The US International Trade Commission has opened an investigation into claims by Samsung Display (pvt) that alleges a number of device repair companies have been importing OLED displays and components into the US that infringe on four SDC patents.  While there is still relatively little documentation, as the case has yet to be made before an administrative law judge, the concept seems to be that some of the OLED displays being used by the repair companies listed below, violate SDC’s patents, and while it is unclear who produces the OLED displays in question, it is thought that the target of the SDC complaint is China’s BOIE (200725.CH), who has been supplying OLD displays for the repair of the iPhone 12 and 12 Pro, along with some that have made it into Samsung’s Galaxy S Series phones when repaired.
The complaint asks for a General Exclusion Order and a Cease & Desist, with the exclusion order being  a more general ban on the companies indicated and any companies that ‘show similar behavior’, to avoid companies bypassing current trade routes that are monitored, and finding other companies that will help them import the affected items.  BOE has been said to sell displays that do not qualify as primary grade to companies that perform display repairs on a number of products, and with the more flexible repair rules that have become available for Apple products, Samsung Display seems to be looking keep repair shops from replacing Samsung Display screens with those from BOE.
While this could have implications for BOE and potentially raise the cost of repairs, the ITC also considers the impact on the general public and even if the alleged violation proves to be true, it is up to the ITC to determine whether an outright ban would be in the interests of the public, as opposed to the financial benefit of SDC.  The defendants will cite consumer’s rights to repair a device any way they choose, but the typical patent infringement suit would normally take 24 to 36 months before a judgement is obtained, while the ITC usually takes a year to 18 months for such decisions.  Once a decision is made by the ALJ, it goes to the President to be approved, at which point an appeal can be filed in the Federal Court of Appeals, but if the President rejects the decision, neither party can appeal.

• Apt-Ability, LLC d/b/a MobileSentrix of Chantilly, VA; 
• Mobile Defenders, LLC of Caledonia, MI; 
• Injured Gadgets, LLC of Norcross, GA; 
• Group Vertical, LLC of Grand Rapids, MI; 
• Electronics Universe, Inc. d/b/a Fixez.com of Las Vegas, NV; 
• Electronics Universe, Inc. d/b/a Repairs Universe, LLC of Las Vegas, NV; 
• LCTech International Inc. d/b/a SEGMobile.com of City of Industry, CA; 
• Sourcely Plus LLC of Tempe, AZ; 
• eTech Parts Plus, LLC of Southlake, TX; 
• Parts4Cells, Inc. of Houston, TX; 
• Wholesale Gadget Parts, Inc. of Bixby, OK; 
• Captain Mobile Parts Inc.of Dallas, TX; 
• DFW Imports LLC d/b/a DFW Cellphone and Parts of Dallas, TX; 
• Phone LCD Parts LLC of Wayne, NJ; 
• Parts4LCDof Wayne of NJ; 
• Mengtor Inc. of El Monte, CA; and
• Gadgetfix Corp. of Irvine, CA.

