Samsung Display’s (pvt) CEO, JS Choi, seems to have taken on the additional roll of head of SDC marketing as he has been quite visible over the last few months promoting SDC’s new and developing products at conferences and trade shows all across the globe.  He did not miss a beat during his speaking time at the Intel (INTC) 2022 Innovation Forum to demonstrate a prototype of a slideable laptop that the company is developing that expands from a 13” tablet to a 17” laptop (see Figure 1 & link below).  Similar to smaller smartphone sized expandable/rollable prototypes, this device allows the user to pull the side frame to extend the tablet to laptop size, with the extended portion of the display being coiled internally until expanded.  When released the extended frame slides back to the smaller size and the additional display is then re-rolled internally.
While the SDC CEO ‘announced’ the device, no date for its release was given, which keeps it in the same category as the S-Folding displays (see Figure 2) that SDC has shown in recent months, that of ‘potential products’ that SDC and partners or affiliates are developing to exploit SDC’s foldable OLED display prowess.  We expect that SDC’s parent Samsung Electronics (005930.KS) will release at least one ‘advanced’ foldable/rollable model in 2023, and given the company’s massive media blitz promoting the most recent Galaxy Z Flip and Z Fold smartphones, there will be considerable customer interest in such as the category develops and refinements to the technology continue as we get closer to the reality of a truly rollable display configuration, as we show in Figure 3, a dream device (our favorite) that Universal Display (OLED) burned into our minds years ago to promote OLED technology.
Samsung Display has been the leader in the flexible display market since its initial release of the Galaxy Round in 2013 and the Galaxy Note Edge in 2014, the first commercial flexible OLED products[1], and continues to hold that lead, with China’s BOE (200725.CH) the only sizable contender albeit with a 9.2% share vs. SDC’s 71.2% in 2Q.  As the small panel OLED display market continues to mature, display producers struggle to differentiate their products to void the inevitable price degradation that occurs in the display space. 
By developing new small panel OLED display formats, such as those noted above, Samsung has been able to stay a step ahead of the pack, both on the production side with SDC, and on the product side with its successful Z Fold series of foldable smartphones.  That said, now that the public has been informed and likely convinced that foldable displays are smartphone fans’ new toy, there will be considerable momentum for foldable displays going forward, however that comes with the same caveats as any other feature that appears in consumer related devices, and that is practicality.  While foldable displays represent a significant leap in display technology, unless such displays serve a practical purpose, they will become ‘just another feature’, like multiple cameras, rapid chargers, or borderless displays, that consumers will assume they get for free after the initial excitement dies down.  If Samsung and other brands are able to come up with foldable/rollable devices that actually benefit consumers, the technology will have an extended lifetime and appeal, otherwise it will disappear into the world of generic display technology.


[1] Other brands have shown earlier prototypes of flexible OLED displays or devices, some based on e-paper or polymer materials, but we still consider Samsung’s ability for high volume flexible OLED mass production for the Note Edge to be the actual start of the ‘flexible OLED Age’.

https://www.digitaltrends.com/wp-content/uploads/2022/09/samsung-slidable-PC.webp?fit=720%2C423&p=1  (Ctl + Click)

​While the data we have on small panel OLED display demand is preliminary in that it represents only the rigid small panel display market, it is a bit disturbing in that actual 2Q small panel rigid OLED display demand was quite a bit below expectations.  We do note that rigid small panel OLED display share continues to decline, falling from 47.2% in 2020 to 44.0% last year and 38.2% in 2Q ’22, so the flexible small panel OLED business would be more representative of the overall small panel OLED display space, however the drop off in small panel rigid demand in 2Q was far greater than expected, pushing down 3Q expectations, and could portend 2Q small panel flexible display actual results and similarly lowered 3Q expectations.
