Ultra-large TVs are headline producers but not great sellers, but TV panel and set manufacturers continue to push display dimensions higher despite lackluster sales.  While most of these ultra-large sets are more a proof-of-capability, they are fodder for articles and advertisements extoling the expertise of panel and TV set manufacturing.  LG Electronics (066570.KS) promised to ship a 97” OLED TV this year and seems to be getting close to making that promise a reality as the set received certification from South Korea’s National Radio Research Agency, the organization that ensures devices that emit radio waves are compliant with regulations and safe for the public. In South Korea.  While there is no assurance that certification will lead to an imminent product release, it is among the last necessary steps before a product release.  LG would have OLED monitor and TV products ranging from 48” to 97” upon release.
Under the assumption that the 97” 4K OLED sets will be released in LG’s home country of South Korea first, the price of these sets, which are ~4’ x 7’ is expected to be between $23,300 and $25,500, which will likely keep them out of the hands of the average consumer, but they will show up at exhibitions, promotional tours, and major events, although the idea that they will be released in time for the FIFA World Cup in Qatar later this year, with elimination rounds already underway.  Samsung has a 98” QD/Mini-LED TV but it has been rumored to have sold only a few units at the bargain price of $15,000.

​LG Electronics (066570.KS) which withdrew from the smartphone business last year, has completed the sale of the business, after converting smartphone production lines in Brazil, India, and Vietnam to home appliance production, and selling the lines in China to affiliates of Inspur Group (600756.CH), a large server company based in Jinan, China, who was said to have ties to the People’s Liberation Army, which precludes US companies or investors from owning its shares.  We believe LG owns 30% of the JV that was set up to encompass the sale with Inspur having been responsible for the production of a portion of LG’s low-end smartphones in the past. 
The lines in other countries were originally to be sold however it was found that there were few buyers that had the need or financial capacity for the lines, while the Inspur sales was easily accomplished due to the existing relationship.  LG had contemplated selling the entire mobile division last year to a number of possible global scale buyers but decided to hold onto the IP, a portion of which is related to 5G, which the company says can be applied to a number of affiliated businesses outside of smartphones.  Since then there have been a number of IP sales made by LG, one being through affiliate LG Innotek (011070.KS) to Scramoge Technology (pvt), a non-practicing IP holding company in Ireland that is known for it’s lawsuits against major CE companies, and a number of licensing agreements with Chinese smartphone brands.

LG Electronics (066570.KS) has announced prices for its 2022 OLED TV line, or at least some of it.  What they have released is the pricing for the “C” series and the “G” series OLED TVs, which are the top two price tiers,  and the “B” series, which are mid-range models,  leaving the “A” series, which is the low-end of the OLED line undefined.  In the table below we compare current (2022) TV set initial prices with last year’s initial prices and where they are currently to give some idea as to how they might decline over the coming year.  We note that the "B" series was not expected to be released in the US last year but eventually made it way to the states as a special offer on the LG website only, which is why that data is omitted.
The “B” series 2022 pricing is 4.6% higher than the 2021 “B” series, while the “C” series is 5.1% lower and the “G” series is also 5.1% lower.  A smaller size (42”) was added to the “C” series this year as was a 97” model to the “G” series, although the 97” model has yet to be priced.  When comparing 2021 initial pricing against where the sets are selling today, the “B” series is down 32.6% from initial pricing, the “C” series is down 29.9% from initial pricing, and the “G” series is down 25.8% from initial pricing.  We note at the bottom of the table is the pricing for Samsung’s (033570.KS) QD/OLED TVs for comparison and are 9.1% (55”) and 16.7% (65”) more expensive than LG’s most expensive “G” series 2022 OLED TVs, less than we had anticipated given the relatively early stages of QD/OLED panel production.

