​As we have noted, Samsung Electronics announced its QD/OLED TV line in March and began taking pre-orders in north America and a number of European countries, with regular sales beginning in April in the US and May for Europe.  Samsung is now expanding sales of the QD/OLED TVs to Singapore, Australia, and New Zealand, with the UAE, Brazil and other Central and South American countries in 3Q, and the rest of Europe by the end of the year.  The QD/OLED sets remain excluded from the Korean market, Samsung’s home territory.  We expect that supplies are still limited, despite the improvement in Samsung Display’s (pvt) QD/OLED yield rate and that Samsung’s heavy marketing of its QD/Mini-LED TV line as its premium TV offering would conflict with the idea of an OLED based TV, which Samsung has not offered and has denigrated in the past.
In our 4/18/22 note we estimated Samsung Display’s unyielded and yielded production for 2022, which we believe will fall to less than the general consensus of just over 1m units.  As this is a small percentage of the ~40m to 50m units Samsung typically sells each year, the marketing conflict remains a difficult one until a decision is made as to whether Samsung Display will expand QD/OLED capacity, which we expect is being decided currently.  While we could take the expansion of sales coverage as a sign that such a decision has been made, we hesitate to make such an assumption as the glass half-empty view would be that current sales have not been high enough to account for the potential production this year.  We ascribe to neither view at this point as shipments for the QD/OLED models have only been in place for a relatively short time, giving limited data to Samsung, especially during a period when TV set demand has been under pressure.  Given the potential investment involved in expanding SDC’s QD/OLED capacity, we expect the decision might be postponed until the end of 3Q or possibly to the end of the year.

There are no shortages of comments on Samsung Display’s (pvt) newest display technology QD/OLED.  We have mentioned it innumerable times and most recently there has been talk of a 2nd generational QD/OLED product that is being worked on that will reduce the thickness of the original QD/OLED display. (The 55” TV produced by Samsung (005930.KS) using the original QD/OLED display technology is 1.6” thick).  There has been some controversy as to some of the characteristics of the QD/Display, which is used in a Sony (SNE) TV and an Alienware (DELL) monitor, but the general feeling is that the display technology, especially in its first iteration, is a step up for OLED and display technology generally and is a viable contender against LG Display’s (LPL) WOLED TV technology.
Potential technical issues aside, which will likely be addressed by SDC in the second or third generation product, parent Samsung Electronics has been supportive concerning the new product offering but has been a bit hesitant on the prospects for the technology during its development and early production.  It was surprising to see that Sony was first to announce the availability of the technology in its TV line (shipping expected next month) but Samsung is now offering almost immediate delivery (1 day) through Best Buy (BBY) and is said to be scheduled to receive .5m QD/OLED panels from SDC this year.  While that is a small number of units compared to Samsung ~50m units shipped last year, it would reflect more the early production stage of the technology and Samsung’s lack of information as to how the new technology will be accepted by consumers.
That said, Samsung Display, who will be the sole source of QD/OLED displays to Samsung, Sony, and Dell, must also be realistic as to how many panels they are able to produce this year, and we look at the most important characteristic of panel production, yield, to give an estimate of the number of panels SDC will be able to produce.  As the SDC QD/OLED fab is configured as a Gen 8.5 15,000 sheet/month line, we have to make a few assumptions before walking through the actual estimates.  First, we assume that the fab was built to accommodate MMG (Multi-mode glass), which allows the lines to mix different size panels on the same Gen 8.5 substrate, however most Gen 8.5 OLED lines process a half sheet at a time.  Using MMG would make it impossible to process a half sheet because of the configuration (3 65” & 2 55” panels/sheet or 3 65” panels & 3 34” panels/sheet), so we did calculations for both MMG and non-MMG configurations.  
We also have to make some assumptions as to how many of each panel size Samsung Display is producing[1], which would be based on consumer demand, which is still an unknown, however we build in a roughly two to one ratio for 65”/55” as the price differential between the two is ~35% and the screen size of the 65” model is ~40% larger, with roughly 15% of production going toward the 34” (monitor) size. 
The most important metric in the calculations is yield, as QD/OLED is a new technology and has a number of process steps that are different than typical OLED display production.  Typically yields are quite low when production begins as tools need to be tuned to mass production levels, however it has been rumored that SDC was having trouble with yield and had been moving into mass production with yields in the 50% range.  We expect this was a reason for parent Samsung Electronics’ reticence about promoting the technology late last year, however a recent internal memo from SDC management to employees indicated that yields are now 75% with a target (timeframe?) of 90%+.  It is rare for any company to publish actual production yield, especially for a new product, but it seems that SDC wanted to encourage the fab staff to have an optimistic view of the potential for the product and the prospects for their continued employment on the project.  This gives us some clarity as to where the production yields are currently, which we build into our model below.  As noted, while we are less sanguine about the use of MMG at this fab, we present both MMG based and non-MMG based estimates.


