OLED smartphones have been around technically since 2003, although the one OLED smartphone in that year, the Amoi S6, had only a 128 x 128 pixel grayscale OLED display, with Samsung releasing the first full color OLED display in 2004, sporting a massive 1.8” screen on its X120, and LG Electronics following in 2005 with a dual OLED display smartphone, the L5000, and by 2010 there were over 100 OLED smartphone models to choose from.  OLED tablets took a bit longer given the larger screen size, with Samsung’s Tab 7.7 in late 2011, although the use of OLED in tablets took longer to develop.

With estimates of almost 600m OLED smartphones being produced and over 700m small to mid-sized OLED devices total this year, OLED is no longer a ‘new’ technology and has found a significant place in the display world, but RGB OLED, the type that is used in such devices, has not progressed to IT devices, or has it?  We have looked at the laptop market, which would be the logical next-step for OLED displays, and were surprised to find such a large number of OLED laptops.  However we also found large discrepancies in estimates for the growth of that market, which is not all that surprising considering there are many ways it can be sliced, such as notebooks, all-in-ones, laptops, gaming laptops, Chromebooks, and even tablets, all of which can be included or excluded from estimates.  This leads to vast inconsistencies but using even the lowest possible estimate sources, ~2.6m units this year, the space is growing rapidly from almost nothing (~150,000 units) in 2019.
There are some limiting factors, particularly on the supply side as this relatively new segment must compete for capacity against high volume OLED smartphones, tablets, and smartwatches, all of which have well-established customers and justifiable pricing.  Large scale small panel OLED producers, such as Samsung Display (pvt), LG Display (LPL) and BOE (200725.CH), are careful to keep supply closely matched to demand, and  even with smaller Chinese OLED producers nipping at their heels, are careful not to over-expand and crater small panel OLED pricing.  However, if even the least aggressive estimates are calling for rapid expansion in the OLED notebook space, small panel OLED display producers will have to begin to dedicate more RGB OLED production to what are considerably larger notebook panel sizes, and with Apple (AAPL) looking to join the OLED tablet/laptop fray next year after converting its entire smartphone line, it is a topic close to the hearts of all small panel OLED suppliers.
Right now, OLED laptops come in two sizes almost exclusively, ~13.3” and 15.6”.  There are exceptions, but those two sizes are the current norm.  If we compare those two sizes against a typical 6.8” 9:16 smartphone display, the 13.3” notebook will take up 3.9 times the substrate space of the smartphone, while the 15.6” notebook would take up 5.3 times the substrate space, simply meaning that in a static capacity model if the mix between laptop sizes were even, the 2.6m OLED laptop estimate for this year would reduce the number of smartphones produced by over 12m units, creating a 2.1% shortfall in small panel OLED smartphone capacity.  While these numbers do match exactly to absolute fab production rates, they give a better understanding as to how the competition for small panel OLED capacity will fare as the OLED notebook market develops.
The number of OLED based notebooks varies on a daily basis as newer versions of models are added and older models are sold out, and not all models are available in the US, but the table below gives a sampling of some of those that have been announced and (hopefully) are available currently.  We note also that while some models show up on Amazon (AMZN) or Best Buy (BBY) sites, they are out of stock due to component shortages, and pricing, which we show only for reference, varies considerably with processor, memory, and drive configuration.  The pricing range is what we consider the most important.

