under the Export Administration Regulations that have been primarily reserved for individuals, institutions, and companies that the US government sees asa threat to US security.  The new measures impose a Commerce Control List for Russia, adds two ‘direct product’ rules specific to Russian military end users, other than food and medicine, and Russian government and state-owned end-users.  Further the rules impose export and transfer rules on the ‘so-called’ Donetsk People’s Republic and Luhansk People’s Republic regions of Ukraine and Crimea.  As with other entities on the list, all transactions with list members requires a license that would be granted by the DOC.
While the full text has not been released, what we have seen so far are restrictions including items that while are not sensitive technology components, tools, or software, but can be used to produce them by Russian end-users, similar to those placed on Huawei (pvt).  There are over 45 specific Russian government entities that are being added to the list, primarily research institutions, aircraft manufacturers, and similar companies, while two companies are being added after attempting to acquire US origin items in support of ‘nuclear explosive activities’.  The list of ‘new entries’ is below:
Admiralty Shipyard JSC; · Aleksandrov Scientific Research Technological Institute NITI; · Argut OOO; · Communication Center of the Ministry of Defence; · Federal Research Center Boreskov Institute of Catalysis; · Federal State Budgetary Enterprise of the Administration of the President of Russia; · Federal State Budgetary Enterprise Special Flight Unit Rossiya of the Administration of the President of Russia; · Federal State Unitary Enterprise Dukhov Automatics Research Institute (VNIIA); · Foreign Intelligence Service (SVR); · Forensic Center of Nizhniy Novgorod Region Main Directorate of the Ministry of Interior Affairs; · *International Center for Quantum Optics and Quantum Technologies LLC; · Irkut Corporation; · Irkut Research and Production Corporation Public Joint Stock Company; Joint Stock Company Scientific Research Institute of Computing Machinery; · JSC Central Research Institute of Machine Building (JSC TsNIIMash); · JSC Kazan Helicopter Plant Repair Service; · JSC Rocket and Space Centre – Progress; · Kamensk-Uralsky Metallurgical Works J.S. Co.; · Kazan Helicopter Plant PJSC; Komsomolsk-na-Amur Aviation Production Organization (KNAAPO); · Ministry of Defense of the Russian Federation including the national armed services (army, navy, marine, air force, or coast guard), as well as the national guard and national police, government intelligence or reconnaissance organizations of the Russian Federation; · Moscow Institute of Physics and Technology; NPO High Precision Systems JSC; · NPO Splav JSC; · Oboronprom OJSC; · PJSC Beriev Aircraft Company; · PJSC Irkut Corporation; · PJSC Kazan Helicopters; · POLYUS Research Institute of M.F. Stelmakh Joint Stock Company; · Promtech-Dubna, JSC; · Public Joint Stock Company United Aircraft Corporation; · Radiotechnical and Information Systems (RTI) Concern; · Rapart Services LLC; Rosoboronexport OJSC (ROE); · Rostec (Russian Technologies State Corporation); · Rostekh – Azimuth; · Russian Aircraft Corporation MiG; · Russian Helicopters JSC; · *SP Kvant; · Sukhoi Aviation JSC; · Sukhoi Civil Aircraft; · Tactical Missiles Corporation JSC; · Tupolev JSC; · UEC-Saturn; · United Aircraft Corporation; United Engine Corporation; and · United Instrument Manufacturing Corporation 
​

February is an unusual month for the display panel business in that the Chinese New Year holiday disrupts panel production as workers travel home to visit family, however COVID-19 restrictions has lessened some of that travel given China’s strict local and provincial lockdowns on even the smallest outbreaks.  Typically (see Figure 7) January and February are the weakest for display shipments on a m/m basis, so we are careful not to ‘over-read’ pricing data this month, however we can give some perspective on how panel pricing stacked up against our expectations.
