As we noted in yesterday’s graphic, Samsung Electronics (005930.KS) is the leader in the foldable smartphone market, and that leadership continues into the foldable laptop/notebook market, an even newer subset of the overall mobile CE market.  Along with these actual foldable products, Samsung and its display affiliate Samsung Display (pvt), have filed many patent applications for a slew of potential products that will continue to broaden the scope of foldables over the next few years, some of which we have taken a look at in our notes.  That said, filing a patent application has little bearing on whether the device(s) shown in the IP will become actual products, as much IP is used to keep others from heading down a similar development path, but, some do get translated into viable products, so we try to keep an open mind and look at the ones that seem ultimately practical or, at the least, unusual.
On 02/07/2021 Samsung Electronics filed a patent application for a “Multi-Folding Electronic Device” with WIPO (World Intellectual Property Organization), a United Nations agency that includes members from 93 countries (including the US and China) and has been administering international IP since 1967 and helps to connect IP systems from member countries to a global system (patentscope).
The patent shows a number of ‘embodiments’ or potential physical set-ups that look like a typical laptop in they have a screen and a keyboard, but then allows both the screen and the keyboard to be folded on hinges reducing the size of the device to 25% when closed.  Extrapolating on such a device would allow for a typical 15.6” (diagonal) folded laptop to have a screen (unfolded) that is 7.65” tall and 27.2” wide, along with a similar size keyboard, which could then be folded into a 7.65” x 13.6” form, the same as a typical laptop, or, if you wanted to go in the other direction, a typical 15.6” laptop could be folded into a 7.65” x 6.8” rectangle, ¼ of the size when fully open, making it much easier to carry.
Most foldable laptops that exist currently either have a virtual keyboard that takes up the bottom of the screen when unfolded, reducing viewing real estate, or uses an attached keyboard that is separate from the device.  Samsung’s patent allows for a real keyboard, something quite desirable for those who write rather than play games, and a large screen that could act as a virtual desktop.  Of course, such a device would not be cheap, if it appeared at all, but would be quite practical in either configuration, which makes it notable in our view.

While the lack of Samsung Electronics’ (005930.KS) promotion of it’s affiliate Samsung Display’s (pvt) QD/OLED was a story that made tech press headlines,  SDC’s QD/OLED displays did get recognition from Sony (SNE), who will likely be the first to adopt the new technology in a retail oriented TV.  But more of a specialty item was the announcement from Alienware (DELL), the high-end monitor and laptop line from Dell, that they also have adopted the QD/OLED panels from SDC for what would be the first QD/OLED gaming monitor (Model AW3423DW).  While the price has not been established (most speculation is ‘expensive’ to ‘quite expensive’) Alienware did give an actual release date of March 29 for North America and April 5 for UK and Europe, which gives some indication as to where Samsung Display might be in the production ramp timeline.
The panel for this laptop is 34”, one of three sizes (55” & 65”) being produced by SDC, generating a 3440 x 1440 resolution (known as Ultra-Wide QHD), with an aspect ratio of 9:21 and a moderate curve.  The refresh rate is 175Hz, the static contrast ratio is 1,000,000:1 (essentially infinite), and 10 bit color is supported, which means the display can image up to 1.07b colors, not something you would need if you were just posting Facebook (FB) videos, but something video editors or high quality content creators would need to make sure color transitions are smooth.  Luminence is 250 cd/m2, which is typical for monitors, with a peak brightness of 1,000 cd/m2 with 99.3% of the DCI-P3 color space covered.
All in, at least from the specifications, the AW3423DW is a high quality monitor, but the real differentiator here will be how ‘pure’ the colors look to those sitting in front of the monitor.  The use of quantum dots to shift blue or green OLED light to very narrow RED and Green wavelengths should give this monitor very precise color representation, making it ideal for those in the cinema editing business or video production.  The relatively high cost (we assume) will likely limit more typical gamers, but we expect SDC will be working toward bringing the cost down to a point comparable with other high-end monitors as quickly as possible.  High-end gaming monitors can run from ~$500 to over $2,000 and video reference monitor between $2,000 and ~$10,000.