​According to sources in Korea, Samsung Display (pvt) has upped its targets for OLED notebook panel production by between 37.5% and 50% for this year as overall notebook demand has been higher than expected due to COVID-19 and the gaming market continues to demand higher quality displays, such as OLED.  As we noted last month, Samsung Display is undergoing a number of capacity shifts, particularly at a new OLED line (A4E) that seems to be ahead of schedule, while currently producing larger OLED panels at its A2 fab.  Given the potential for additional production and the notebook/gaming demand, SDC seems more comfortable with higher targets.
Samsung Display’s previous target for OLED notebook panels had been 4m units this year but based on its expected shipment schedule, which currently accounts for between 4.2m and 4.6m units, the company believes they will be able to push that to between 5.5m and 6m units.  These are aggressive targets although estimates that over 37% (y/y) more OLED notebook panels were shipped in 1Q, has likely given SDC a bit more confidence in the new targets, but OLED notebooks are still relatively new and while the premiums for OLED notebooks over LCDs are less than we would have expected at this relatively early stage in their development (see our 5/20/21 note for details), sell-through in 2H is the key to bringing shipments up to those targets.  The good news for notebook brands is that OLED notebooks represent less than 2% of units for most brands, while OLED notebook penetration for Asus (2357.TT) and Samsung Electronics (005930.KS) are expected higher than average this year, leaving lots of room to grow the category, with most estimates for OLED notebook unit volume below SDC’s new target.

OLED TV set sales are growing and estimates for the number of OLED TV sets and panels have been increasing.  There has been much said about why expectations are increasing for OLED TV sets and panels this year, but it is all based on math.  We make the assumption that demand for OLED TV panels is, and has been for most periods, is sufficient to utilize 100% of the panels that are produced, with LG Display (LPL) being the de facto leader in the space.  Estimates for OLED TV set shipments in 2020 are ~3.65m units, and while we have seen set estimates for this year increase from 5.8m to 6.1m this year, does the math add up?
Based on our estimate for capacity growth at LG Display this year, which we set at 50.3%, that would push LGD’s panel capacity from last year’s 3.65m to 5.485m this year, so where do the other 615,000 sets come from based on external estimates?  Some of that comes from higher yield, which LGD is able to achieve just from building experience, particularly at the company’s newest OLED TV fab in Guangzhou, China, but that would not likely account for all of the increase, so we have to look elsewhere. 
Typically LGD had offered OLED TV panel sizes of 55”, 65”, and 77”, but began offering 48” panels late last year and now also offers 42” panels, and by using a production process called MMG (Multi-mode glass) not only can LGD increase substrate efficiency, but can produce 48” panels at the same time as larger sizes.  Given that smaller panel sizes should be able to produce less expensive TVs, it is logical to expect that once the smaller sizes are made widely available OLED TV set manufacturers will see higher unit volumes as the smaller sets become more popular.  There is an offset however, which is the increasing average size of OLED TVs, which is helped by a generally lower price as LGD’s production become more efficient, but the table below shows that for each smaller panel size LGD should be able to produce ~30% more units.
Of course fabs don’t run according to such tables as the number of units cut from a particular size substrate does not equate to 100% efficiency, nor does the fab completely dictate the size of units being made available to customers, but there is some give and play between what the fab ‘wants’ to produce to be more profitable, and what the customer believes they can sell most profitably.  However by adjusting the mix between larger and smaller sizes the number of units can be changed significantly, with (even without MMG) two less 77” panels produced allows for eight 48” panels to be produced, making up what would be ~50,000 panels each month this year to reach updated estimates.  We are not saying that LGD is making such a change, but pointing out how sensitive the panel mix is to unit volumes and how easily relatively small changes can influence volumes. 
While the math behind panel estimates is relatively simple and tends to be primarily based on capacity, as long as demand remains at or above capacity the math holds true, and in the case of OLED TV panels, while they sell at a premium to LCD TV panels, the rapid increases seen in LCD TV panels has narrowed the gap, which should give OLED TV demand a continuing boost, along with the smaller and less costly offerings.  Smaller panels bigger unit numbers. 

