​Quantum Dots are almost passe in CE circles, with hundreds of millions of displays using these particles to enhance both LCD and OLED technology.  Originally, quantum dots were used in films that took the light from an LED source (usually blue LEDs) and created a broader color source that passed through liquid crystal and a phosphor-based color filter.  The QDs converted the blue light into other colors (red & green primarily), which added to the color that was generated when the light passed through the red and green dots of the color filter.  Color filters however are subtractive in that a red dot in a color filter allows red to pass through while blocking blue and green, which reduces the overall brightness and forces the set to rely on phosphor formulation for its color purity.  QDs convert colors rather than filter them which means  less total color degradation when QDs are part of the LCD or OLED stack.
Samsung Electronics was and continues to be a strong promoter of QD technology, first because it differentiated Samsung’s display products, and second because they did not have a non-LED TV technology that could compete with LG Display’s (LPL) WOLED TV technology, which has been promoted as having more vibrant colors than typical LCD TVs.    Last year Samsung took QDs a step further and combined them with OLED technology to create QD/OLED displays, that use a combination of blue and green OLED emitter material to generate light, and quantum dots to convert that light into colors, producing an OLED based display that does not use a color filter.  When compared to typical WOLED displays, which use OLED materials to create a white light source but use a phosphor-based color filter to create colors, the QD/OLED display is, in theory, brighter, with the QDs (additive) replacing the phosphors (subtractive).  Samsung Display (pvt) the producer of QD/OLED displays, has a single production fab for this new technology and is in the process of deciding if and when to expand production, but a bit further down the road is another path for quantum dots, and one that has even more implications for the display space.
While QDs are typically stimulated into operation by light, they also have the characteristic of being able to be stimulated by an electrical charge, similar to the way OLED materials generate light.  In this case the QDs are self-emissive or electro-luminescent, and present another alternative to existing and potential EL display technologies, such as micro-LEDs and OLEDs.  That said, as QDs are relatively new to display applications, much work needs to be done to design QD materials and driving circuitry to bring EL QDs to market as a competitive display technology, but given the relatively simple production process for quantum dots and what seems to be a simple stack structure, they are particularly attractive as a potentially disruptive display technology.
Nanosys (pvt), the leader in QD technology, and a licensor to Samsung, privately showed a 6” QD EL display at CES, which, while still in development, is a step toward the commercialization of this technology, with the promise that more information about the technology would be shared in a few months by a yet unnamed manufacturing partner.  Nanosys was careful to point out that true EL-QD commercialization is still a few years out (2025 -2026 at the earliest), but that the demo was a pure QD EL, using no other materials or filters.  Considering that QDs are already being printed in the Samsung QD/OLED process, the production costs for EL QDs, when they are ready for mass production, should be low and applicable to almost any surface, so some of the drawbacks facing other existing and potential display technologies are less of a roadblock to EL-QD commercialization.
All in, while the display and CE industries are not going to change overnight, there are a number of new display technologies vying for the display technology throne and while EL-QDs are still toward the back of the line, recent progress establishes a timeline.  In the display space timelines are more often missed than met, but at least there is a finite goal and a technology that does not have to start from scratch  today.  

​A few days before CES this year Chinese CE brand TCL (000100.CH) indicated that it would be shipping it first QD/OLED TV by the end of this year at a press briefing and in materials available to the press before the show began.  While the technology behind QD/OLED is broad enough that patent protection could likely be relatively easily side-stepped, TCL, or one of its subsidiaries in the display space, most likely Chinastar (pvt) or China Display Optronics (334.HK) would have to build at least a pilot line to produce such a device, with enough capacity to at least place product in conspicuous locations.  Certainly we are not saying that such a pilot line has not been built, but Chinese brands are want to publicize achievements and little has been said about such a development at TCL, although they have made considerable progress in developing Mini-LED technology.
As it turns out, the TCL statements turned out to be a mistake, and the company indicated that such plans were incorrect and its intention is to continue to develop and promote its mini-LED display technology this year, leaving Samsung Display as the sole producer of the technology and Samsung Electronics and Sony (SNE) as the only brands currently offering QD/OLED TVs.  While TCL is best known for their lower priced but higher quality TVs, and being particularly fierce competitor in the mini-LED TV space, it looks like TCL’s marketing guys got a bit carried away pre-CES, and we will have to wait a bit to see how far along TCL is concerning QD/OLED display technology, at least until 2024.
 