​Display technology continues to improve, adding a diverse cadre of technology types and ever more sophisticated techniques for delivering the best possible image for the lowest price.  That said, there are certainly times when new technology does not always have a practical application, at least for consumers.  One such development is transparency, or the ability to create an image that does not block what is behind the screen it is displayed on.  There are certainly uses for such displays, particularly HUDs (Heads-Up-Displays), which are beginning to appear in automotive applications, in digital signage, where they are the most useful, providing images and information without blocking product or store real estate, and in AR (Augmented Reality), where images are superimposed on a transparent glass or plastic lens.  Some transparent-like systems are not truly transparent in that they project an image on a transparent optical member or in front of your eye using mirrors, but what we are speaking about here are transparent displays, ones that generate images using LCD or OLED technology but have a transparent rather than a solid (black) backplane.
The degree of transparency is a key factor in determining the effectiveness of such displays, with transparent LCD displays having considerably lower transparency than those using OLED technology.  As OLED is a self-emissive technology, it requires no backlight and can therefore contain less material that would block light passing through the display.  Transparency between 35% and 40% is not unusual for transparent OLED displays while transparent LCD displays, because of the backlight, have lower transparency metrics.  There are other important factors in evaluating transparent displays, such as the accuracy of color, viewing angle, and brightness, but these are common to almost any display, with transparency making some of them a bit more important.
Given that LG Display (LPL) is the sole producer of mass produced large panel OLED displays, the company has produced a number of transparent models that are used primarily in signage applications, however, the South Korean trade press is citing an alleged proposal LG Display has made to its parent LG Electronics (066570.KS) to launch a retail oriented transparent OLED TV.  The proposal is said to be based on a fixed 55” transparent OLED display to be released next year, with a few modifications to the ones used in commercial applications (Figure 2), such as a strengthened glass cover.  That said, we find it a bit difficult to pinpoint residential applications where constant transparency would be useful.  Perhaps in the kitchen while watching a recipe video and monitoring kids playing near-by, but its difficult for us to come up with applications on a residential level that would benefit from transparent TV technology.
Xiaomi (1810.HK) released a 55” transparent OLED TV in 2020, with the display produced by LG Display, which sold for $7,200 but while generating considerable excitement among electronics influencers, sold very few units and not surprisingly so.  We are not surprised that LG Display is pursuing such a device in order to further fill its large panel OLED fabs and justify the expense of past transparency R&D, but we would be surprised if LG Electronics would take on such a project as the end market would be rather small.  We are sure there are other residential applications that we have not thought of that LG marketing will tick off in their proposal, but as a mass market device, we would rather see the time spent on other developments.

​Once again speculation runs wild over the potential purchase of OLED panels by Samsung Electronics.  While the last batch of rumors said it was just a matter of the fine details before an agreement between Samsung Electronics and LG Display (LPL) was signed and roughly 2m panels began to be shipped to Samsung as part of its 2022 premium TV line.  Since Samsung has not mentioned an OLED product in blubs before CES, rumors are now moving away from the sale over a difference in negotiated pricing.  According to local Korean trade press, it seems the two companies have been a bit further apart than previously thought, with LGD offering panels to Samsung at ~$650, while Samsung is offering to buy at ~$550. 
Samsung would certainly be a large customer if such a deal would go through, but even with LGD’s offered price, which is ~10% below the price that LGD sells to its parent LG Electronics, Samsung is looking to undercut LGE’s OLED TV pricing by enough that pure OLED TVs will become an option in their TV line, rather than a competitor to its own QD/OLED, Mini-LED/QD, and Micro-LED TV lines, which all fall into the ‘premium’ category.  With two of those three premium lines already established, Samsung seems to want to use OLED to fill out its LCD/QD line, which is situated below the Mini-LED/QD line.
As LG Display is essentially the only volume producer of large panel OLED displays, the growth is OLED TV set shipments and the increasing number of brands that offer them falls directly to them, and Samsung would be taking a sizeable chunk of their production in 2022 (~20%), which could leave some brands unable to meet their own OLED TV goals.  The question then comes down to profitability for LGD and consequently LG Electronics, who would see less profit from the Samsung order than otherwise.  If LGD is confident that they can sell ~10m OLED TV panels in 2022 without Samsung, it would make sense to hardline the price.  If they lack that confidence and are willing to accept a lower margin, they make the deal. 