There are lots of estimates for small panel OLED displays both LCD and OLED, with the focus on smartphone or feature phones, and while unit volumes and sales are certainly important, another metric we track is trends in new models, both the number of available models and the features.  Our most recent look was concerning the use of OLED displays in smartphones, where we were looking to see how estimates for OLED penetration, usually made on a unit or area basis, compared to OLED smartphone penetration from a model standpoint.
Given that the data collected for 2021 is for only the first half of this year, and that on average (last two years) 55.2% of available models are released in the 2nd half of the year, we can make some assumptions about how many new smartphone models will be released and available this year and what percentage of those will be OLED or LCD.  Based on the typical split between 1H and 2H, the model suggests that this will be a record year for new smartphone models, reaching a projected 426 smartphone models released or available this year, up 12.5% from last year, and slightly above the peak of the last 5 years (2017) (Fig. 1).  OLED share itself has been increasing in new models, with a projected 48.6% share of new & available models by the end of this year and a slightly higher share (over 50%) for the 1st half (Fig. 2).

​The same data gives us some understanding of the size of new & available models, which has changed substantially over the last few years, but rather than plot the share of each size of smartphone over the last 5 years, which would present a complex visual, we show in Fig. 3, the largest size category for each year and the share of the total that that size held.   Back in 2017 the 5.0” to 5.5” category was not only the largest, but also held over a 75% share of the total, however within a year that share dropped to under 30% as smartphone sizes began to increase rapidly and by 2019 the largest size category for smartphones was 6.2%.  While the average smartphone has continued to increase in size, the 6.4”to 6.5” category has remained the largest for smartphones both last year and this year and continues to increase as a percentage of the total from 35.7% last year to a projected 41.6% this year.  With the increasing number of foldables, all of which sport OLED displays, we expect the size categories at and above 7” to continue to expand and the OLED share of new and available smartphones to continue to increase.

OLED materials, particularly emitting materials, are very specialized materials.  The recipe’s used by each OLED producer as to the composition and amounts of their OLED stack materials are as secretive as the formula for Coca Cola™, and are constantly under development.  Companies like Universal Display (OLED), Idemitsu Kosan (5019.JP), DS Neolux (213420.KS), Solus (336370.KS), Hodogaya (4112.JP), Jilin (688378.CH), Sumitomo (4005.JP), and Merck (MRK) produce various stack materials that are sold to OLED producers to create their particular stack recipes.   
When it comes to emitters, the light emitting element of OLED displays, there are two basic categories that emitters fall into, the first being fluorescent emitters and the second being phosphorescent emitters.  Simply put, phosphorescent emitters produce, in theory, 3 times the light of fluorescent emitters, so OLED producers are always looking to use phosphorescents in combination with other stack materials.  Unfortunately, while red and green phosphorescent emitters exist and are commonly used in RGB OLED displays, blue phosphorescent materials have proven far more difficult to synthesize for a number of reasons, leaving only blue fluorescent emitters as that 3rd component of RGB OLED displays. 
This has ramifications as to a number of display metrics, however all three emitter materials are combinations of a ‘host’ and a ‘dopant’, which when combined form the emissive layer of an OLED.  With a wide variety of host materials and an every changing list of organo-metallic dopants, the combinations are almost endless, with new molecules being developed continuously.  As each new molecule or combination is developed, they are tested by OLED producers and if they provide enough of an advantage over existing emitter combinations, they are adopted. 
As Universal Display is the only producer of phosphorescent emitters due to its IP ownership, red and green host materials are able to be developed by other suppliers that will ‘help’ the red and green emitters to operate more efficiently., however in the case of blue, which is currently a fluorescent emitter, both the emitter and the host can be developed by suppliers, which makes for a more competitive market.
LG Display (LPL) currently the only volume producer of OLED TV displays, does not use the RGB combination process for its OLED TVs, but uses a yellow/green phosphorescent emitter from UDC and a blue fluorescent emitter, which when combined produce while light (WOLED), which is then converted to colors using a color filter.  As this two color combination is half fluorescent and half phosphorescent, and therefore seeing less of an efficiency improvement that the RGB combination receives (66%), LG Display is constantly pushing to refine its structures and materials to increase efficiency, leaving the competition open to all potential OLED (blue) emitter and host material suppliers.  This means each is constantly pushing its development teams to build a better blue emitter/host ‘mousetrap’ to garner LG Display’s fluorescent emitter material business.
Changing materials in the OLED stack is certainly something that the production folks at LG Display do not look forward to, as stack material changes can garner changes to layer thickness, types of conjunctive materials, and potentially changes as far forward as TFT structure or values. Any change that might need significant downtime to implement costs the company lost revenue and lower margins, so changes are not taken lightly, and in LG Display’s case, for that reason, LGD uses different materials at its fabs in South Korea than it does in its fab in China, with the Chinese fab using a newer blue host.
The blue host material being used at LGD’s OLED fabs in Paju, South Korea is produced primarily by Idemitsu Kosan, but LG Chem (051910.KS) began supplying blue host to its affiliate last year, having licensed the technology from Idemitsu.  However LG Chem purchased a number of patents relating to blue host from Dupont (DPT.FP) in 2019, and has developed a new blue host that is to compete with the blue host materials supplied to LGD’s China OLED fab, some of which is being produced by DuPont for others as an OEM.  If LG Chem is successful in its effort to become a ‘new blue host’ supplier to LGD’s China fab, they will have the opportunity to be a supplier when LGD converts its two fabs in South Korea to the newer, more advanced stack materials later this year and in 1H ’22, and with the limited number of blue fluorescent emitter and host suppliers, LG Display will gain the supplier diversity that it needs to avoid any potential limitations on supply from Japanese producers and an affiliated ally.