Earlier this month Chinese smartphone brand Oppo (pvt) teased with a few words introducing Oppo’s first flagship foldable smartphone, the Find N, which was in development for 4 years and has morphed through 6 generations.  The phone is expected to be released tonight (Wednesday) in China as part of Oppo’s annual Inno Day.  While the picture (Fig 4) shows little, much of the speculation is that the new foldable will look similar to the Samsung (005930.KS) Z Fold, with Korean media indicating that Samsung Display (pvt) is the producer of the 7.1” folding display, while BOE (200725.CH) is the producer of the 5.45” external display. 
As SDC uses UTG (Ultra-thin glass) rather than polyimide films as a cover for the foldable display, the Find N is the first Chinese foldable to employ UTG, with previous foldables from Huawei (pvt) and Xiaomi (1810.HK) using polyimide.  The Oppo foldable is also the first Chinese company to use an LTPO (Low-temperature poly-silicon) backplane, again a characteristic of SDC’s most recent foldables.  While Chinese panel producers have supplied folding displays to Xiaomi for its previous foldable, it is expected that the upcoming Xiaomi Mi Mix Fold 2 will use an 8” SDC folding display (with UTG) and a Chinastar (pvt) 6.5” external display , while both foldable and external displays were supplied by Chinastar on the previous model.  Vivo (pvt), sister company to Oppo, is also expected to use the SDC foldable and a BOE external display for its foldable in 2022. 
Huawei was thought to also have been considering using SDC’s foldables for its upcoming upgrade to its Mate X2 foldable but seems to have decided to remain with foldable supplier BOE, along with Honor (pvt), a former Huawei brand, who is also expected to use BOE for its foldable next year.  Samsung Display is the share leader (3Q) in the flexible OLED market, with a 62.2% share by our calculations, but does face competition from BOE and LG Display (LPL), although combined they still have only a 28.9% share, but when it comes to foldables, SDC is definitely the leader with a share over 90% this year. 
Samsung’s push to spread foldables into the laptop segment has given them a new market, also one that they dominate, and while the unit volumes for foldable notebooks are still relatively small, the surface area is considerable large than for smartphones..  With parent Samsung Electronics’ foldable volume expected to double in 2022 from 7m to 14m units, and the overall market for foldable expected to double from 9m to between 18m and 19.5m units, we expect SDC to maintain a substantial lead over competitors in the foldable space despite the competition from BOE.  It might be a bit more difficult to maintain such a high share in 2023, as Chinese foldable producers sharpen their production skills, but SDC has been one step ahead since day one and will likely remain so in 2023 and beyond.
 

Estimates for OLED notebook production this year are for between 5.3m and 5.6m units, up from less than 1m last year, growing to ~7.5m in 2022 and 15m in 2023, representing not only explosive unit volume growth but significant demand growth on an m2 basis, one of the reasons behind OLED capacity expansion projects in China.  SDC will likely see it overall share of the flexible OLED market decline on a unit basis, but will likely see its actual share of OLED panels for notebooks on an m2 basis increase in 2022, as it has established relationships with almost all of the notebook brands that offer OLED displays, especially its parent, who is expected to have a 20% share of the OLED notebook market itself this year, second only to Asus (2357.TT).
​