[1] Available to SCMR LLC clients.

​Based on our estimates Samsung Electronics will take ~85% of SDC’s QD/OLED TV panel production this year, with the remainder going to Sony.  As part of SDC’s 2022 QD/OLED production we expect ~110,000 monitor panels to be produced, but we expect there is some flexibility in that figure.  If SDC were to lower the percentage of capacity dedicated to monitor panels, it would lower the total number of panels produced, but increase the number of 55" and”65”, which would boost the number of TV panels it could offer to Sony.  That said, for SDC to be ultimately successful with its QD/OLED project, the company will have to build new capacity to increase production, which would likely take a year if they were to build in an existing location.  In order to meet the 2023 holiday season they would have to make such a decision by mid-year 2022, which would leave little time for Samsung and Sony to evaluate consumer reaction to the product, which puts SDC in the unenviable position of having to make that decision with relatively little customer data. 
If they decide to expand, equipment suppliers will be pressed to also meet such deadlines, which can complicate such timelines.  All in, QD/OLED, or at least Samsung Display’s version of the technology is just beginning to emerge but there is little time to make educated decisions as to expansion plans or SDC will be limited to current production levels until 2024.  While this would certainly give the technology a chance to mature a bit, other display technologies will also improve and QD/OLED will face a stronger challenge from competitive TV display technologies.  Decisions, decisions… 

Samsung Display’s (pvt) new QD/OLED process for display production is already under fire as a German Magazine has indicated that there is a ‘defect’ that can be seen in the Alienware (DELL)  AW34 monitor display that is the first such monitor to use the new technology.  What is shown below is a thin stripe or fringe of discoloration that appears.  The magazine alleges that the problem is caused by the unusual pixel arrangement used by the QD/OLED display, which has a triangular arrangement of sub-pixels with a green pixel at the top of the triangle and a red and blue sub-pixel at the bottom.  This pattern is said to create more of a ‘fringe’ effect than a square arrangement where the sub-pixels are narrower and allow the eye to combine them more easily and there is less ‘black space’ between the sub-pixels.
Given that there has been no lack of comments about the problem from social media, the issue is certainly subjective, as some find it noticeable enough to be considered a flaw, while others barely notice the issue.  Samsung Display tacitly acknowledged the problem by responding to questions about the sub-pixel configuration as follows, and while some of the response is typical corporate jargon, we expect the speculation to continue until a more definitive review of the issue can be made by less subjective sources, such as Displaymate, who we consider to be the definitive source for display comparison and measurement.
"It is not a typical RGB stripe pixel – but our proprietary structure optimized to enhance the core user experience of color and HDR. We selected this new pixel structure in order to optimize optical characteristics of QD-Display like brightness, color gamut and durability. Each pixel of QD-Display has an individual Red, Green and Blue – 3 primary sub pixels.  Unlike Pentile sub-pixel structure that share the adjacent sub-pixel and compromise on detail and accuracy, QD-Display has 3 (R,G,B) x (3440*1440) sub-pixels. So, QD display does not compromise on the detail and accuracy.  The artifact pointed out also can be seen on conventional LCD and OLED displays using RGB stripe. Similar phenomenon is observed on the sides (Left and Right) side when displaying bright high contrast edge on conventional display products.  Displays with better contrast modulation performance and wider color gamut and greater contrast ratio will accentuate this artifact. Because QD-Display has the widest color gamut, superior contrast ratio and new sub pixel structure, this artifact could be visible."
 
All in, as with any new display technology, there will be issues and subsequent refinements that will help to give consumers the confidence needed to mainstream the product.  In recent CE history, problems with the first foldable smartphones were addressed and rectified by the 2nd generation and the issues mentioned above would more likely be addressed with software, usually an easier fix than hardware.  We have relatively low expectations for QD/OLED this year and expect that Samsung Display has been working to reduce this and other issues that might have seen during qualification trials, so we expect that a fix for this ‘fringe’ issue will be built into the production process for any QD/OLED displays that SDC will be producing later this year, and we note that this issue aside, the reviews concerning the QD/OLED display’s other characteristics have been extremely positive.