 

As we have been doing since May of 2021, we check pricing on Samsung’s (005920.KS) Mini-LED/QD and QD only TVs to map how macro, seasonal, and holidays affect pricing on this category, particularly as it is a relatively new category and one toward the high-end of the TV pricing.  We have also been tracking Samsung’s QD/OLED TV pricing since it appeared in May of this year, an even more distinct product type that only Samsung Display (pvt) is able to produce currently.  While we don’t check prices for all on a regular schedule, we try to work toward specific events or holidays, and with Black Friday only two days away, we thought it helpful to see whether Samsung is being naughty or nice to its high-end TV customers.
2021 Models
As Samsung is slowly disengaging from its 2021 line, no longer offering 2021 8K Mini-LED/QD sets (900A & 800A series) on its website, along with eliminating one of last year’s Mini-LED/QD 4K series (85A) and one quantum dot only series (80A), Samsung has thinned last year’s models, but seems to have little rhyme or reason as to how they are pricing the remaining 2021 Mini-LED/QD 4K line over the last three weeks.  They did cut the price of last year’s massive 98” Mini-LED/QD 4K TV from $15,000 to $13,000 (↓13.3%), which they have only done one other time (during the July 4th holiday) this year, and reduced prices on all but one of last year’s Mini-LED/QD 4K sets, putting 4 of the 5 Mini-LED/QD 4K sets from last year at their lowest price points since their initial release last year.  Samsung lowered prices on 3 of the 13 2021 quantum dot only 4K sets (70A & 60A), putting 5 in that group at their lowest ever price and one (55” 4K QD only) at its highest price.  Overall, on all the remaining Samsung 2021 Mini-LED/QD and QD only sets, prices declined by 3.9% since our last check on 10/31.
2022 Models
Samsung was a bit more aggressive with pricing on this year’s models but seems to have abandon promoting its 8K Mini-LED/QD line (900B & 800B) whose prices have remained flat over the last month.  As we have previously noted, there are issues with 8K sets in Europe starting in March of 2023, data suggests that 8K sets have been poor sellers so far this year, and the macro environment is less conducive to such high-priced models that offer little image improvement give the lack of 8K content, so there seems to be little incentive for Samsung to discount the sets, other than to dump stale inventory in the retail channel. 
That said, Samsung cut prices substantially on high-end Mini-LED/QD sets (95B), with 3 of the 4 in that line dropping by between 20.0% and 44.4% and putting that group down 48.9% from their initial prices set in May.  Samsung also lowered prices between 5.2% and 11.1% on the lower-priced quantum dot only line (60B), leaving most of the remaining lines flat for the period.  On an overall basis, Samsung cut prices across this year’s 8K and 4K Mini-LED/QD and QD only lines by 5.3% for the period, putting the entire 2022 line down 33.8% from initial prices set 224 days ago. 
However Samsung seems to set price declines during the year more in order to reach a specific price point for the holiday season than to stimulate sales for a particular holiday, as model pricing for this year’s line reached the same dollar price point at Black Friday as last year, despite a lower initial price.  This puts the onus on manufacturing to maintain margins by lowering costs at the same rate as set prices reductions.  We expect this was a difficult task this year but not an impossible one, as panel prices declined while semiconductor and other component prices increased early in the year.  That said, component costs are a bit better now, so there is some hope that manufacturing could lower costs enough to maintain margins, but that leaves little wiggle room on prices if Samsung wants to move excess TV set inventory. 
QD/OLED
Samsung’s QD/OLED TV line, which consists of a 65” and a 55” model, continues to see price declines, now down 27.6% from its initial price for the 65” models and a decline of 32.4% for the 55” model, based on Amazon (AMZN) pricing.  As this is the first year such sets are available there is no comparative data, which means Samsung is flying blind with pricing and is competing against Sony (SNE), whose QD/OLED set prices remains at their original list price of $2,499 (55”) and $2,999 (65”).  Samsung seems far more willing to find a price point that consumers find attractive than Sony, and prices for both models on Amazon, as shown in Figure 3, are close to the discounts that Samsung has offered on its company site. 
The QD/OLED TV product comes at a difficult time given the macro concerns that are troubling large economies across the globe, but Samsung seems willing to test its price elasticity despite the weak environment.  Samsung does have a considerable stake in the success of the product considering affiliate Samsung Display has chosen it as their step toward a mass produced OLED TV and eliminated its LCD TV panel production capacity, but the limited production capacity that is currently available to SDC is not enough for parent Samsung to make it a cornerstone of its premium TV line.  This leads to a decision by Samsung as to whether they are willing to commit to QD/OLED and ok the SDC funding to build additional QD/OLED capacity, which needs to be made relatively soon if that capacity is not to miss the 2023 holiday season.  We see the discounting as a necessary step toward enhancing Samsung’s understanding of consumer response to QD/OLED and moving the decision-making process forward.
While this has been a disappointing year for TV set sales, especially against the economic backdrop, we are a bit more optimistic about 2023 in that we expect component pricing to continue to decline and TV panel prices to be more stable than this year.  That said, consumer buying power is declining so it is hard to find an impetus for a demand driven scenario in 2023, but we expect at least a more stable TV market, making it a bit easier for those who need to make billion-dollar decisions about capacity.  We are keeping our expectations low, but the glass seems slightly more full than empty, with the emphasis on slightly.