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

The stack of materials that creates an OLED display seems simple, essentially a light emitting layer between an anode and a cathode, but it is certainly not.  There are a number of ‘other’ material layers that support the emitting layer (EML), including Hole Injection Layers (HIL), Hole Transport Layers (HTL), Electron Blocking Layers (EBL), Hole Blocking Layers (HBL), Electron Transport Layers (ETL), and Electron Injection Layers (EIL), a number of which are supplied by different manufacturers.  In some stack designs there are multiple layers of these materials, adding to the complexity, and with a number of companies vying for each stack slot, despite the fact that there are relatively few OLED stack material suppliers, the competition is fierce.
Solus Advanced Materials (336370.KS) is one of those competitors, and after committing $25m to build a new OLED material production facility that will be available in the 2nd half of 2022, seems to have edged its way into the OLED material stack at LG Display (LPL), or at least at one LG Display OLED fab.  According to Korean sources, Solus is to replace two of the four Hole Transport layers at LGD’s E3 OLED fab in Paju, South Korea, and while the amount of material involved for Solus is relatively small when looked at across the entire stack, it is important in that chemical giant Merck (MRK) has been the sole supplier of all four HTL layers to LG Display until now. 
Again Solus is supplying only two of the four HTL layers at one of LG Display’s three OLED fabs, but it does mark a significant change for LG Display, who has been looking to add an additional HTL supplier, considering Merck to be both expensive and unreliable according to local sources.  Using a South Korean based supplier is also a benefit, as South Korean OLED producers, Samsung Display (pvt) and LG Display are still quite dependent on materials supplied by other countries, particularly Japan, where political issues have caused some of those materials to be limited by the Japanese government.  As Solus expands production next year in China, it will try to replace Merck at LG Display’s Guangzhou fab, LG Display’s largest OLED fab.
Solus is also a supplier of what is known as advanced ETL to Samsung Display, which SDC has been using in its production of small and mid-sized OLED panels for almost eight years, and is said to be developing a similar material for Samsung Display’s QD/OLED project. Solus also supplies capping material, a non-emitting material used to cover the cathode in the OLED stack.  Since this material is not emissive, the development of new capping materials is much slower than other materials in the OLED stack, where new emissive and helper materials are being developed almost monthly.  This gives Solus a more stable product, while developing newer and more competitive materials for Samsung and others.
As is well-known, the emissive materials market is dominated by Universal Display (OLED) who owns the IP relating to the use of metal-organic phosphorescent materials.  In RGB displays, such as those produced by Samsung Display, two of the three emissive materials are phosphorescent based, while the third, blue, is fluorescent, and primarily supplied by Idemitsu Kosan (5019.JP), however LG Display’s large panel OLED displays are produced using a single phosphorescent emitter, UDC’s yellow/green and a blue fluorescent material.  This leaves open competition for all of the other materials in the OLED stack and companies like DS Neolux (213420.KS), Hodogaya (4112.JP), Sumitomo (4005.JP), and JSR (4185.JP) are constantly supplying new stack materials to both South Korean and Chinese OLED producers to replace or add to existing OLED production material stacks and all OLED producers are working toward improving their displays by upgrading their stack materials.  This leads to a very ‘fluid’ market that changes with every new stack implementation, and while the number of high-grade OLED material suppliers stays about the same, the chessboard of who supplies what is constantly changing.