Based on our data, 2Q small panel OLED rigid display demand was 25.9% below expectations, putting it down 19.5% q/q and down 33.2% y/y, led by a substantial difference between actual demand and 2Q expectations from Samsung (-37.4%) and Xiaomi (1810.HK) (-21.4%).  3Q expectations for small panel rigid OLED demand is now expected to decline by 25.9% q/q which implies a 46.5% decline in small panel rigid OLED demand on a y/y basis.  Again, rigid OLED is only 38.2% (2Q) of total small panel OLED display demand, but with 2Q actuals coming in so far below expectations for rigid small panel OLED, it is noteworthy in that we expect similar results from small panel flexible OLED data over the next week or so.  While much of the trade talk has been on the effect of inflation on demand in the LCD space, it looks like the small panel OLED display space was not spared based on this preliminary data.

Earlier this month we noted that it has been a difficult year for WOLED TV, with negotiations between Samsung Electronics and LG Display (LPL) for the purchase of ~2m WOLED displays failing, and overall TV demand falling below expectations as the global economy faced rising inflation and rising interest rates.  Our two demand scenarios yielded unit volume estimates of 7.77m units as the best case and 7.27m units as the worst case, with a ~3% over-supply in the best case and a ~17% oversupply in the worst case[1].  Since then it seems estimates for WOLED TV shipments have continued to erode with back half production being lowered at LG Display, the sole producer of WOLED panels for TV, and the lack of an agreement with Samsung, weak overall TV demand, and continuing LCD panel price declines, all contributing to lower expectations.
With our worst case estimate looking the more likely, we move our attention to 2023 for WOLED TV set shipments and look toward the possible scenarios that might develop next year.  While there are certainly many variable that could come into play during 2023 that would affect OLED TV shipments, we focus on two.  Fist, whether Samsung and LG Display can come to terms as to a deal for what would likely be ~2m WOLED units, and the price of LCD TV panels.  To some degree they are dependent on each other as the relative value of LGD’s WOLED panels to Samsung would be determined by Samsung’s alternative, which would likely be LCD panels with Mini-LED/QD backlighting, already a mainstay of Samsung’s premium TV business, so if LCD TV panel prices continue to decline, we expect Samsung will opt for the less expensive solution, LCD, and LGD will face more typical OLED TV demand.
As we have mentioned previously, TV panel prices, while still declining m/m, have at least slowed their precipitous declines, and could see at least a shot at stability toward the end of this year.  That said, we still believe it will be a rather difficult holiday season for the TV set market as inventories are coming into the holidays higher than demand might portend, and while some panel producers have reduced utilization rates substantially, others less so, reducing the drawn down of inventory levels.  If holiday sales are enough to deplete excess TV panel inventory, it could set the tone for at least a small TV panel price recovery in late 1Q ’23 and that scenario would, in our view, give Samsung more incentive to strike a deal with LG Display as the value of relatively fixed price WOLED panels would look more attractive.
All in, we see a best case scenario of 9.25m units next year and a worst case of 8.5m units as shown below, with both Samsung’s potential decision and LCD TV panel prices as the swing factors.  Samsung does have the upper hand in the negotiations, especially when it comes to negotiating prices for LCD TV panels, as they are the largest purchaser of LCD panels that has no internal large panel LCD production capabilities.  While there are no other OLED TV panel producers who could supply mass production level volume, other than LG Display, Samsung seems to have chosen the LCD alternative this year and could do so again next year.


[1] 10% oversupply would be the normal baseline.

​We have mentioned flexible OLED panel producer Royole (pvt) a number of times over the years, first as the winner in the race to produce a commercial foldable OLED display (although it was a developer’s kit), beating small panel OLED leader Samsung Display (pvt) and Samsung Electronics (005930.KS), who now dominate the space, and later as the company repeatedly touted itself as the leader in China’s foldable OLED development’ and its leader as a genius who beat the leaders at their own game.  The company was able to raise over $1.1b from Chinese investors, venture firms and regional and state-owned banks and filed an S-1 with the SEC for an IPO in 2020 at a valuation of ~$6b.  Unfortunately the documents seem to indicate that very few of the company’s foldable phones had actually been sold and raised questions about the company’s Gen 6 flexible OLED production line, said to have cost a fraction of typical OLED fab costs due to its ‘unique’ processes, which eventually caused IPO plans to be scrapped.