We have mentioned a slowdown in the Chromebook market a number of times, with the earliest indication being in our 8/16/21 note and again on 9/27/21 and 10/25/21, but our expectations for the decline in Chromebook demand now seems conservative as we aggregate data from a number of sources.  We had expected a decline of ~17.5% q/q, which would still have implied a 3Q y/y gain of 5.2%.  With a number of sources in thus far, it looks like the aggregate q/q decline is down~49.0%, putting 3Q y/y down 34.8%, far worse than our estimate and the first negative y/y growth quarter for Chromebooks.  Some of the decline might be attributable to component shortages, but more likely the more extreme decline is due to delays or ending of new fiscal year budgets for student laptop/Chromebook programs, a number of which are ending are facing scrutiny as students in many countries are returning to class this fall.
Notebooks overall, of which Chromebooks comprises a share of 7.7% in 3Q (peaked out in 1Q of this year at 20.1%), have fared better, up 9.2% q/q and up 10.7% y/y , although it is the slowest notebook y/y growth since the pandemic began in 2020.  The growth in notebook shipments came from some orders that had not been filled in 2Q due to component shortages and stronger corporate growth coming from those employees that have returned to a full office daily routine.  As we have previously noted, retail notebook sales, the driver in past quarters, have slowed as student laptop programs become less necessary, so the question to be answered over the next two quarters will be “Will the corporate notebook expansion be able to offset slower retail notebook growth?”.
We expect notebook panel shipments to decline between 1% and 1.5%, as we noted in our 11/04/21 note, but worry that while anticipation of Chinese New Year (Feb. 1) and new notebook announcements at CES (Jan. 5) might keep notebook brand target expectations high into 1Q ’22, we are less sanguine about the overall notebook picture in 2022 as COVID-19 sequesterization (?) wanes.  While we don’t expect a major drop in notebook shipments in 1H ’22, it will certainly become harder to see y/y growth against 2021’s strong COVID-19 related demand.  While Chromebooks were the device of choice for on-line student programs, we expect they will fall back into a more normalized volume, showing lower unit volumes and very tough y/y comparisons.  That said, we expect over the long-term, Chromebooks do represent a valid concept that is ideal for situations where most of the use is based on on-line applications and storage, especially if Chrome based applications that allow for data exchange between Microsoft (MSFT) applications continue to grow. 

​As we have noted in a number of recent notes the display industry, particularly the LCD segment, has been leveraging itself toward the production of IT products (notebooks, monitors, and tablets) and away from LCD TV panel production.  Samsung Display (pvt) has sold or shuttered much of its TV panel business, keeping its only large panel production lines open at the request of parent Samsung Electronics (005930.KS), a much more long-term decision made back in 2019, while Chinese brands continue to build out large panel capacity, with a near-term push toward using that and existing capacity to produce more IT panels.  On a m2 basis, smaller panels get a higher ASP so some of the decision to allocate production resources comes from such motivation, but more from relatively mundane global TV demand growth, especially as compared to the increased demand for IT products stimulated by COVID-19.
The recent price decreases seen for TV panels has begun to justify Samsung Display’s original large panel capacity reduction thesis and also helps to justify other panel producers’ decisions to increase capacity exposure to IT products, but along with that decision comes the higher risk toward IT panel pricing.  Until recently that has not been an issue as IT panel prices continued to rise as TV panel prices declined, with continuing demand from brans, but two factors seem to be changing, both of which increase that risk further.  Display driver shortages have been pushing brands to build IT panel inventory.  Fear of a lack of product during the holiday season put brands in the position of paying up to get display module units, with targets based on the strong demand seen over the last year, but over the last two months demand seems to have weakened, first showing up as a slowdown in Chromebook shipments, and then as a broader slowdown in notebook demand. 
There are some technical reasons for this slowdown as students begin to return to classrooms and remote schooling programs wind down, and display drivers have become more available, yet notebook panel shipments have continued to be strong, at least through 3Q.  We expect that some of that 3Q IT order strength came from panel producers filling customer orders that had been delayed due to component shortages or had been under allocation, but hints from panel producers on 3Q calls that indicated a shift toward customers that supply IT products to corporate customers and away from those supplying retail, lead us to see a bit more concern about IT order patterns and there sustainability.
Typically (5 year average) the 4th quarter sees notebook panel shipments decline ~0.3% q/q but we have seen expectations for 4Q notebook panel shipments as low as -1.5%, and while we expect that might represent the extreme, anything significantly above the average would be troubling and would indicate potential notebook panel price weakness.  At just under 34% of large panel quarterly unit volume, weaker notebook panel prices could jeopardize 4Q panel producer sales, especially if TV panel prices continue to decline.  Notebook panel production plans are expected to be up between 15% and 19% in 2022, while recent expectations for notebook demand next year is for less than 1% unit volume growth.  Panel producers always have the option of shifting production to monitors or back to TV panels if prices dictate, but it is beginning to look like a game of musical chairs.