As we have been tracking TV set pricing for Samsung’s (005930.KS) 8K and 4K Mini-LED/QD and QD only sets since their release in May of last year, along with this year’s models, we can get a good picture as to where Samsung set pricing is relative to premium TV set pricing.
Samsung has eliminated a number of last year’s models from its website, particularly the top-end (900 series) 8K mini-LED/QD sets, (the 85” model had a price of $5,000 on our last check) some 4K mini-LED/QD sets (85A) and some quantum dot only sets (80A).  Most are still available on Amazon (AMZN) and a few other sites, but at much higher prices than where they ended on Samsung’s site.  More importantly, there was relatively little discounting on the remaining 2021 models over the last month or so.
That was not the case with the 2022 models, where discounting heading into November was very heavy.  The six 8K min-LED/QD sets offered this year saw a 15.7% drop over the last 55 days (9/9 to current), the 12 4K mini-LED/QD sets saw a 12.3% decline, and the QD only sets (2022 only) saw an 8.7% decline, while all 4K sets combined saw a 10.7% decline, and the value of the 2022 sets on a price/in2 of surface declined by 39.4% so far this year.
This puts 33 of the 36 sets in the 2022 mini-LED/QD or QD only line at their lowest point this year, with the 3 that are not at their lowest point all being 98” sets that have remained at $15,000 since they were released.  Looking at Figure 1, it is obvious that TV set price reductions have begun earlier this year than last and while this year’s year-end prices might be closer together than current prices would indicate, we expect they will be lower given the economic situation this year. 
With Black Friday only 25 days away, we expect Samsung to continue to offer more aggressive discounts this year to entice customers who are facing a much weaker economic scenario than last year.  The TV space overall has already been facing a difficult year as we have noted in the past, but while brand shipment/production expectations have declined as the year progressed, primarily in the 2nd half, more recent cuts seem to indicate that TV brands have come to a point where they have to choose between reducing prices to gain unit volume or trying to maintain margins on lower unit sales.  Samsung has recently cut its shipment/production expectations by ~12.5%, and given that they are the largest TV set producer globally, we expect they are indicative of what other brands are contemplating.  If we were to apply the same reduction that Samsung recently made and applied it to all of the other brands, the result would be shown in Figure 2 ‘current column.  Note that some brands will not see cuts that large while others will see worse, so the ‘current’ column is an illustration, not an estimate.  We expect actual 4Q results to be modestly better than shown.