On a broad basis, TV panel pricing was better than expected, albeit still down 2.2% for the month.  While this is certainly a positive for those panel producers that have an orientation toward large panel production, and it sets the tone for more modest TV panel price declines or even an increase in March (typically the strongest m/m shipment month), we do not expect that it sets the tone for TV panel pricing for the entire year and would look to March TV panel pricing data to see if typical m/m seasonality holds true before estimating TV panel pricing for the year.  As an offset to the better than expected TV panel pricing was worse than expected IT panel pricing, and as we have stated a number of times previously, the industry has been moving production capacity from TV panel production to IT panel production for the last year as an offset to the rapid decline in TV panel pricing.  This creates additional industry sensitivity to IT panel price changes and as can be seen in Figure 6, the trend is down.
There is a bit of nuance toward TV panel pricing in February, with the smallest TV panel sizes (32”) seeing essentially flat pricing and large panel sizes (43” and above) seeing declines.  Figure 8 shows 32” panel; pricing since 2018, and while the recent price declines did not trace 32” panel pricing all the way back to the low set back in late 2019, it did retrace much of the 32” panel price increases seen in 2H ’20 and 1H ’21.  In the past 32” TV panels represented ‘small’ TVs and were considered commodity panels, manufactured by a large number of panel producers, however more recently some of those panels are being used for gaming monitors, which has given the size segment a bit more cache and will likely help to maintain a more stable price, but does not rule out further price reductions..
Figure 9 shows the same price data for 65” TV panels, which are more the mainstay of the TV set market.  Again much of the 2020 and 2021 panel price gains have been reversed, however the price curve has yet to bottom and is currently 9.3% above (based on March expectations) the chart period low, so we expect less aggressive declines but a near return to previous lows, as the competition among panel producers is most intense in the 55” and 65” TV panel categories.
All in, March should, if seasonality holds, be a better month for shipments, but will still see panel price declines, particularly in the IT segment (monitors, notebooks, tablets), which will affect sales performance.  That said, we expect panel producers to see volume increases high enough to offset panel price declines in March, which will help margins but do not expect that to be sustainable in April, particularly as the industry concentration toward IT products faces further panel price declines.  We note that on a long-term basis panel prices decline and while the COVID-19 pandemic has changed that over the last year or so, we expect the industry to return to that mode during 2022 as the pandemic is brought further under control.  While we still expect price cycles, as has been the case in the past, we expect the display industry, at least the LCD portion, to return to a more passive mode as long as we don’t see a major resurgence in the infection rate.

While Samsung (005930.KS) and Apple (AAPL) continue their tug-of-war for top billing in the global smartphone market, Samsung is still king in its home country of South Korea, with the Samsung Galaxy Z Flip 3, the Galaxy A32, and the Galaxy S21 5G holding spots 1, 3, and 4 in the top 5 most popular models in Korea in 4Q ’21 (Apple holds spot 2 and 5).  However each successive series of Samsung’s flagship phones, the Galaxy S, have not been selling as well as previous year’s models, and Samsung has been looking for a way to stem that decline.  At least based on pre-order rates, Samsung might have found the right configuration to build back its flagship customer base, at least in Korea, something Samsung wants to push out to its global customers.
Indications, again based on pre-order rates, are that the recently announced Galaxy S22 line is seeing over 1m pre-orders over the last 7 days, an average rate of 145,700 units/day (day 1 saw ~300k), better than the 127,200 units/day seen with the S21 last year.  A bit telling is that ~60% of the pre-orders were for the Galaxy S22 Ultra, the most expensive of the three S22 models and the only one that supports Samsung’s S-Pen, a feature that drove many Samsung users to the Galaxy Note series which Samsung has tacitly ended. With those Note users wishing to upgrade older models, the logical choice among the S series is the Ultra, which we believe accounts for what we believe s a higher than normal share for this model.
Further, the Galaxy Fold 3 and Galaxy Flip 3 (combined) saw close to 1m pre-orders in the pre-release stage last year, and while they did not hit the 1m mark, sold considerably better than previous models.  The Fold 3 also supports the S-Pen but does not have a storage slot as does the S22 Ultra, a feature also seen in the Note line.  It remains to be seen if the Galaxy S22 series does as well globally but smartphone brands take strong (pre-release) orders as a very positive sign no matter where they come from.  The phones are available for pre-order in the US with an expected delivery date of March 3, with Samsung offering further encouragement by giving ‘pre-orderers’ 4 free months of YouTube (GOOG) premium, 3 free months of Spotify (SPOT) Premium, 6 free months of Sirius XM (LMSXA) streaming, 6 free months of OneDrive (MSFT), and a $100 Google Play credit.  If you are really nice, they will come to your house and clean your garage (just kidding on that one but it’s worth a try).  Samsung also mentioned that the new Galaxy S8 tablet series pre-orders are running at 2x the pre-orders for the Galaxy S7 tablet.  All three Galaxy S8 tablets support the S-Pen.