The company continued its development plans with the release of a 2nd generation foldable later in 2020 and announced plans to build another flexible OLED fab ($2.4b) in Qingdao in cooperation with a number of local state-run organizations and file papers for listing on the Chinese STAR board where requirements were a bit less onerous.  Unfortunately the company did not meet those requirements and the STAR IPO was rejected as rumors of missed payments to employees and suppliers began to surface.  There was considerable talk of potential bailout partners for a few months late last year and early this year but by May Royole management issued a notice to many employees requesting that they take long (3 month) vacations, which did little but to stimulate workers to protest to the local government.  Some workers were paid missing wages by the local government but it seems the handwriting was already on the wall and no bailout appeared, leaving creditors hanging as to when or if they were to get paid as the company continued to flounder.
Recently a number of those creditors filed redress documents against the company and further investigation led to the discovery that there were a number of pending disputes between the company and construction companies, service providers, public relations firms, and advertising companies, which forced a review of the company’s standing by the courts.  As of the end of last month the courts ruled in favor of the plaintiffs and froze what came to $5.3m in assets held by a company holding entity, essentially preventing the company from access to any capital, potentially signaling the end to the company’s operations, at least until the courts can sort out the complete asset and creditor lists.
As we had noted a number of times, we have doubted Royole’s abilities from the start, as we could find few who had any customer relationships with the company, and once we were able to see paperwork from the IPO filings, it became obvious that there had been considerable speculation as to the company’s prospects when early funding was made, especially around the time of the aborted STAR listing, which placed a $2+b valuation on the company.  It was not that we doubted the ability of a small company to find a shorter path to building a better mousetrap than its infinitely larger brethren, but that the massive hype behind the company’s founder’s ability to create a process that cost a small percentage of the manufacturing cost of flexible OLED production, without any details ever being disclosed, seemed a bit of artifice, which it seems it was.  While we don’t know what the courts will ultimately decide, we expect Royole will likely be shut down, a sad day for unicorns everywhere given the hopes originally placed on the company’s success, but sooner or later Royole had to pay the piper….

​In a recent interview, Mike Hack, a VP of Business Development at Universal Display (OLED), indicated that regardless of whether UDC or another company was able to develop a commercial blue phosphorescent OLED emitter material, they would still have to obtain a license from UDC, which we assume, would entail paying royalties.  The conversation came about as Samsung recently purchased the IP assets of blue TADF developer Cynora (pvt), without actually purchasing the development team or other assets.  This implied that Samsung was either protecting its own development program by trying to cover a large swath of potential TADF IP, or they were trying to keep another party from acquiring same.
Additionally, the CEO of Samsung Display indicated that the company was working on the development of its own ‘blue’ , which was a bit unusual in that most emitter materials are developed by companies such as UDC, along with customers who tend to provide parameters and leave the actual chemistry to others who have background in material science.  We are still not convinced that the statements made by SDC were quite what they seemed and more likely SDC is involved in the development of a blue emitter material with a partner, although perhaps a bit more deeply than in the past, but those statements opened the door to further questions about who will be the first to commercialize a blue emitter and how it might be licensed.
US patent law is about as complex and arcane as law can be and requires very specific knowledge that can require understanding both science and the nuances of language, but we expect Mr. Hack was referring to UDC’s ownership of Utility patents that cover the use of heavy metals in organic phosphorescent materials and their use in a light-emitting device.  The metals involved are Iridium, Osmium, Platinum and others, so if someone were to find another way to produce a phosphorescent emitter that did not use heavy metal ligands, they might be able to bypass the material side of the IP, but if they were to use a phosphorescent material to produce a light-emitting device, they would have to license the IP as Mr. Hack suggested and while such a new material could be produced and sold by other than UDC, its use in any device would require licensing. 