LG Electronics (066570.KS) (technically LG Group) owns LG Technology Ventures, the company’s VC arm.  With ~40 investments and $400m in fund assets, the portfolio of early-stage start-ups are chosen in order that they might develop strategic partnerships with other LG companies in a number of strategic areas including advanced materials.  Most recently LGTV made a $2.155m investment in InnoQD (pvt), along with additional investments by Wonik IPS (240810.KS), a well-known Korean supplier of display and semiconductor tools, and local VCs for a total of $4.31m, with an additional ~$1m in progress.  The company had previously raised ~$4m in earlier financings.
InnoQD is a developer and producer of QD materials that specializes in resin development, a material that is mixed with quantum dots it both protects the QD material from exposure to air and water along with barrier films, and holds the quantum dots in place.  One issue that faces quantum dot films is the dispersion of the quantum dots across the display film.  Poorly distributed QDs cause color and light changes where QDs are bunched or thinly dispersed.  By maintaining a highly uniform concentration of QDs across the film, the film can be thinner and have more consistent results across its entire area and by starting the protection of the QDs at the resin level, thinner barrier layers can be used and lifetime extended
InnoQD has purchased a factory and has production equipment on order, with expectations for mass production next year in collaboration with LG Display (LPL) and Nanosys (pvt) as the supplier of the basic QD material.  While LG Display has a strong focus on OLED, parent LG Electronics is broader based with a line of Mini-LED/QD and QD only TVs based on Nanosys QD material.  The investment in InnoQD will hopefully reduce the cost and increase the quality of LG’s QD products and potentially create a path toward the two goals in the quantum dot timeline, full ink-jet QD printing (Samsung Display’s (pvt) QD/OLED is using it) and self-emissive quantum dot displays in the future.

Given that the headlines over the Labor Day weekend were abounding with comments on the discounts available due to overstocked items in the CE space and beyond, and that the shortages and transportation bottlenecks are rapidly ending, we thought it appropriate to check Samsung’s (005930.KS) Mini-LED/QD Tv pricing to see if such discounts were apparent in that TV space.
While it was only 22 days since we last checked prices, it turns out there was a bit more price movement than we might have expected, although we know the inventory situation in the TV space overall entered the period at a higher than normal level.  There was considerable disparity between Samsung’s 2021 TV line[1] and the new 2022 line.  In terms of price movement, only 5 sets in the 2021 line saw a decrease in price, while 25 saw price declines in the 2022 line, indicating in which model years the excess inventory was held.  Further, the average period decline for the 2021 line was -0.5% while the average period decline for the 2022 line was 6.3%. 
More telling is the fact that the average decline from the original release price for the 2021 line was 27.6% while the average price decline from the original price for the 2022 line was 21.8% but the 2021 decline took place over 474 days, while the 2022 decline took place over 146 days, a rate of decline almost twice as fast as last year..   While we hesitate to speculate on where that would put 2022 Mini-LED/QD TV prices by next year, with 17 2022 models at their lowest price since release and only 10 at their lowest out of last year’s line, the trend toward lower Mini-LED/QD and QD only TVs seems set, at least into the holidays.
All in, it seems Samsung is certainly a bit more aggressive as to pricing for its Mini-LED/QD line this year, and with offerings from TCL (000100.CH), LG Electronics (066570.KS), Sony (SNE), Philips (pvt), Konka (000016.CH), Huawei (pvt) and Hisense (600060.CH) either available or announced this year, as opposed to Samsung, TCL, and LG last year, it is not surprising that Samsung is competing a bit more aggressively this year.  To get an idea of the competition and range of prices we put together a list of currently available Mini-LED TVs and prices.  We note that we cannot certify that all models shown have Mini-LED and quantum dots and we not that all models vary as to other features.


[1] Our data includes only Samsung’s Mini-LED/QD and QD Only TV lines and does not include Samsung’s generic LCD TVs.