​The layers of materials used in an OLED display are quite thin, with key layers as thin as 10nm, but when those materials are used in hundreds of millions of devices, those thin layers add up.  Suppliers of materials for OLED stacks are constantly vying for a place with key OLED display producers, Samsung Display (pvt) being the largest.  SDC changes it stack materials when it can see an appreciable change in stack performance, as such changes can spark considerable design and process changes and require requalification with customers, a time-consuming task that can have a number of iterations.  That said, a win can lead to considerable revenue and a (hopefully) long-term relationship with producers.
While there are a few stack materials where there is only one supplier, usually a material ‘helper’ that increases the effectiveness of a key stack material, a number of OLED materials see considerable competition, particularly those that are not in the emitting layer, as both red and green phosphorescent OLED emitters are licensed and produced only by Universal Display (OLED), while emitter ‘host’ material in which the emitter is ‘doped’ are produced by a number of suppliers.  As new stacks are developed by OLED producers material suppliers submit their latest materials for evaluation, with the intention of becoming or remaining a supplier of as many materials as possible in each new stack.
As we noted recently, Samsung Display will be updating its OLED stack later this year (M12) and there are already a few changes or additions to stack material suppliers.  While we cannot confirm all material suppliers yet, there are a few that we believe are confirmed, and a number that we believe will be confirmed eventually.  In the diagram below we show the typical OLED stack layers for Samsung’s most recent RGB OLED stacks (M10, M11) and M12 which will be adopted this year.  Those suppliers that we can confirm in M12 are in black.  Those that we believe will be chosen but have not confirmed are in red, and we note also that where multiple suppliers are listed, there is the possibility that a supplier for one SDC customer might be different from a supplier for another customer.  We thank UBI, The Elec, and a number of suppliers for their contributions to the graphic.

​Universal Display (OLED) is a unique company, having an unusual lock on IP associated with phosphorescent OLED materials and their use in light emitting devices.  They are the licensor and de facto supplier of such materials to every OLED display producer, and because of that IP have no direct commercial competition from other potential phosphorescent emitter suppliers.  There are alternative OLED emitter materials, such as TADFs (Thermally Activated Delayed Fluorescence) but few, if any, are in use by major OLED display producers, and there are certainly alternative display technologies that can rival OLED, but OLED technology has established itself as a viable alternative to LCD display technology for mobile displays, and as a high quality alternative to LCD in the TV display space and has a developing and expanding ecosystem and capacity base.
The company generates material sales from contracts with OLED suppliers and license/royalty fees based on its IP, either based on a yearly flat license fee (Samsung Display (pvt)) or a royalty based on device production value (LG Display  (LPL) & Others).   This puts UDC in a position to capture much of the growth in the OLED display business, and over the last few years has grown sales as the OLED display market has grown, although as a JIT supplier quarterly sales can be volatile as customer order patterns rarely correlate to short-term capacity expansion or industry unit volume growth.  OLED demand growth is based on three general product categories, mobile devices (smartphones/tablets/watches), IT products (laptops and monitors), and TVs.  OLED IT products are the newest and likely fastest growing category from a relatively small base, while OLED TVs are well-established although a small (~2%) share of the overall total TV market, and OLED displays are now the most popular display technology for smartphones.
OLED capacity growth comes from primarily from the expansion of OLED fabs, primarily Gen 6 (smartphones, tablets, laptops) and Gen 8 fabs (TVs), as demand grows, but basing material growth on industry capacity growth can be difficult as while there is considerable incremental OLED capacity growth both planned and underway, utilization and yield can be as important or more so than stated capacity growth.  From UDC’s perspective however, fab utilization is more important than yield, as an underutilized fab requires less OLED emitter material, while a fab with poor yields still requires OLED materials for all displays, even if they do not pass qualification. 