​OLED materials are drivers for companies like Universal Display (OLED), DS Neolux (213420.KS), Material Science (pvt), Jilin (688378.CH), and Idemitsu (5019.JP), along with divisions of a number of well-known global chemical companies, but there are many materials used in the OLED stack, and every OLED producer has its own recipe as to what and how much of these materials it uses, with those recipe’s changing regularly.  While all the materials in an OLED stack are important, the emissive materials are the key to the actual operation of the device, with all of the other materials acting as ‘supporters’ of the emitters, giving them what might be considered ‘better working conditions’, allowing them to operate at their best.
There is some question about the materials that are included in OLED material sales data, and without the dataset, it is difficult to make sure they are what they say they are, especially when translations are concerned, but we present the data below as a reference point for better understanding the companies involved and the growth of the OLED industry itself.
UBI expects the OLED emissive materials market to expand from $1.75b this year to $2.25b in 2025, or 29.1%, with y/y growth in 2022 through 2025 of 2.7%, 9.1%, 7.9%, and 6.8% respectively.  While China will certainly increase their share of these materials, with BOE (200725.CH) leading the way, Samsung Display (pvt) and LG Display (LPL) combined will still be the largest purchasers, and as a country will purchase over 70% of total sales..  UBI goes further in saying that RGB OLED materials, essentially those used in all OLED displays other than OLED TVs will make up 78% of total OLED emission material purchases in 2025, down from 81.4% this year, while WRGB OLED emission materials, those used in OLED TVs, will increase from 18.3% currently, to 20.4% in 2025.
Again, without knowing exactly what materials and categories of materials are contained in the numbers, it is difficult to match them up with actual company results in order to derive the amount of actual emissive material sold and the portion of the total that are other stack materials.  Universal Display, who through control of a considerable amount of OLED IP, owns 2/3 of the direct emission material RGB market (red and green) and half of the direct emission WOLED market yellow/green), is expected to generate over $300m in material sales this year.  Based on our estimate of UDC’s share and UBI’s total sales estimate, UDC should see growth of at least ~29% in true emissive material sales during the period between 2021 and 2025, which we believe understates the potential growth for true emissive materials under the UBI scenario. 
These are back-of-the-envelope estimates, but we note that all the way back in 2014 UBI made some similar forecasts, projecting OLED emission materials to grow from $540m in 2015 to $2.5b in 2020, and while we almost always look at longer-term estimates with skepticism, we expect they might have understated their case currently after overstating it years ago.
As Chinese panel producers did with LCD, expanding capacity to the point at which they are the dominant supplier and low cost producer, they will likely continue to do with small panel OLED, and the fact that BOE is currently ramping two Gen 6 OLED fabs and building out a 3rd, points to that conclusion.  Korean producers, particularly Samsung Display, have the advantage of production experience, which gives them a lead in advanced OLED technologies, but they did have the same lead in LCD, and their exit from the large panel LCD space is a matter of record.  Nothing happens overnight and there are always bumps along the way, but the investment already made in OLED panel production will keep it as a viable and growing display technology for years to come.