As we have noted, TV brands have cut orders in order to reduce excessive inventory levels, particularly as inflation reduces consumer demand.  While tracking the price of the hundreds of TV models available to consumers, we have been tracking the pricing of Samsung’s (005930.KS) Mini-LED/QD TV lines both this year and last year in order to see how Samsung reacts to seasonality, macro events, and inventory management.  As the TV sets in this line encompass prices ranging from $15,000 to $450, it gives an indication as to the general tone of premium to mid-range TV pricing.  While we don’t check pricing on a set schedule, as holidays and events play an important part in TV pricing, most of the intervals are between 3 and 4 weeks so charts look relatively normal, and our data today is just over 1 month from our last check.
Discounting to move inventory was not Samsung’s theme over the last month, as on an overall basis prices on all 2022 Mini-LED/QD and QD only models increased by 1.8%, while 2021 models saw a 2.0% increase.  2022 8K models saw an unusual price increase of 7.0%, after a drop to their lowest price point last month, while last year’s 8K models saw little change.  2022 4K Mini/QD models saw a 3.0% price increase with 2021 models jumping 5.7% and this year’s QD only sets saw a 2.1% price decrease (the only category that saw a decrease), while last year’s QD only sets saw a small (0.2%) price increase.  8 of this year’s models were at their lowest price of the year while 2 were at their highest, while 16 of last year’s models were at their lowest price and 4 at their highest.
All in, we expect Samsung was more concerned with margins than moving inventory during the last few weeks, albeit contrary to expectations, and pushed prices back up to previous levels after a short July 4 discounting period.  Figure 1 shows the four general categories across the line and how 2021 and 2022 pricing has changed, while Figure 2 shifts the 2022 models back in time to compare new model price changes to the same time period last year, which shows how 2022 model pricing has progressed relative to last year.  We note that 2022 4K Mini-LED/QD pricing includes 4 models that did not exist in the 2021 line, making average set pricing higher this year although the price pattern is similar.

​About a year ago we noted that there were rumors that quantum dot leader Nanosys (pvt) was rumored to be in talks with a SPAC firm in order to bring the company public.  Those rumors died down, particularly as the SPAC market slowed and while we had our doubts about the story in the first place given Nanosys’s investor list, which includes Samsung (005930.KS), BOE (200725.CH), and LG Display (LPL) giving them both considerable technology credibility and financial access, we note that the company has just announced the completion of a $50m financing round with new investors Fortress Investment Group 9984.JP), Centerbridge Partners (pvt), and Kilonova Capital (pvt). 
While we miss the opportunity to get detail on Nanosys’s financials, we believe a private financing was certainly more beneficial to the company’s timelines and goals than a SPAC IPO would have been, especially to the growth of the company’s quantum dot business, both as it relates to extending the life of LCD technology and its application in the micro-LED space and the potential for self-emitting quantum dot displays.  Quantum dots seem to be a solution that solves some of the complexities surrounding a number of RGB self-emitting materials and systems, which gives the technology sustainability across all of the current display technologies and those being developed over the next few years and should provide ample room for R&D and product expansion for Nanosys with the additional financing, along with the potential for quantum dots themselves as a self-emitting material.

​The headlines in a South Korean tech paper indicated that a research firm had discovered that Samsung Electronics (005930.KS) was selling its 65” QD/OLED TV (S95B) at a price $200 below that of its main competitor LG Electronics (066590.KS) 65” W-OLED TV (Model G2), which would imply Samsung is willing to keep this new technology priced as a direct alternative to LG’s OLED TV products, regardless of how LG prices its comparative products.  With the original 65” QD/OLED price of $3,000, Samsung has already reduced the price, which remains at $2,600 on their website and within a few dollars of that more major retailers.  That said, we did find one on-line vendor that was offering the unit for an unusually low price of $2,049 out of Hollywood, Florida, although neither sales nor support lines seem to be working.
While we do expect that Samsung will try to remain competitive with LG’s OLED TV offerings with LG’s G2 series priced at $1,999 (55”) and $2,599 (65”), we were unable to find the offer mentioned in the trade press, although we expect there will be a few ‘door buster’ type sales over the next few months that might get the price a bit below the LG range, but we expect Samsung has built-in some substantial controls as to how the QD/OLED TVs are priced in order not to create unfair competition between vendors.  We believe it is frowned upon for brands to officially lock retailers into a price but we know of a number of instances where large brands have castigated those who beak the ‘suggested’ price points.  We do expect that Samsung will have some room to lower QD/OLED prices as it improves yield, and we would expect the company is still experimenting with how it is going to present the new technology from a pricing standpoint, so there might be a point where Samsung is willing to sell for little or no margin to make sure it sells out the targeted number of units before year end.  We are still watching…

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…