Back in August we noted that Quanta Computer (2382.TT), the largest notebook OEM, indicated that it expected to ship less notebooks in 3Q than in 2Q, a result of waning Chromebook shipments, which represented ~17.2% of total notebook shipments in 2Q, up from 12.1% in 2Q 2020.  While there has been a push in the US to get kids back into physical school, which has lightened demand for notebooks/Chromebooks in the education market, demand from the corporate market has kept notebook demand strong, but Chromebooks are less apt to be purchased for corporate use.  Early projections for global Chromebook shipments are for a q/q decline of between 15% and 20%, and while we believe the push toward in-person education in the US has reduced demand to a degree, we believe there is another factor that has also contributed to the reduction in Chromebook demand.
Japan had instituted  a program in 2018 (pre-COVID-19) called GIGA (Global & Innovation Gateway for All) that funded the purchase of laptops, Chromebooks and tablets for the education market, with 2/3rds of the $2.2b US in funding going toward hardware.  The Japanese education system at that point had been operating under the “If its’s not broken, don’t fix it” theory, as ‘chalkboard’ test results continued to be strong, but COVID-19 changed all that when it was found that far fewer students were equipped to learn remotely than previously thought and tight educational budgets had done little to alleviate that problem before the pandemic.  The original program was to continue through 2024 but with the appearance of COVID-19 much of the spending was pulled forward.
The GIGA program allocated ~$450 for each student with the objective of “One device for one student” and incentivized schools to make those purchases in 2020 or lose 10% of the allocation, so much of the program spending was allocated last year and early this year, however thus far the program renewal, which was to come in 4Q, has yet to be approved, possibly a result of the country’s governmental reshuffling and there seems to be similar delays in approvals for other APAC countries for similar programs leading to what looks to be the first quarter where Chromebook shipments have declined since 4Q ‘19.
While Chromebook brands are mixed about the prospects for the segment going forward, in the US the FCC has tapped into its “Emergency Connectivity Fund”, a $7.17b program that Congress approved as part of the American Rescue Plan of 2021, that will allocate funds for schools and libraries provide tools and services that are needed for remote learning.  While the program will cover “reasonable costs of laptop and tablet computers; Wi-Fi hotspots; modems; routers; and broadband connectivity purchases for off-campus use by students, school staff, and library patrons”, there was a limited window for applications, approximately six weeks between June 29 and August 13 and a 2nd ending October 13.  The FCC will review all applications on ‘rolling basis’.  Not surprisingly, New York, California, Texas, and Florida were the states with the largest requests for funding, with total requests of $5.137b.  Spending for the program as its stands today, must be made by June 30, 2022.
A number of Notebook OEMs have indicated that they are pursuing the education market beyond High School and commercial customers by increasing the size of Chromebook products, but many are expecting the FCC program to keep Chromebook shipments strong through much of next year, even with the slowdown in Japanese procurements.  Whether ECF participants spend allocations in 4Q or 1Q, there seems to be a limited window for Chromebook shipments to grow, with hope from producers that such programs will be continued into 2023.  However the success of the COVID-19 vaccine programs, both in the US and globally, will certainly have an effect of Chromebook demand, and while we do not expect such demand to disappear in 2023, we do expect to see demand level off next year. 

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.

Displays are devices that rely on electronics to refresh the image on the screen fast enough that raid changes in the image do not appear ‘jerky’, leave ‘trails’, or ‘smudges’.  This is especially important when watching fast moving images, such as in gaming or sports, and in the past the electronics in most displays refreshed 60 times each second, which seems like it should be sufficient.  However as the quality of images increases under 4K/UHD, those potential artifacts become more obvious, giving smartphone display designers the task of improving those types of images.  In order to do so, some display producers have doubled the refresh rate so that the screen is completely redrawn twice as fast as before, at 120 Hz.  This means that the movement of an object across the screen will be redrawn twice as many times as before, filling in the potential spaces that might have caused blur or other artifacts at 60 Hz.
This is an ideal solution in that it directly addresses the problem, however it does come with a negative.  Since the electronics is now drawing the screen twice as often as before, it consumes more power, and in mobile devices this means it reduces the time between battery recharging.  There are tricks that can help, such as ‘adaptive refresh’, which looks at the resolution of each image and adapts the refresh rate to that resolution, meaning that a higher resolution image would refresh at 120 Hz, while a lower resolution image, such as a static one or a news feed, would refresh at a much lower rate.  By adapting to the image quality, the display can conserve power, rather than being at 120 Hz for all resolution images.
This is a big selling point for displays, especially smartphone displays, as increasing battery capacity (usually along with size) is a difficult function is compact smartphones, so any way in which a smartphone can increase the time before charging is a big plus to users.  While 120 Hz refresh and adaptive displays are available from a number of smartphone brands, along with squeezing in bigger batteries, Apple has been particularly enamored with the idea of 120 Hz displays, and has employed then m in the iPhone 13 Pro  and the Pro Max.  While Apple did not detail test results, we have just seen the results of a test of the iPhone Pro Max as to how it would perform against other similar type phones as to battery life and the results are positive.  Here are the top contenders according to Anandtech.com:

​All in, even with differences in battery size, it seems that Apple’s processor, which is responsible for sampling the images and setting the refresh rate, does a better job at power efficiency than others, and Apple will eventually convert all of its iPhone displays to LTPO backplane technology which will add to the display’s power efficiency, as Samsung has begun to do, but the Apple hardware, despite a 13.1% drop in battery life vs. operating only in the 60 Hz mode, has already offset much of the higher power draw.

We noted on 7/15/21 in our note “Notebook Who’s Who” and again in our 7/30/21 note “OLED Laptops” that Samsung Display (pvt) was trying to develop further its OLED business by expanding RGB OLED production into notebook size panels at the beginning of this year.  Aside from the fact that Samsung Display is the leader in RGB OLED panel production, they have already established production capabilities for notebook panels, supplying to notebook leaders ASUS (2357.TT), Lenovo (992.HK), Dell (DELL) and parent Samsung Electronics (005930.KS) with two panel sizes (13.3” & 15.6”) while competitors LG Display (LPL), Everdisplay (688538.CH), and JOLED (pvt) are limited to single size panels.  As part of this expansion program, SDC has recently begun production of 14” OLED Notebook panels, which have already been allocated to new laptops from ASUS
The new 14” panels, which have a refresh rate of 90 Hz, are expected to appear in the recently announced Asus Zenbook, which will offer both a 4K and 2.8K option, starting at $1,400.  This is a big step up in price over the Asus Zenbook 13, which offers a 13.3” FHD OLED display option for ~$800, but the 90 Hz. refresh rate is a valuable on to gamers, who are the likely buyers, so we expect the higher price might not be as much of a stumbling block to gamers as it might be to the average consumer.  If there is some resistance to the higher price, the more budget oriented Asus line, the VivoBook, is expected to offer three size optional OLED screens starting at $750 and for those with deeper pockets and a flair for the dramatic can purchase the ZenBook Pro Duo 15 which has two OLED screens for a bit over $3,000.

But wait, there’s more…Asus’s competition is not to be vanquished when it comes to OLED laptops, with competitor Lenovo also announcing a number of OLED notebooks (SDC displays), including the Idea Pad Slim 7 Carbon, due next month that will also sport the SDC 14” OLED display, creating what the company says is the world’s lightest 14” laptop, coming in at just 2.37 lbs., albeit at a lower resolution than the Asus 14” offering, and for the very, very budget conscious, next month Lenovo is also offering the Chromebook Duet 5, an Chrome tablet with a detachable keyboard and an OLED display for only $430, likely the least expensive OLED notebook/tablet, at least for now.
All in, what it comes down to is that Samsung Display seems quite serious about living up to its own hype over laptop OLED displays and is following through on its commitment to expand offerings, and, as we mentioned in our July notes, is considering dedicating OLED capacity specifically for the production of RGB IT devices.  There has been speculation that Samsung Display will either convert existing fab space to Gen 6 OLED production or try to build out a new production facility using new technology that would allow it to produce RGB OLED panels in a Gen 8 environment*. 
The seemingly rapid adoption of this new panel size by primary producers gives more validity to either OLED expansion modality and will ramp up SDC’s ability to further dominate the RGB OLED space.  While much will depend on consumer acceptance of the intrinsic value of OLED over LCD at the notebook level, if nothing else, SDC seems to have stimulated the industry’s interest in larger RGB OLED sizes and unless there is some economic or technical impediment to using OLED in notebooks (which we do not expect), we see this as an open field for OLED expansion.  Expectations for OLED Notebook unit volumes and share are modest, with forecasts for this year between 3m and 4m units, or between 1.1% and 1.4% of total notebook shipments, and while up over 400% vs. the miniscule amounts produced last year, growth in 2022 is estimated to be between 55% and 80%, or between 5.6m and 6.5m units. 
These are paltry numbers when compared to unit volumes for RGB OLED smartphones, where expectations for OLED smartphone unit volumes are between 590m and 630m this year, however if we model the average size of an OLED notebook in 2021 as 14.5” (9:16 aspect ratio) and the average size of an OLED smartphone being 6.5” (9:19.5 aspect ratio), the 3.5m units expected this year would be the equivalent of just under 20m smartphones, and next year’s just over 6m OLED notebook units would be the equivalent of 34m OLED smartphones, assuming no average size growth for notebooks, which will likely not be the case.  As the growth in average smartphone area is close to a peak (excluding foldables), and the OLED notebook (and potentially monitor) sizes are still at the low end, that multiplier will continue to grow alongside the unit volumes, giving the RGB OLED notebook business a number of heady expansion years going forward.
*To learn more:
http://scmr-llc.com/blog/gen-8-rgb-oled-expands
http://scmr-llc.com/blog/samsung-display-the-big-oled-story-continues
http://scmr-llc.com/blog/samsung-oled-tv-update
​