Material sales have represented between 53.6% and 59.9% of sales over the last three years, with our estimate for 2022 being 58.1% of total sales, with the balance primarily derived from license/royalty revenue, however in 2018 the adoption of ASC 606 revenue recognition rules changed the way UDC recognizes revenue.  Previous to that rule the company recognized license revenue from a major customer (Samsung Display) when it was paid, which was twice yearly, with license and royalty revenue from other customers recognized as received (albeit with a 1Q lag).  Under ASC 606, license and royalty revenue is recognized as a function of material sales, with the estimated value of the contract being trued-up each year.  So instead of large swings in license and royalty revenue, the mix ratio remains more rational between 1.4 (material to license/royalty) and 1.6.
There are also subtleties in the three OLED materials that UDC markets.  Red and green OLED emitters are used in all RGB (Red, green, blue) OLED devices, which would include all applications mentioned above except OLED TVs, while  OLED TVs use a yellow/green OLED emitter, although UDC does not break out yellow/green OLED material sales separately.  This leaves one missing color, blue, which is not currently available in phosphorescent emitters.  Almost all OLED material suppliers are researching the development of a blue Phosphorescent emitter material, particularly as UDC’s material IP would not cover such a material (although device IP would still be in effect), leaving open the ability to supply major OLED display producers, however UDC has a significant blue phosphorescent development team that has been working on the project for years.
The company made comments about its progress developing a blue phosphorescent emitter during its 4Q conference call that offset a bit of disappointment over the company’s 2022 guidance, which was a bit below consensus.  While the details about actual specifications for UDC’s most current blue OLED emitter were not given, the company did state that it expects to meet ‘preliminary goal specs’ by the end of this year and followed with the introduction of an all phosphorescent OLED stack (meaning red, green, and blue) in 2024.  This is the first time that the company has given a timeline for the introduction of a competitive blue OLED emitter and host, which seems to have ignited a fever for the shares today.  While we are certainly encouraged to hear that UDC continues to make progress toward the development of a blue phosphorescent emitter, we believe there are still many hurdles that have to be crossed before UDC can claim being the winner in the ‘blue’ race.
While UDC’s blue development project has certainly included conversations with major customers about the specifications they need for such a material, some of those specifications are moving targets, with a balance between three categories that would determine the usefulness of a blue phosphorescent emitter.  They are efficiency, or the ability of a material to convert electrical energy to light, the color point, or the actual ‘blue’ color itself, which is considered a ‘deep blue’ as opposed to a ‘light blue’, and the lifetime, the time it takes for the material to degrade to a specific point.  The difficulty is developing OLED materials comes from the balance between these three major factors, and while there have been advances made in each of the categories, it is the combination of all three that would make such a material commercially viable and as competition from other display technologies continues, those specifications also change
The inclusion of a blue phosphorescent emitter in an RGB OLED stack would also lead to design changes, such as the balance between the amount of each color needed and the sub-pixel arrangement, and the TFT backplane used to excite each sub-pixel.  While these are not insurmountable changes, they also go toward the production changes necessary to include an efficient blue phosphorescent emitter and weigh on how quickly OLED producers can make those changes when a blue phosphorescent material is introduced into a mass production environment.  We note also that the industry did not instantly adopt green phosphorescent emitter material even when it met industry specifications years ago, so we look toward the adoption of a blue phosphorescent emitter across the industry as a gradual one.
All of this said, we don’t want to suggest that UDC is not making significant progress toward the development of a phosphorescent blue emitter, quite the opposite, but we caution investors to focus on UDC’s ‘nearer’ term potential which could easily be overshadowed by chatter about the ‘blue wave’.  UDC’s guidance for 2022 ($625 - $650m) implies a single-point growth rate of 15.2%, which we believe is a relatively conservative view of the prospects for OLED materials this year, particularly in the face of silicon and component shortages that have limited display production over the last few months. Some of the factors that could help to lessen those shortages might also be reflected in reduced unit demand, and the fact that UDC has material price agreements with its customers that make it difficult to quickly adjust material prices to rising raw material costs, put us in agreement with a conservative approach to growth this year, at least at this point, but we expect there is considerable room for incremental growth as OLED displays move into the IT space and OLED TV production continues to expand.