​TCL (000100.CH), Chinastar (pvt), a TCL affiliate, and the Guangzhou municipal government signed a cooperation agreement concerning the development of a Gen 8.5 OLED printing production line recently, however the agreement specified no schedule and it seems that the original planning schedule, which was targeting production in 2024, has been delayed due to the outbreak of COVID-19 in Japan.  The $6.8b project, is in addition to TCL’s recent $187m investment in Japan’s JOLED (pvt) who has been cooperating with TCL/Chinastar toward the development of a large panel OLED printing process.  A number of TCL engineers are said to be in Japan to work with JOLED on their production line to verify the process, which has led to sample production of a 65” 8K display, however the COVID outbreak has slowed that development.
While overall even the production of an 8K 65” printed OLED sample is an interesting development, the production of such large panel printed OLED displays needs to be transferred to a mass production setting, which is at the core of the Guangzhou agreement.  However the lack of a timetable leaves a bit to be desired as to the current commitment of both parties, which is likely a function of the necessity to take the development of a mass production process further.  While the Chinese press indicates that China is “close” to mass production of printed OLED displays, if the TCL fab is to be the facility that spearheads that production, it might be a number of year before we see actual product.

​On Tuesday we noted that Samsung Display (pvt) had decided to undertake the conversion of its Gen 7 fab in Asan, South Korea from LCD to OLED as part of its overall plan to end production of large panel LCD displays.  The fab, known as L7-2, has been rumored to be the primary candidate for a technology change and some or all of the equipment has been offered for sale.  As we noted, a contract was let with YMC (155650.KS) through Samsung Construction & Trading (028260.KS), a major affiliate of the Samsung Group (pvt), that extended through July 20 ($18.5m) to open the fab floor space.  The project, which is expected to cost ~$1b, will create a 15,000 sheet/month OLED line with expansion capabilities to be decided later this year.
We noted earlier that we expect production to begin for phase 1 of the A4E project to be completed by 9/22, a bit earlier than our original; projection of 3/2023, but we are keeping that schedule as tentative, given issues surrounding equipment availability and logistics due to COVID-19 in Asia.  The phase 2 expansion, which we project will be completed between 9/23 and 3/24 is also tentative, but thus far adheres to the timetable set by the phase 1 conversion.
We have received conflicting information concerning whether Samsung will develop additional LTPS backplane capacity for A4E, with some indicating that the loss of LTPS capacity at Samsung’s A3 fab, which saw capacity conversion to LTPO backplane technology for Apple (AAPL), will be made up at A4E, while others point to less of a need for LTPS as LTPO becomes more popular. 
We still expect Samsung to continue to produce large panel displays from its Gen 8.5 fab L8-2, but believe SDC intends to convert its L8-1 fab to OLED, under a $2b fab for OLED IT products, meaning notebook and monitor displays.  As this line would be developed using RGB technology, similar to what Samsung currently uses for its small panel OLED production, the conversion would entail similar equipment to L7-2, however we expect the backplane will be IGZO, which could take a bit longer to stabilize than might be the case for other backplane technologies.  
While we have heard that SDC has also been shopping the equipment in L8-1, there is speculation that SDC will keep the fab’s Gen 8 configuration, which would be a first for the company’s OLED production.  That kind of decision would be based on the company’s expectations for the panel sizes it expects to be producing in the future, as substrate efficiency between Gen 6 and Gen 8.5 fabs can vary considerably as panel sizes increase.  With ample space for additional capacity in this conversion, SDC has the option of expanding Gen 8.5 or adding Gen 6 capacity in the future.
While these are ambitious plans for SDC, given the display industry’s optimistic view, spurred on by higher panel prices, it is to be expected that this feeds the capacity decision process.  While there is certainly competition to Samsung’s lead in small panel OLED production, they are still the leader and must maintain that lead by continuing to offer a wider variety of OLED products, as they are doing with OLED notebook and monitor panels and with foldable.  While we expect final decisions on SDC’s QD/OLED project have yet to be made, they continue to make the necessary capex plans to support their leadership position in what would now be called the small and medium sized OLED panel domain.