LG Display (LPL) has announced a new, brighter OLED display, called OLED-EX, which it expects to put into production at its plants in Paju, South Korea during the 2nd quarter of 2022.  The company is said to have been using the new material at its plant in Guangzhou, China as part of its OLED TV panel supply to parent LG Electronics (066570.KS) for its EVO OLED TV line. The changes to the new panel are said (by the company) to be two-fold, with the first part a change in material composition, and the second a change in the way the sub-pixels are used.  LGD did not give much information on either change but we derive at least somewhat of an idea about the possible change to LGD’s OLED material composition.
Organic compounds are based on carbon, where the carbon atom is bonded to a hydrogen or other atoms or radical structures.  The bonds between these two elements comes from the fact that carbon, which has 4 electrons in its outer shell can share those electrons with 4 hydrogen atoms that have 1 electron in their outer shell.  In OLED displays, the application of an electrical current pushes the electrons out of the shell and as they fall back they give off that extra energy as light, hence the name light-emitting diodes; essentially what goes in as electrical energy comes out as light.  Sounds simple but it’s not.  If the reaction happens too quickly some of the excitons (let’s say ‘excited electron’) ‘quench’ the reaction of other excitons, reducing the light generated, and too little ‘push’ from applied current produces no reaction, so the organic materials and the electrical charge have to be carefully balanced.
Over time the bonds that hold such organic materials deteriorate, with higher energy organic materials (blue) deteriorating more quickly than lower energy materials (red and green), creating both lifetime discrepancies and persistence problems, also known as burn-in.  Chemical engineers have found that by substituting an isotope of hydrogen called deuterium, which still has the same one electron to bond to carbon but is a bit heavier (aka ‘heavy hydrogen’), they can slow down the reaction and reduce the ‘quenching’, increasing the brightness of the material without the normal decrease in lifetime that comes with more typical methods of driving materials to higher brightness by increasing the current.  While deuterium occurs naturally in water, the ratio is one atom for every 6,420 ‘regular’ hydrogen atoms and the process to separate those atoms is energy intensive, so LGD is buying the blue material from supplier DuPont (DOW), rather than its usual supplier of fluorescent blue emitter material, idemitsu Koasan (5019.JP).
While we don’t know precisely what LG Display has done to its OLED materials, based on IP filings by Samsung Display (pvt), Universal Display (OLED), LG Chem (051910.KS), Rohm & Haas (DOW) and others[1], the idea of substituting heavy hydrogen for elemental hydrogen in OLED materials is one of interest to many of those developing such materials, especially blue emitters and hosts, so we speculate a bit on what LG Display has done on the material side to generate a new OLED brand name.  As to the results, which are said to boost brightness between 25% and 30%, we expect both the material change and a new AI pixel processor contribute to the increase.


[1] Jeong, Eunjae, et al. ORGANIC ELECTROLUMINESCENCE DEVICE AND AMINE COMPOUND FOR ORGANIC ELECTROLUMINESCENCE DEVICE.
Chen, Hsiao-Fan, and Jason Brooks. ORGANIC ELECTROLUMINESCENT MATERIALS AND DEVICES.
Kim, Chi-Sik, et al. ORGANIC ELECTROLUMINESCENT COMPOUND AND ORGANIC ELECTROLUMINESCENT DEVICE COMPRISING THE SAME.
Kim, Seong-So, et al. ORGANIC LIGHT EMITTING DEVICE.
DOH, Yoo-Jin, et al. ORGANIC ELECTROLUMINESCENT DEVICE.
 