Samsung had some trouble pricing its inityial release of its quantum dot/OLED TV last year, originally listing the 55” and 65” models at $$2,400 and $3,500 respectively, prior to their April release, however the final pricing at release was lower for both, at $2,200 and $3,000, indicating the companywas still trying to best realize the most attractive price points, both from a profit perspective and from the consumer’s perspective.  As the QD/OLED concept was new for consumers it was up to Samsung to establish a point where these new sets could be placed in their TV line-up, but at the time Samsung Display (pvt), Samsung’s display affiliate, was having problems producing the  displays, with yields below 50%, and with Samsung Electronics targeting between 45m and 50m sets to be shipped for the year, such low yields meant that Samsung would have little reason to market sets that had such a small impact on the overall TV line.
Samsung Display, knowing without the support of its parent, having only Sony (SNE) as a 2nd customer for the TV panels, pushed its manufacturing lines to solve the yield problems, which began to see improvement around mid-year.  With yields improving, Samsung could justify the QD/OLED product line, and while it was still a small part of the entire Samsung TV line, the volumes were increasing at SDC and the potential for the QD/OLED line was finally acknowledged.
The problem however was that the combination of Samsung’s lack of marketing, weak overall TV set sales, and worsening TV panel pricing, left the QD/OLED sets in a netherworld, unrecognized by consumers, despite very favorable technical reviews.  Samsung seemed to recognize that they had a choice between a massive advertising campaign and setting a more attractive price point, and given the fact that even with the improving yields SDC had relatively limited display production capacity compared to other TV set modalities, the latter was chosen and the price of the sets was reduced.
While the price on Samsung’s website for both sets did change, the price on Amazon (AMZN), particularly those from 3rd party sellers, was much more telling and makes obvious the price point at which the sets became attractiuve to consumers, as shown in Figure 5.  While some of that volume can be attributed to improving yield at SDC, it seems that by October the price points (~$1,500 for the 55” sets & ~$1,890 for the 65” sets) had been reached and sales improved significantly,  We note also that during the earlier part of the year, Sony’s share was increasing and in September both Samsung and Sony had equal shipment share, but while Samsung continued to search for a more compatable price point, Sony did little to change the price of their QD/OLED sets, and share declined rapidly, hitting a low of 11.3% in November. 
We expect Sony’s purchase targets from SDC were set early in the year and the improvememnt in SDC’s yield did little to change that, with Samsung Electronics getting the bulk of the increasing shipments, but the chart makes it convincing that such a steep increase in QD/OLED shipments was directly influenced by the price, especially as it leveled off when the increases occurred.  3rd party pricing on Amazon does not always reflect list or discounted pricing om brand sites, but it seems a better indicator than Samsung’s own ‘brand’ pricing, which did decline from the initial $2,200 & $3,000 to $1,500 and $2,000 during the holidays last year (up slightly since), so even with the vaguries of 3rd party pricing on Amazon, it seems obvious that Samsung found the price point it needed for the QD/OLED sets to compete with other TV set brands.
The question remains however, wher=ther the relatively small number of QD/OLED displays that can be produced by SDC will be enough for parent Samsung to truly support the technology as a viable part of its TV product line.  Samsung has indicated that it will also be producing a 77” QD/OLED model this year, which is a size format that can be shared with 49”/50” displays cut from a single sheet, so we would expect to se additional QD/OLED panel sizes later this year, but most important would be the OK from both SDC and Samsung Electronics concerning the expansion of caapcity for the QD/OLED process, and that is a hard decision to be making during the weakest part of the yearly CE cycle.  Hopefully that decision has already been made and suppliers contacted if such capacity could be put on this year, but until SDC makes such a commitment, QD/OLED will remain a small part of Samsung’s TV set line.

As PR heats up for the upcoming CES show (Jan. 5), Samsung Display (pvt) will show a demo of a hybrid foldable/slideable display device to potential customers.  The display which looks like a smartphone with an 8” diagonal (assuming a 9:16 aspect ratio), which would have ~27.8 in2 of display space, and could unfold to a 10” diagonal, which would increase the display space to ~50 in2, and then would be able to slide a rolled up display to give a diagonal of 12.5”, which would give ~72.2 in2 of display space.  The display will be capable of expanding from smartphone size to that of a tablet and to laptop size, or a ~264% increase in area by our calculations. 
 
While there is no assurance that such a display will be used in a device in the near future, Samsung Electronics (005930.KS) has indicated that it will be expanding its foldable line in 2023 and 2024 to include new formats.  The only difficulty we foresee with such a consumer device would be product placement as it could be construed as a replacement for all three current devices, and could cannibalize existing or future individual category device sales.  That said, a device such as this, especially a 2nd generation device where inevitable initial issues could be addressed, would be a big step forward for the mobile CE space.
 