Samsung Electronics (005930.KS) has announced pricing for its Quantum Dot/OLED TV models, which are in pre-order mode.  While not all of Samsung’s 2022 TV line pricing has been revealed, the two sets are to be priced at $2,400 for the 55” model and $3,500 for the 65” model, which puts them at the top of Samsung’s 4K TV line in those sizes.  As both are 4K models, they would compare to Samsun’s Mini-LED/QD 90B series (2022) which sell for $2,600 and $1,900 respectively, putting the QD/OLED sets 34.6% and 26.3% more expensive than their closest sets in Samsung’s 2022 YV line.  When compared to LG Electronics’ 4K OLED TV lines (2021 models), using their most expensive models, the Samsung QD/OLED sets are 52.2% and 50.0% more expensive than the OLED sets.  While these are prices set by Samsung on its website, Amazon (AMZN) is offering the 55” model (no delivery date) for $2,197 to Prime™ members with an April 11 release date and delivery between April 15 and April 18.
The table compares Samsung’s QD/OLED TV pricing against similar Samsung Mini-LED/QD TVs, Samsung QD only TVs, and the most and least expensive LG OLED TVs.  We note that LG OLED TV pricing is based on 2021 models.  We note also that there has been some question as to the actual pricing for Samsung’s S95B models as some Samsung representative s are quoting a ‘corrected’ price of $2,200 for the 55” and $3,000 for the 65”.  While this might ultimately prove correct given the Amazon price mentioned above, the official prices on Samsung’s webstore are used below.

​According to Korean trade press Sony (SNE) will be releasing the first commercial TV sets using Samsung Display’s (pvt) QD/OLED technology in June.  The Bravia A95K will come in 55” and 65” models and is expected to sell for $3,000 and $4,000 respectively.  This is a bit unusual in that SDC parent Samsung Electronics (005930.KS) would be thought to have 1st mover advantage with a new technology developed by its affiliate, but there has been considerable back-and-forth between the two over the technology, with Samsung Electronics allegedly delaying the initial release in May, but postponing that date over disagreements concerning panel price and panel allocation. 
The price of the two models, should these numbers prove true, would put the sets at the top of the premium OLED list, at least for 4K TV sets, as pricing for 2022 models from a number of brands have not yet been revealed.  As a new technology, or a new production process, one would expect a price considerably above existing premium TV sets, with both novelty and the high cost of production and low yields the general culprits, and by no means is this an inexpensive TV set.  However, while the process is different from producing WOLED and involves production steps that are new or less typical and therefore require more specialized equipment and more rigorous testing, the price is not unreasonable in our opinion.
While we cannot directly compare other display technologies to QD/OLED until production models are available and evaluated by display testing specialists such as Displaymate, or Rtings, we do note that the price of Samsung’s initial Mini-LED/QD 65” TV model released last May (65” 900A 4K) has declined 26.9% from its original price in less than a year.  Mini-LED/QD technology is considerably different than QD/OLED technology and is based on processes that are more mature, so we would look at such price reductions as a stretch for QD/OLED in its first year, especially as competition will be quite limited and the display single sourced, but a $4,000 starting point is certainly within the realm of retail customer budgets.

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.

​As we noted yesterday, the announcement of Sony’s (SNE) adoption of Samsung Display’s (pvt) QD/OLED TV panels, a positive for the technology, and the ‘non-announcement’ of same from SDC’s parent Samsung Electronics (005930.KS) was a bit confounding, given the close relationship between the two.  The lack of such an announcement from Samsung prompted questions being posed to the head of Samsung’s DX division at presentations last night, which resulted in a statement that shed some light on the question.  Simply put, it was stated that the quantity of QD/OLED displays available to Samsung was not enough for the company to make such an announcement, meaning that SDC’s yield still remains low, not an unusual circumstance for a new display technology, and something we mentioned as a possibility in a number of previous notes on QD/OLED.  “It (QD/OLED set) will be revealed when the quantity is secured, “was the summary statement.
A bit more confusing was a statement concerning the rumored purchase of regular (WOLED) OLED TV panels from LG Display (LPL) by Samsung to fill out their TV line this year.  Samsung stated that “We are reviewing the possibility”, leaving the deal open to continuing negotiations, but was viewed by some as a denial when paired with the comments on QD/.OLED.   While price has been mentioned as a stumbling block to the negotiations between the two competitors, we expect SDC’s yield improvement timeline is really the gating factor, as Samsung wants to fill the OLED TV set gap with something this year.  If SDC is able to deliver volume, there would be little need for Samsung to purchase LG’s OLED panels, unless they use them for a low-tier OLED TV product and the QD/OLED for the premium OLED offering.  The head of LG Electronics (066570.KS) stated that the company would ‘welcome’ Samsung’s entry into the OLED TV market under the idea that it would serve to expand the OLED TV ecosystem, although LG would ‘maintain its superiority’ even with the new competition…