 

​LG Electronics (066570.KS) is expected to introduce a 97” OLED TV at CES in January.  This will be LG’s largest OLED TV size, with the maximum currently an 88” 8K model (OLED88ZXPUA) priced at $30,000, although availability is quite limited and delivery times are between 6 and 8 weeks for most retailers.  Such large OLED TVs are not produced in large quantities, with less than 2% of LG Display’s (LPL) production being for such large panel sizes, however two 98” OLED TV panels can be cut from a Gen 8.5 substrate with substrate efficiency close to 100%, which makes them viable for OLED lines that are not producing MMG product that mixes both large and smaller OLED panels on the same substrate., a slower process.  The price for the 98” TV model remains unknown, but based on the price of smaller sets, it will likely be in the $35,000 to $45,000 range.
LG is not only competing with Samsung’s (005930.KS) Micro-LED TVs, as we noted yesterday, but also with its own micro-LED TV brand, so despite the high price, it is necessary for LG to offer such large size OLED models, which, while certainly expensive compared to smaller OLED TV models, are less expensive than the micro-LED offerings by both vendors.  While few consumers can afford the high price tag, such large OLED TVs can be used in commercial settings where the high contrast and color quality are essential to product presentation.  Save those pennies.

The big guessing game in the CE space is whether the break in TV panel prices will give TV brands the ability to offer substantial discounts during the holidays and stimulate TV set sales, which have been and are expected to be lackluster.  Component shortages, inventory prices, transportation bottlenecks, and TV panel prices all play into such calculations, and while each brand has their own issues, we took a look at the US CPI (un-seasonally adjusted TV index) and how that relates to actual aggregate TV panel prices to get some understanding of where we are in the cycle, and the possibility for a better than expected holiday season.
The simplest comparison was the CPI TV Index vs. the aggregated price of TV panels since January 2020, as shown in Fig. 1.  As can be seen, the TV CPI index lags the index by about a month, with TV panel prices peaking in July and the TV CPI peaking in August, however the TV CPI did not follow the rising TV panel prices seen in the latter half of 2020.  It was not until the beginning of 2021 that the TV CPI began to track TV panel price increases and while the more recent TV CPI data better reflects the change in TV panel prices that began in September, we expect the TV CPI will take longer to readjust to lower panel prices.   TV panel prices have declined 35.3% from their peak while the TV CPI has declined less than a percent, and while this is not a real comparison as the bases are so far apart, at least from a visual point of view, they seem to be tracking more closely over the last three months than in the last 18 months.
But when it comes to consumers, TV panel prices and the TV CPI are far less relevant than what they see when walking into Best Buy (BBY) or are checking TV prices on Amazon (AMZN).  While underneath the loose budgets that consumers will try to hold to when viewing possible TV or other CE choices lies wage inflation/deflation, a smattering of knowledge, much brand hype, and a desire not to buy something that is overpriced, if something looks like a good bargain, it attracts attention.  In order to see whether TV panel price reductions and TV CPI decreases have made an impact on ‘real’ TV prices, we took a simple survey.  We traced the pricing for the 10 top selling TVs at Best Buy to measure where they currently stand relative to their high and low points.  Since Best Buy does not provide historic data, we used pricing on Amazon to trace pricing, and while this was more often 3rd party pricing, rather than Amazon’s, it does give a reasonable representation of the pricing cycles of these TVs.
Just to clarify the data set, the top ten ‘Best Sellers’ at Best Buy consisted of five Samsung (005930.KS) TVs, two LG (066570.KS) TVs, and three Insignia TVs, which are Best Buy’s house brand.  Of the 10, three were 2021 models, five were 2020 models, and two were 2018 (!) models, with one of the LG models being an OLED TV.  In terms of TV size, there were two 75” and two 65” TVs, with the rest with one each (75”, 58”, 55”, 40”, 32”, 24”), with only two being 4K TVs, five being UHD resolution, and the remaining ones HD.  The average price for the ten models was $585 on Best Buy, although leaving out the OLED TV brings that average down to $450.   Prices on Amazon were typically equal to or higher relative to Best Buy, with the average on Amazon 8.9% above Best Buy, but much of the differences came from the two 70” models, which were 29.2% and 66.3% higher on Amazon, likely because they are in relatively short supply.  
What was most interesting was that while the Amazon prices were down 22.5% from their high points on average and up 17.8% on average from their low points, the current prices of the ten sets on Amazon were 8.9% higher than the current Best Buy prices and the current Best Buy prices were only 0.2% higher than the average lowest price point (historically) on Amazon.  If nothing else, it points to the fact that the ‘best sellers’ at Best Buy are better deals than even the lowest historic prices on Amazon.  While the data proves the point that it is certainly better to shop for bargains on-line, particularly among Best Buy’s ‘top sellers’, than to walk into a store and wander through aisles of TVs with a salesman, it does not give any indication as to how much discounting is being done across the broad spectrum of TV sets sold in the US, despite the ‘previous price’ listed for each set at Best Buy.  We believe those ‘previous prices’ should be ignored, considering some of those sets were over two years old and have seen many short pricing peaks and valleys that had little to do with actual consumer prices. 
We also looked at the 10 most and least expensive models offered at Best Buy, however, most were not available on Amazon and price tracking data was therefore not available but just in passing, the average price of the 10 most expensive TVs at Best Buy was $17,155, with the top of the range set by a Samsung 98” 8K set at $60,000 and the least expensive a Samsung 85” 4K TV at $5,500.  At the other end of the spectrum the 10 lowest priced TV sets at Best Buy averaged $121.30, with the most expensive being a $160 Toshiba 32” TV and the least expensive being an Insignia 19” TV at $80.
All in, it will take a much wider sample to see whether the impact of TV panel price decreases will be able to work their way to consumers by the end of the year.  As set producers built inventory against a fear of continuing component shortages, they built in months of higher cost inventory that still has to be worked through or written off at the end of the year.  With three months of lower cost TV panel inventory, the cost average will come down, but given the multitude of other factors, particularly raw materials, semiconductors, and logistics, we expect much of the effects of TV panel price reductions will be seen in 1Q, making the post-holiday period a more likely place to be looking for real TV bargains.  TV panel producers are already seeing the effects of the price declines and have begun to lower utilization rates, which will continue to pressure y/y comparisons, but the bigger question is whether TV set brands will keep any margin they gain, or pass it on to consumers to move units.  Given the margin issues that have faced TV set brands for much of this year, we expect the former but hope for the latter.