As we mentioned in our12-05-22 note, Samsung Electronics (005930.KS) has been conspicuously absent from the AR/VR world and seems to be looking toward the necessity for an application that would drive consumers into the space before making a major step into the AR/VR hardware business.  That said, Samsung has been developing and to a lesser degree marketing, Micro-LED technology, which is the use of very small LEDs as display emitting sources.  While Micro-LED technology is thought to be the ultimate replacement for LCD and even OLED display technology years down the road, it is currently a work in progress, and still faces some major issues that limit its use and maintain a high cost.  While that development will continue, Samsung Display (pvt) is taking its expertise in OLED display technology and moving toward another display venue.
SDC is beginning to take steps toward the mass production of Micro-OLED displays.  Micro-OLED displays use existing OLED technology, that of phosphorescent and fluorescent emitter materials, but with unusually small pixels that are densely packed in a small space..  There are theoretically two ways in which Micro-OLEDs can be used, the first being with an OLED emitter (or combination of emitters) that produces a single color and is then passed through a color filter that breaks the light into red, green, and blue components, similar to the way and OLED TV works.  The second is a using three OLED emitters (RGB) that are individually controllable and therefore do not need a color filter, similar to the way a smartphone OLED display works.  What makes these displays different from typical OLED displays is that they are built on silicon substrates, where larger OLED displays tend to be built on glass or flexible polymer plastics.
The OLED/Color filter path for Micro-OLED is being championed by Sony (SNE), who produces such displays for camera electronic viewer, HUDs, and AR/VR devices.  The display shown below measures 0.64” (Diagonal) and has 3,145,728 pixels squeezed into a display that is 0.512” x 0.384”, representing ~4,000 pixels/inch, with each pixel being spaced 0.0064mm apart (on center).  While this might sound like overkill, in a VR application the display is almost touching your eye, so if the pixels were not so closely spaced, the user would see gaps between the pixels, creating what is called the ‘screen-door’ effect

The problem is however, that using a color filter to create colors means that much of the light energy is eliminated, either reflected away from the user or absorbed, reducing the overall brightness of each color and the overall display, so Samsung Display, the global leader in RGB OLED displays for smartphones, is looking toward creating RGB Micro-OL:ED displays that contain a red, green, and blue sub-pixel within each pixel, and therefore does not need a color filter.  As can be expected however, these sub-pixels must all fit within the space of a pixel, which makes their deposition even more difficult and precise than that of the OLED/Color filter process.  It seems that while Samsung Electronics is still trying to find a key that will unlock consumer interest in AR/VR, Samsung Display, an affiliate, is thought to be taking the Micro-OLED concept a bit further.  

​Samsung Display is said to be developing a Micro-LED pilot line at its A2 display fab in Asan, Korea.  According to local sources, the company has ordered panel logistics systems from SFA (036540.KS) and glass encapsulation tools from AP Systems (054620.KS) for the pilot line that is expected to go into limited production toward the middle of 2023.  If successful, SDC will allocate funding for the construction of a small mass production line in 2024 that would be built to handle 6,400 sheets/month at the onset.  While we do not yet know the details of the intended product line, we expect the ultimate objective is to produce an RGB Micro-OLED display that will be used in commercial AR/VR applications, likely by Samsung itself, or sold to other customers, and with Apple (AAPL) expected to release an AR/VR device in 2023 or 2024, SDC is looking to develop a high volume mass production line that will feed the Apple AR/VR supply chain, especially given that Sony is expected to be the supplier for the initial Apple AR/VR product.
We note that creating OLED Micro-displays using the OLED/CF process is difficult, but the process of placing three separate OLED emitters in each pixel makes the RGB Micro-OLED process even more difficult, and SDC will face a number of challenges for which it must find solutions that can be scaled to mass production if these displays are ever to be within the cost demands of high volume consumer devices.  There are only a few manufacturers that can produce OLED Micro-displays, a number of which are large enough to be recognized by investors, such as China’s BOE (200725.CH), E-Magin (EMAN) and Sony, however others are far less recognizable, especially those based in China, such as SeeYa (pvt) in Hefei, Sidtek (pvt) in Wuhu City, Olightek (pvt) in Kunming, and Microoled (pvt) in Grenoble, all of whom have at least some product in the market. 
That said, this is still an evolving product segment and is driven on the technology side by higher resolution, higher brightness near-eye display improvements, leading to headsets and devices that are less bulky and cause less fatigue and stress.  But while the near-eye display industry continues to develop, and the two biggest CE players have not yet participated, the need for application driven demand is the industry’s major growth stumbling block.  Gaming is certainly a driver for the VR space and continues to evolve, but the metaphor of the ‘metaverse’, Meta’s (FB) hope for the future, is not enough to drive the high volumes needed for major CE companies to enter the market.  Meta has been on a costly quest to convince the world that the metaverse is other than a way to sell you something and collect user information but lacks a real application driver to attract consumers.  We expect the technology side of AR/VR displays to develop more rapidly in 2023 and 2024 but the application space will be the true driver for pushing AR/VR more quickly into the CE space.  Without application drivers, we expect the overall development of AR/VR to progress relatively slowly, likely falling behind expectations.