We are the first to admit we are not patent attorneys or organic material scientists, but after reading hundreds of patents relating to organic materials we have some knowledge of how the system works.  For reference…
There are requirements that must be met to apply for patent protection, and here is where things get fuzzy.  The first requirement is it has to be ‘patentable subject matter’, which seems obvious until you ask what is patentable subject matter, and that is somewhat open to legal interpretation.  Some of the things that are not patentable are natural phenomena, abstract ideas, printed matter, and business methods, however the last item is no longer part of the ‘no’ list as new rulings have allowed certain business processes.  Additional requirements are the patent has to be novel, it has to have utility, it has to be non-obvious, and it has to be subject to ‘enablement’, with each of those being subject to interpretation.  In terms of just ‘utility’ or the ability to garner a ‘utility patent’  the subject has to be a process, a machine, a composition of matter, a manufacturing process, and an improvement over existing process or IP.  If that doesn’t prove that IP is a subject that could lend itself to an almost infinite amount of conjecture, and if the US patent courts are any indication, it does.
That said, while the specific IP relating to Mr. Hack’s comments were not given, the fact that every commercial OLED manufacturer (or at least those producing full color OLED displays with phosphorescent materials, which is most of them) licenses UDC’s device  and material patents, is a good indication that the vast UDC IP portfolio covers all aspects of using phosphorescent materials in a light-emitting device and that regardless of who is the first to commercialize a blue phosphorescent emitter, license negotiations will occur with UDC. 

OLED TV, continues to grow as a percentage of total TV sales and shipments, but in the ‘premium’ TV market, which, in theory, consists of OLED TVs, 8K TVs (all types), LCD TVs with Quantum Dots, which would include all with Mini-LEDs., OLED TVs face a more difficult share growth path as overall LCD capacity is vastly larger than  that of OLED TV capacity and the inclusion of a quantum dot layer does not require dedicated fabs, as does OLED TV production.  Given that LG Display (LPL) is the primary producer of OLED TV displays, with Samsung Display (pvt) recently joining with its QD/OLED offerings, maximum capacity for OLED TV is limited to the existing capacity of LG Display and Samsung Display, which is 190,000 Gen 8.5 sheets/month between the two.
While we expect Samsung Display to increase its QD/OLED capacity over the next 18 months, overall OLED capacity seems static for the remainder of 2022 and at least the first half of 2023, if not the entire year.  Estimates for display equipment spending overall have come down for this year as high inventory levels and declining panel prices have slowed expansion plans across the industry, and while spending for LCD will come down by 28.5% y/y spending for OLED (both large and small panel) is expected to increase by 21.9%.  Both categories are expected to decline next year but return to growth in 2024 for both categories, while in 2025 LCD equipment spending is expected to decline while OLED equipment spending is expected to increase as shown in Figure 1.  We are a bit skeptical as to by how much LCD and OLED equipment spending will decline next year and could foresee a scenario where some of the equipment spending currently estimated for 2024 and 2025 could find its way back into 2023, but for now the outlook for 2023 display equipment spending continues to look rather grim.
Along with the decline in spending this year and next comes the decline in TV set shipments overall, which have been declining yearly after peaking in 2020 during the early days of the COVID pandemic.  Both Samsung (005930.KS) Electronics and LG Electronics (066570.KS), the leaders in TV set sales, are expected to see declines in shipments this year, leading to a unit volume decline in set units this year of ~3%.  While we expect much of the unit decline will fall to generic LCD TV sets, the decline has put pressure on the overall TV market, including OLED TVs.  With estimates of ~10m units for WOLED panel shipments this year, we believe that the potential for LGD to miss this target has increased, particularly given that the negotiations between Samsung and LG Display for the purchase of ~2m WOLED panels this year seem to have evaporated. 