Each year the lead-in to Black Friday gets extended, with deal ads starting in October and the actual Black Friday (11/26) day itself starting for many retailers on Wednesday, November 25.  Last year many brick & mortar retailers gave workers Black Friday off and closed stores to avoid crowds during the height of the COVID-19 pandemic and relied on increased on-line sales to make up the in-store selling day loss.  While we expect there might still be some store closings, on-line shopping has already become so ingrained in our culture, especially in the 25 – 34 year old bracket, that missing the overnight camp-outs in front of Wal-Mart (WMT) will likely not be missed by many.  In fact, a recent survey of 1,000 consumers who plan to shop between September and Cyber-Monday indicated that only 30% of respondents thought that stores should still remain open and have door buster sales, with 39% preferred the stores to stay open but have no door buster sales, while 31% stated that they would prefer the stores to remain closed on Black Friday. 
On a more general basis, an Offers.com (ZD) survey indicated that 20% of shoppers expected to increase spending during the holidays this year while 21% expected to reduce spending, so the overall consumer spending pattern will likely remain on track with recent years.  That said, now that the press has taken up the story on supply chain issues that might affect holiday deliveries, Black Friday early discounting serves the purpose of lengthening the time when orders might be placed, which gives retailers more wiggle room on delivery schedules, so said supply chain issues do lend some legitimacy to an extended holiday season, but at the same time consumers have also become used to those last minute ‘Super Savings Discounts’ that pop-up on peak buying days, which might not look as attractive if discounting has been in place for over a month.  That, coupled with consumer electronics’ inflationary characteristics this year could make it a bit more difficult for consumers to find the bargains they have become used to, especially if there are delays in delivery times.