Over the last few years quantum dots have become a significant part of display infrastructure and have been one of two factors that have led to the ability of LCD technology to extend its dominance over newer display modes.  The addition of quantum dots to LCD displays, particularly in the TV space, has increased specifications for such displays, at a relatively low cost both from a product and manufacturing standpoint, and has given display brands a new product tier and substantial product differentiation. 
That said, we are in unparalleled times in the display industry, with a number of new display technologies surfacing that are all vying for a dominant place in the display world.  Mini-LED based displays, essentially a typical LCD display with an LED backlight on steroids, is the ‘other’ of the two technologies that has extended the life of LCD technology by improving this older technology’s contrast (The difference between pure black and pure white), a weakness that makes LCD technology less comparable to newer self-emitting technologies such as OLED.  
OLED has gone from a novelty in 2013 to the mainstay of small panel displays and while still a niche product in the TV space (<5% of total TV unit volume), it is a key technology in the lucrative premium display market.  As a self-emissive display mode, RGB OLED allows for ultimate control over each sub-pixel, generating almost infinite contrast, but large panel OLED displays are subject to two basic limitations, the first being an inability to manufacture TV size RGB OLED displays, and second, limitations on the brightness of the display.  OLED TVs use a combination of yellow/green and blue OLED emitters to create a white light that is made up of red, green, and blue light components, but in order to create the three colors necessary for an RGB display that white light must pass through a color filter, essentially a sheet of red, green, and blue dots.  Each dot will filter out two colors (for example a ‘blue’ dot will filter out red and green, while a red dot will filter out blue and green) which reduces the amount of light that is generated by the device.
OLED materials continue to improve and improvements in light extraction materials can also help to increase WOLED light output, but Samsung Display (pvt), the leader in small panel OLED, has been developing another approach that combines the properties of self-emitting OLED materials and those of quantum dots.  Yesterday Sony (SNE) announced that it would be releasing a 4K TV (Bravia XR A95K) later this year that is based on a QD/OLED panel produced by SDC, however while this is a major step for SDC, missing from the show was an announcement from parent Samsung Electronics (005930.KS) that it would also be releasing a QD/OLED TV.  While we expect that this omission was more of a tactical issue than a technology related one, Samsung’s approval and purchase of such panels are an absolute necessity for SDC, who must make the decision as to whether to expand QD/OLED production, which is currently capped at a maximum of 30,000 sheets/month. 
Without this additional potential demand SDC has little or no large panel TV display product, leaving Samsung Electronics to buy all of its TV panels from competitors and leaving SDC only able to compete in the small panel market, but Samsung Electronics must also consider where a QD/OLED TV might fit into their TV line , which already consists of pure LCD TVs at the low end, quantum dot enhanced LCD TVs at the mid-tier, quantum dot LCD+Mini-LED TVs at the top tier, and Micro-LED TVs at the ultra-high premium level. 
Rumors that Samsung is considering buying WOLED panels from LG Display (LPL) add another potential TV price class, so QD/OLED must find a place in what is a rather complex TV line-up at Samsung, and the marketing of each category is carefully considered by Samsung, who is the leader in the TV set space.  We expect Samsung Electronics to offer one or both OLED types, potentially using WOLED as a low-end OLED offering and QD/OLED as a high end OLED offering, but much will depend on SDC’s ability to keep the cost of QD/OLED panels in a range that allows Samsung these options, and with true mass production just beginning, it is likely that the focus at SDC is resolving potential yield issues rather than refining production costs.  Given the number of moving parts in such product decisions, while we were a bit surprised that Samsung did not make a specific announcement, we expect it will happen this year.
 

​As the release of Samsung’s (005930.KS) Quantum Dot/OLED TV nears (likely at CES in January), Samsung Display (pvt) has released a promo slide show extolling the virtues of the technology, albeit mostly a simple comparison against LCD technology.  Since the promo was in Korean, we translated the 10 slides and put them in a PowerPoint below.

The CEO of Samsung Display (pvt) spent some time with the company’s executives and employees discussing the company’s achievements and future plans, during which he gave some specifics as to the status of the company’s QD/OLED display project.  He indicated that mass production was to begin at the end of this month, with 55” and 65” displays, but also a 34” monitor, which was a bit unexpected. Since the production fab is a Gen 8.5 line, 55” panels are quite efficiently produced, while 65” panels less so, but the fab is said to be using an MMG process, which allows for different size panels to be produced from a single Gen 8.5 substrate.  The 34” panel size would increase the efficiency of the less efficient panel size production.
Yield, at the initial production point was ~33%, which is to be expected given both the process and the fab are new.  The utilization is expected to increase as production ramps, which should increase yield in the short term according to the company.  The fab, which is Asan, South Korea, has a maximum capacity of 30,000 sheets/month when running at full utilization.  As we have noted previously, Samsung is expected to show at least a prototype at CES 2022 in January, although no formal release date for the actual product has been set.  SDC has been sampling product to parent Samsung Electronics, and to Sony (SNE), both of whom are expected to release QD/OLED product in 2022.