While Samsung Display’s QD/OLED shipments will be modest this year, likely under 1m units, they will also impact what might have been potential WOLED panel shipments from LGD, which adds to the possibility of a shortfall.  On the positive side of the ledger, we expect Sony (SNE) to increase its presence in the OLED space, although they will be a QD/OLED customer, along with Samsung Electronics, which could lessen the positive impact of the Sony OLED expansion this year.  Recently there have been rumors that utilization rates have dropped at LG Display’s E4 fab, the larger of LGD’s South Korean OLED fabs, which could indicate that like LCD panel producers, LGD is trying to work down some excess inventory.  With 79 days until the unofficial start of the holiday season a slowdown in WOLED production does not bode well for the full year target of 10m units, however as long as the potential shortfall is not greater than 2m units, there will be some, albeit small, growth in the OLED TV business this year. 
The bigger risk is that LGD continues to produce at a rate that gets it near or to its target of 10m panels as this will create an even larger inventory issue going into 2023.  We expect production to decline by over 18% q/q in 3Q and by ~15% in 4Q, along with a modest (6.8%) increase in demand over the worst case scenario, which would create a 13.0% panel excess.  Given a safety level of 10%, the best case scenario would set the stage for a better 2023, while the worst case scenario would create a ~27% excess in panel stock, making 2023 another difficult year.  Much will rest on LGD’s production decisions and brand demand, but we expect TV brands are ordering on an almost day-to-day basis to try to gauge how consumer demand is flowing.

As we have noted many times, typical small OLED devices such as smartphones and tablets operate using RGB (Red, green, blue) sub-pixels to create color.  The RGB process differs from large panel OLED manufacturing, which coats the substrate surface with a combination of OLED materials that create white light, which is then passed through a color filter, essentially a sheet of red, green, and blue dots, to create color.  The RGB process is more complex, involving separate process steps for each color and has limitations on the size of the substrate, but the color filter in the WOLED process reduces the amount of light that reaches the user while the RGB stack does not.  The red and green (and yellow/green in the case of WOLED) OLED emitters are phosphorescent materials, which simply put, generate much more light than fluorescent materials, such as the blue emitter material used in both instances, as a commercial blue phosphorescent emitter does not exist…yet.
There are a number of large companies involved in R&D to develop a blue phosphorescent OLED emitter as its use would vastly improve the characteristics of the OLED stack, but, as opposed to red and green OLED emitters, the energy levels of blue emitters makes them unstable and limits their lifetimes.  Universal Display OLED) the primary supplier of phosphorescent OLED emitters to the industry spends ~$20m/quarter on R&D, and while not all of that goes toward the development of blue phosphorescent emitters, we expect a large portion of that budget does.  Of course, OLED panel producers, the buyers of phosphorescent OLED materials, have a particular interest in the development of a blue phosphorescent OLED emitter, both from the standpoint of improving the efficiency and quality of their OLED display products, and from a competitive standpoint.  The quality side is easy to understand but owning the IP to such a material, as does UDC for red and green, would be an enormous asset and would allow the owner to license (or not license) or sell (or not sell) the material to other OLED display producers.
All  OLED producers test emitter materials, both the emitters themselves and host materials in which the emitters are ‘doped’, looking for, in the case of blue, a phosphorescent material that is ‘deep blue’, has a high efficiency, and a long lifetime, but as manufacturers their job is to produce OLED panels, not research new OLED materials, and most do not have the resources to do so, however Samsung Display (pvt), the largest producer of small panel (RGB) OLED displays and affiliate of Samsung Electronics (005930.KS), the largest producer of OLED smartphone, does.  In our 8/26/22 note, we mentioned that the CEO of Samsung Display indicated that it expects to move from using fluorescent blue emitter material to using blue phosphorescent or blue TADF emitter materials.  While we believe all OLED producers have the same plans ‘eventually’, when a commercial blue phosphorescent emitter is developed, we expect SDC or SDC and a partner will be the first to commercialize such a material.