Quanta Computer (2382.TT), the largest notebook OEM, with almost all top 10 notebook brands as major customers, has indicated that it expects to ship less notebooks in 3Q than in 2Q.  While the drop is expected to be a single digit decline q/q, the notebook market has seen strong shipments since 2Q 2020, a result of the necessity for both students and professionals to stay at home during the height of the COVID-19 pandemic.  The basis for the drop, according to Quanta, is weaker Chrome book shipments, a segment that has also been in demand given the lower price of Chromebooks relative to laptops and larger notebooks. 
On a more general basis, while revenue could still see some improvement in 3Q for notebook OEMs in general, those gains will come from mix and pricing, despite the typically seasonally strong 3Q as some of the global notebook acquisition programs in the education space come to an end or begin to tail off.  As we noted in our 7/14/21 note, global notebook shipments were up almost 20% last year, against a more typical 3% to 4%, with expectations for another 15% shipment growth again this year, which would imply 2H shipments of 115m, down ~18% from 1H, which seems a bit aggressive to us given the weakening shipment expectations for Chromebooks, which represented ~17.2% of total notebook shipments in 2Q ’21, up from 12.1% in 2Q ’20. 
Based on what seems to be the tone of a number of notebook OEMs and brands, we would expect the 2nd half shipment growth to be revised downward as demand weakens.  The one positive factor that could come into play is that as demand weakens it could put less pressure on component manufacturers, particularly semiconductor foundries, where capacity contention with other application segments has led to shortages or extended lead times.  As demand from Chromebook or notebook producers slows, the shortages relating to those products could lessen or abate, allowing lead times to be pulled in.  Whether that is a good thing against slower notebook/Chromebook demand remains to be seen, but it could lead to some shipment timelines being pulled in.  Unfortunately that also begs the question of whether those orders will remain as originally given as notebook and Chromebook brand targets could be in jeopardy of being lowered as3Q develops.
Looking a bit further down the supply chain, the last thing panel producers want to see in 2H is weakening demand for IT products (notebooks, Chromebooks, Monitors, Tablets) as they have shifted production capacity away from TV panel production toward what have been more profitable IT products.  Lower utilization would be the result if IT product targets are reduced, and while we expect a more optimistic view will be carried by most panel producers, we worry that there is little alternative to slowing production in such a case.  Those same utilization reductions will also signal considerably more difficulty for panel producers when it comes to panel prices, and while IT panel pricing increases have slowed a bit, they are still in positive territory.  TV panel prices, which have turned negative, have flattened panel producer revenue expectations, but with the additional leverage associated with IT products at most panel producers, the impact could be greater on the industry. 
These are still suppositions on our part, but changes have been occurring in CE product demand on an application by application basis as the pandemic (new cases) slows in much of the world.  Unfortunately that is not the case in the US both on a raw number and ‘per 100k’ basis (see Figs 5 & 6), but that does not seem to have made much of an impact on CE demand, as the educational market has siphoned off much of the stay-at-home demand last year or earlier this year, and with Federal, state, and local governments all pushing for students to return to classrooms, we expect relatively little incremental demand for notebooks and Chromebooks going forward.