While it is impossible to get an accurate picture of holiday CE deals across a large swath of products, we look back at one area where we have hard data, Samsung’s (005930.KS) Mini-LED/QD TV line, which we have been tracking since the products were announced in May.  As a reminder, this was the first year Samsung has offered a TV line that was based on Mini-LEDs, which gives us the opportunity to see how effectively Samsung priced the models at the onset, and how those prices have been trending to date, especially as we head into the holiday season.  We check Samsung’s Mini-LED/QD TV prices roughly every two weeks, although when we are contacted by Samsung as to ‘price drops on products you have viewed’, we check to see if there are any unusual pricing movements.
Based on our data, it seems that Samsung has already begun its holiday discounting program, at least for its Mini-LED/QD TV line, as the most recent tally has indicated that prices for much of the line have again reached their lowest point since release in late May.  In fact of the 33 models we track, 29 are at their lowest point since release, while 2 are at their highest (actually unchanged from the initial price) and the top of the Mini-LED/QD line (8K) is now 36.7% below the initial price, dropping over 10% over the last week, while the 4K Mini-LED/QD are down less, but also saw price drops between 2.8% and 8.2%.  Samsung’s quantum dot only sets fared a bit better, down between 0.0% (low-end QD only line) and 4.4% (hi-end QD only). 
While these prices, especially at the high-end of the line are significantly discounted from initial list price, they are also competing with Mini-LED TV price leader TCL (000100.CH), who is on their 3rd Mini-LED/QD iteration, and LG Electronics (066570.KS), who has pricing more comparable to Samsung.  TCL has far less name recognition in the US than either Samsung or LG, but has gained much recognition as a low-cost alternative to premium sets from other major TV brands at retailer Best Buy (BBY).  While feature-to-feature comparisons are difficult, TCL’s Series 6 Mini-LED/QD line directly competes with Samsung’s 4K Mini-LED/QD line and while TCL offers a limited number of comparative models, they are priced far below even Samsung’s lowest tier Mini-LED/QD sets.  TCL has already discounted their Mini-LED TV sets from list, so we would expect less discounting going forward, but with models between 46.2% and 51.9% below Samsung’s comparative pricing, the difference to consumers is obvious and continues to keep Samsung Mini-LED/QD prices under pressure.

We have seen estimates for OLED TV shipments increase this year, increasing from just under 6m units (est. in 2020) to over 6.1m and more recently to 6.5m units, with shipments in 1H more than double last year’s 1H.  There are two reasons for the increase in OLED TV sales this year, the first being LG Display’s (LPL) increased capacity, along with the increased availability of smaller sized (48”) models, which carry a lower price and therefore can increase the overall unit volume.  The second, and most important is the price of OLED TVs, which both in absolute terms and against rival LCD TVs have worked toward increasing overall unit volume.
LG Display continues to increase its OLED TV production efficiency using MMG (Multi-mode glass), a process that allows for the production of multiple size panels on a single sheet of substrate, which can improve substrate usage efficiency by very substantial amounts (see table below). This allows LG Display to reduce OLED panel prices while maintaining margins and allows OLED TV set brands to lower OLED set prices during a period when LCD TV set prices have been rising.  In order to quantify just how much OLED TV prices have moved this year, we looked at all 12 OLED TV models released by LG Electronics (066570.KS) this year and tracked pricing from its initial price through current selling price.  We note that all prices shown are from Amazon (AMZN) and not 3rd party sellers, and excludes a number of LG’s more esoteric OLED products such as its rollable TV.
Of the 12 OLED models, all were at their lowest price points for the year and only one model saw a peak higher than its initial price.  The entire line has seen an average price drop of 27.1% from initial pricing, and a 28.5% from peak pricing.  48” sets saw the biggest decrease, averaging 36.3% from peak, while 83” saw the least, dropping an average of 22.3% from peak, while 55”, 65”, and 77” saw price drops of 26.9%, 30.0%, and 25.7% respectively.  While OLED TVs are still generally more expensive than LCD or quantum dot enhanced LCD TVs, and still fall into the ‘premium TV’ category, they have become far more affordable this year than in the past, especially relative to their biggest competitor, LCD TVs.  We do note that as LCD TV panel prices decline, as they have been doing for the last two months, some of the relative price difference will be eaten away, but given that a considerable amount of high-priced TV panel inventory still exists in production or transport, we expect lower TV prices will take some time to appear in full stead.  In the interim OLED TV will have a good year.