SDC has applied for a number of patents, both in Korea and in the US that relate to blue OLED materials, particularly those that have a Boron component along with the more typical heavy metal ligand structure that most phosphorescent materials are based on.  By substituting Boron and Nitrogen for Carbon in some of the molecular ring structures, the IP filing states,
“The organometallic compound…may emit blue light having an emission wave-length of about 450nm or greater and less than 490nm.  When the organometallic compound…is included in the emission layer of an organic light-emitting device, formation of an eximer and exiplex with a host may be suppressed.  Accordingly, the colorimetric purity and lifespan of an organic light-emitting device including the organometallic compound may be improved.”
What that means is that by changing the molecular structure of the blue phosphorescent emitter material, some of the pesky ‘byproducts’ of phosphorescence that reduce lifetime can be removed, and while the IP noted here did not give an indication as to the lifetime of such substitutions, the indication was that the blue emitter material’s characteristics improved.  We note that given the 161 pages of potential molecular structures in the SDC IP we reference, the specifics as to whether SDC is just covering its bases by listing almost an infinite number of possible chemical combinations and structures that would help it build a case for an IP lock on any blue phosphorescent organometallic Boron-based material that might come to market, or whether it is purposefully obscuring a specific material structure that it believes would have commercial value, is a question we cannot answer. 
We note that other R&D teams have made many similar broad claims as to improvements in blue phosphorescent material characteristics, although the industry still lacks a commercial blue phosphorescent OLED emitter material.  UDC has given a loose timeline for commercial production in 2024, with industry specs met by the end of this year and TADF material developers have promised a commercial blue as far back as 2020 but have been unable to meet those goals.  That said, Samsung recently purchased Cynora (pvt), one of the few TADF developers that have been working toward the commercialization of a blue OLED emitter with phosphorescent characteristics, but actually only purchased the company’s IP, more likely as a way to cover a broader swath of potential blue material development than it would have had as an investor. 
So as the activity toward a commercial blue material gain momentum, it would seem that Samsung Display is not only using dollars and IP to keep itself in the game, but is also working toward the possibility of an internal development, or one jointly with UDC (the logical choice) or another partner.  UDC’s IP and supply contract with SDC will expire at the end of this year, although it can be renewed for two additional years, and while the terms of the contract are not public, we believe the current contract only covers red and green (and similar derivatives) phosphorescent IP, with blue to be negotiated when necessary.  It would be difficult to disaggregate a change in contract terms between UDC and SDC that would relate to blue IP, but it is something to watch as we head into 2023.
 

​In our note yesterday, we mentioned Samsung Display’s (pvt) potential expansion of its QD/OLED display capacity, both through improvements in process tact time and the eventual conversion of shuttered LCD fab to additional QD/OLED lines.  Some of what we noted was derived from a recent speech made by the CEO of Samsung Display where he made a number of specific references to SDC’s plans for QD/OLED, a technology that SDC is promoting as an alternative to LG Display’s (LPL) WOLED.  The two large panel display technologies are the same in that they are both based on OLED emitters as light sources, but differ in the way that they quantify that light into Red, green, and blue sub-pixels that are necessary for full color displays.
WOLED technology uses a yellow/green (We note that yellow is a combination of green and red in light) phosphorescent OLED emitter combined with a blue fluorescent emitter as its light source.  With all three primary colors represented, the mix produces white light.  The white light is then passed through a color filter, essentially a sheet of red, green, and blue dots of phosphor materials.  The red phosphor dots allow the red component of the white light to pass through, while the green and blue dots do the same, creating an RGB pixel, one of ~8.3m on a 4K display.  While this is a cost effective way of producing an OLED TV display, as each sub-pixel blocks what is theoretically 2/3 of the light, much of the light intensity of the OLED materials is lost at the color filter.
Samsung Display uses a different technology for their QD/OLED displays.  The light source is a blue fluorescent emitter, similar to the type used in the WOLED process, but the color filter phosphors are replaced with red and green quantum dots.  Quantum dots differ from phosphors in that they do not block light, but convert it from one frequency to another, which corresponds to changing the color, so in the SDC system, in theory, the blue light is converted to red and green sub-pixels while the blue light passes through unchanged without filtering out other color components, producing a brighter display.
