​In July we noted that Samsung Display had been having difficulty with it’s ink-jet printing tools on its QD/OLED line and had reconsidered replacing those tools, which had been supplied by Samsung Electronics (005930.KS) affiliate, SEMES (pvt), after a bake-off with US based IJP supplier Kateeva (pvt), despite the better results from the Kateeva tools, which SDC already uses to encapsulate OLED displays.  We were surprised when the SEMES decision was made, as Kateeva had considerable experience with SDC and was the performance leader, but we expect there were other criteria, likely price, that could have influenced the decision at that time.
Since then it has become known that SDC is either replacing or adding IJP capacity to its QD/OLD line using Kateeva IJP to deposit quantum dot materials, with South Korea’s HB Solutions (297890.KS) as the provider of software that sits on the Kateeva tool, and delivery of the combined tool set is expected this month under a $10.2m contract with HBS.  SDC was said to have already purchased the Kateeva tool late last year and provided it to HBS for the software modification.  As HB Solutions made a $13.5m investment in Kateeva earlier this year and also purchased rights to additional Kateeva patents in the US, there was a point at which, if the deal between Kateeva and SDC did not go through, HB Solutions would become the owner of some of Kateeva’s collateralized patents, but it seems that any recent delays had little to do with Kateeva.
While it will take some time to bring the Kateeva tool into full production, we expect that the addition of this new IJP tool is part of the increased capacity SDC has been touting in relation to its QD/OLED fab.  Earlier yield issues are now assumed to be at least in part, related to the SEMES IJP tools, and the use of the Kateeva/HBS tool should allow SDC to bring QD/OLED yields even higher than the recent 85% rate that has been estimated.  The battle over who should supply IJP to the QD/OLED project has been going on since early 2020 (likely even before that date), and now seems finally resolved with Kateeva the winner after Kateeva had spent considerable capital developing the tool for SDC.  While SDC’’s original choice of the SEMES IJP tool almost cost Kateeva its existence, it seems SDC has had enough sense to admit they were wrong and make the change, something a bit less common than one might think in the display space.  All in, it is a positive for HBS and Kateeva, but more so for SDC, who needs to expand QD/OLED capacity with as little capital as possible. 

​Equipment bake-offs are a dangerous business, as the cost of developing and producing demos and then a working model of large display production equipment can be quite expensive, especially when it comes to a demanding customer such as Samsung Electronics.  Way back in July of 2020 we noted that Samsung (005930.KS) had been evaluating the ink-jet printing tools developed by Kateeva (pvt) and SEMES (009150.KS), a Samsung owned company that had been a supplier of display equipment to its parent, and had chosen SEMES as the provider of the IJP tools that it would be using to print quantum dot material under its new QD/OLED process.  This was a disruptive choice for Kateeva, pushing the company to fall back on its IJP encapsulation product development and focusing on Chinese panel producers who were expanding their OLED panel production.
Little was said concerning why Samsung made the choice, especially given that our information suggested that Kateeva’s tool had produced better results, but other factors prevailed, and while much of SEMES’s traditional display business was for sale, the IJP portion seemed to be headed for Samsung’s new QD/OLED fab, even as Kateeva’s price offer was said to be lower than SEMES’s.   As the QD/OLED fab has been sampling product for a few months, the SEMES tools continue to operate however problems seem to have occurred and there have been suggestions that SEMES is blaming the Samsung Advanced Institute of Technology, the company’s R&D development organization that was said to have been part of the software development process for the equipment’s poor performance.
It seems that Samsung is now going to use Kateeva’s IJP tools for the QD deposition process, placing an order with HB Solutions (297890.KS), who will provide additional software to the Kateeva product and will service the tools.  HB Solutions is said to be developing its own IJP tools but at least for now will be the provider of the order for Kateeva.  No indication was given as to whether the SEMES tools will remain or be fully replaced by the Kateeva IJP tools, which are typically used for OLED encapsulation and Samsung is considering expanding QD/OLED production if the acceptance of the new technology is strong enough.  Should Samsung Display decide to expand production of the QD/OLED process, the question would then be whether they would go with Kateeva tools for the new lines or begin another bakeoff.  If the current scenario proves correct, we would expect Kateeva would have a strong shot as a primary IJP supplier.