​Two days ago WG Technology (603773.CH), aka Vogel Optoelectronics made the announcement that it would be forming a new company, Jiangxi Dehong Display Technology Company (pvt) for the purpose of building 60,000 meters of production space and 60,000 meters of warehouse space in which it will produce glass substrates for Mini-LED and Micro-LED displays.  The project, which is expected to take ~24 months to complete and will cost ~$261m US will be capable of producing ~437,000 m2/month or roughly 550,000 55” equivalent displays.  As we have previously noted, the increase in pixel density in Mini-LED and eventually Micro-LED displays causes a number of problems, including heat buildup and increased circuit resistance.  In order to combat these issues, backlight designers have begun using glass rather than PCBs and placing the circuitry using thin-film processes and direct LED connection, which would help to validate the project that WGT is building.
That said, the company, which has been around since 2009, seems to have had some missteps over the last few years and we wonder why (more, ‘how’) they are spending money to build this new glass capacity.  At the end of 2Q last year the company noted a 49.1% increase in sales but a 65.7% increase in receivables, which doesn’t include additional receivables of 13.45m yuan, which would put receivables almost at the 1H sales number.  Since the company was listed in 2018 sales have increased but net profits have declined, with the company’s explanation of ‘competition in  the display industry’ as the reason for the poor performance in 2018 and 2019, and the expansion of R&D and ‘other factors’ as the reason for the poor performance in 2020.  In the 2021 1H report they stopped giving a reason for the continuing decline in profits.
The company’s stated goal has been to purchase OLED display panels from local suppliers, create modules, and sell them to buyers outside of China, however it turns out that their largest customer, a Chinese lighting company, is over 80% of sales so the company, which still insists it’s a ‘sellers market’ (despite the poor profits), has been looking for new products.  Unfortunately during the ‘transformation period’ as the company calls the last few years, the CFO, the general manager, and the secretary of the board all resigned, after the company made three acquisitions with one still in litigation.  We are sure that the company will likely get a bit of help with this new financing, but we wonder from who, unless it’s the local government looking to create jobs and another few years before the company stops justifying losses.
 
 
 
 

​According to Korean trade press Sony (SNE) will be releasing the first commercial TV sets using Samsung Display’s (pvt) QD/OLED technology in June.  The Bravia A95K will come in 55” and 65” models and is expected to sell for $3,000 and $4,000 respectively.  This is a bit unusual in that SDC parent Samsung Electronics (005930.KS) would be thought to have 1st mover advantage with a new technology developed by its affiliate, but there has been considerable back-and-forth between the two over the technology, with Samsung Electronics allegedly delaying the initial release in May, but postponing that date over disagreements concerning panel price and panel allocation. 
The price of the two models, should these numbers prove true, would put the sets at the top of the premium OLED list, at least for 4K TV sets, as pricing for 2022 models from a number of brands have not yet been revealed.  As a new technology, or a new production process, one would expect a price considerably above existing premium TV sets, with both novelty and the high cost of production and low yields the general culprits, and by no means is this an inexpensive TV set.  However, while the process is different from producing WOLED and involves production steps that are new or less typical and therefore require more specialized equipment and more rigorous testing, the price is not unreasonable in our opinion.
While we cannot directly compare other display technologies to QD/OLED until production models are available and evaluated by display testing specialists such as Displaymate, or Rtings, we do note that the price of Samsung’s initial Mini-LED/QD 65” TV model released last May (65” 900A 4K) has declined 26.9% from its original price in less than a year.  Mini-LED/QD technology is considerably different than QD/OLED technology and is based on processes that are more mature, so we would look at such price reductions as a stretch for QD/OLED in its first year, especially as competition will be quite limited and the display single sourced, but a $4,000 starting point is certainly within the realm of retail customer budgets.