Both systems has a drawback, and that is they rely on blue phosphorescent emitters, which differ from phosphorescent OLED emitters in that fluorescent emitter are only able to emit 25le to generate 25% of the light that phosphorescent emitter materials can.  The physics behind this issue is complex, but if OLED panel producers had the ability to use a blue phosphorescent emitter they would, other than the fact that they are not commercially available, hence the reliance on the lower output fluorescent blue.  Again, the physics behind why a blue phosphorescent emitter is not available is complex, but leave us to say that the higher energy levels of blue phosphorescent emitters causes them to break down more quickly than red or green, and deep blue phosphorescent emitters do not yet have the lifetime needed for commercial use.
There is an alternative, which is a derivative of fluorescent blue called TADF (Thermally activated delayed fluorescence) which improves the characteristics of generic blue fluorescent emitter materials, but they are still on the cusp of having the characteristics needed for commercial display, which leaves both Samsung Display and LG Display to use fluorescent blue emitters and look for ways to improve output until a blue TADF or phosphorescent OLED emitter can be commercialized.  Universal Display (OLED) and a number of other display material suppliers have been working toward the commercialization of such a material, with UDC expecting product by 2024, along with SDC itself, who has license agreements with UDC.  Samsung recently cited its own developments in the development of a blue platinum-based phosphorescent emitter material but gave no timeline as to its potential commercialization or internal use.
Back to the speech given by Samsung Display’s CEO this week…what caught our attention was the reference he made to changing the blue fluorescent emitter material currently used in the QD/OLED process to a blue phosphorescent ar blue TADF material to increase the light emitting efficiency.  This seems to imply that SDC is considering changing the QD/OLED stack with what would have to be a commercial blue emitter that has been developed by a partner or affiliate, which would be a major step forward in the development of OLED materials.  We expect the production of such a material would be done in outside of Samsung itself, which opens the question up as to whether this material will be exclusive to Samsung or whether it will be made available to other OLED producers.  While the advantage to Samsung would be obvious if the IP is limited, the licensing of said IP would allow the OLED industry to progress further, particularly large panel; OLED devices, and would improve the characteristics of both WOLED and QD/OLED, as well as improving small panel OLED displays by increasing their efficiency and reducing power requirements.  While this was a mention in a longer speech, we see it as carrying significant weight toward the commercialization of a blue phosphorescent material.  Only 494 days to wait to see if the prediction rings true… 

​Recent data concerning the sales of OLED materials in 2Q indicated that the industry saw a sales decline of 2.1% from the previous quarter although up 7.8% y/y.  According to UBI, a local Korean Research firm, the three largest small panel OLED producers saw declines in OLED material purchases in 2@, while OLED material for large panel displays remained roughly flat.  In order to validate that data we matched those changes to small panel OLED shipments in our database in the following table:

​According to UBI LG Display’s OLED material purchases for OLED TV production remained flat q/q in 2Q while Samsung Display’s large panel material purchases were up slightly, although considerably below those of LGD’s considering Samsung Display has limited large panel capacity for its QD/OLED displays.  We note that while sales of OLED materials at Universal Display represent only emitter materials, material sales in 2Q at UDC declined by 9.2%, although shipments to Korea (Samsung and LG) declined by 11.8% and to Customer A & Customer B, assumed to be Samsung and LG, declined by 9.2%, while BOE (Customer C) saw a decline of 6.7% q/q.  Note also that units shipped in the table above include small panel shipments only while material purchase ROC is for both small and large panel OLED displays.
While there are a  number of factors, particularly material inventory levels, that would affect OLED material purchases, the overall impact of what was a progressively more difficult quarter for the overall display space, was less so for the OLED display segment, and while we expect that the 3rd quarter will continue the weakness already seen in July for the LCD space, we expect the impact will again be less for OLED producers, especially in light of the build toward the release of the iPhone 14 series.  If you have to be producing materials for the display space, OLED is still the place to be, at least so far.