​We have mentioned that Samsung Display has been developing a vertically oriented OLED Gen 8 deposition tool with Ulvac (6728.JP) on which it hopes to produce IT OLED displays.  The concept of a vertical deposition tool is one that has been suggested as a way to avoid the issues surrounding the use of fine metal masks that create sub-pixel patterns as OLED materials are deposited on substrates.  While the metals used for the masks are extremely rigid, as the masks get larger they tend to sag which disrupts the deposition process and causes low yields.  The industry is currently limited to Gen 6 substrates and processes only a half or a quarter of the sheet at a time to avoid the sagging issue, which increases costs and process time.  The idea of a larger (Gen 8+) deposition tool that operated vertically instead of horizontally, would keep gravity from working toward sagging the larger mask.
 
Given that this development was being done in order to improve the yield of larger OLED displays, rather than the relatively small displays of smartphones, SDC’s goal is to satisfy the requirements of customers for OLED IT products while being able to remain profitable while dominating the space.  SDC is not doing such work only for itself, but with the potential for garnering what most believe will be Apple’s further dive into OLED displays for additional products, with those being of larger sizes.  If they are able to produce those panels using a Gen 8+ deposition system, without the mask issues mentioned above, they will lead the industry and expand their domination of the OLED display space.
 
That said, this is new technology that is unproven in mass production, and while we expect SDC has spent time and money on the project, given it potential for repeat tool sales if successful, Ulvac has probably taken much of the financial risk,  However there seems to be some talk that Samsung Display has decided not to go with the Ulvac vertical system and has chosen a horizontal Gen 8+ deposition system from Canon-Tokki (7751.JP), the leading supplier of OLED deposition tools worldwide.  The Canon tool is said to be half-cut, meaning the Gen 8+ substrate is processed in two pieces, but little has been said about how the system would combat the ‘sagging mask syndrome’.  Further, the cost of the Canon tool is said to be 33% more expensive than the Ulvac tool, making such a potential decision even more unusual.  It seems that Apple was involved with the decision, opting for Canon’s experience in mass production OLED deposition over the untested Ulvac tool, and at least according to some sources, is choosing the Canon tool on Apple’s request.
 
While there has been no verification of any decision by SDC, if the company is privy to Apple’s timeline for adding more OLED displays to its IT product line, a decision needs to be made soon, as such equipment is complex, tends to be customized by the customer, and in this case, has yet to be used in a mass production setting.  We would expect the lead time for such a tool to be between 9 and 12 months, during which Samsung Display would be refitting an exiting LCD fab to accommodate this new OLED line.  If such an order were placed today, we would expect product to begin to be available in mid-2024 and real volume production by the end of 3Q in that year.  That said, until SDC, Ulvac, Canon or a sub-vendor confirms the order, it remains speculation.
 

​Back in March we noted that LG Display (LPL) had decided to trademark OLED.EX after the company unveiled its new TV line at CES, touting a 30% increase in brightness compared to conventional OLED displays.  What made this possible was a change in the chemistry used by LGD, substituting an isotope of Hydrogen (deuterium) that has both a proton and a neutron in its nucleus, as opposed to just a proton, as is the case with ‘regular’ hydrogen.  While this change is a yawn for most consumers, the bonds between molecules using deuterium rather than hydrogen, are stronger and the rate of reaction is slower than normal, which means a potentially longer life.  In OLED displays, the current ‘push’ given to emitting materials determines their lifetime, with the tradeoff between brightness (more push) and lifetime a major concern for OLED display designers.  By substituting deuterium for hydrogen, the materials can be driven harder, increasing brightness, while the lifetime remains the same, hence the 30% increase in brightness that LGD claims, similar to deuterium’s application in pharmaceuticals where it is used to extend drug lifetimes.
Deuterium has been used in the development of TADF (Thermally Activated Delayed Fluorescence) emitter materials but is currently expensive as it requires a more complex synthesis process, but when compared to the cost of alternatives that would increase OLED display brightness, such as dual OLED stacks, the material cost is more reasonable.  However, there are few sources of deuterium, as the process for extracting it from water (1 in every 6700 water molecules is deuterium) requires considerable energy, which limits production, and while the demands of LG Display’s OLED TV business use relatively small amounts of the material, it remains another expensive materials in the OLED stack.
While the promotion of deuterium as a point of differentiation for LG Display’s OLED TVs continues, they are not the only ones interested in the material, and a joint venture between Samsung Display (pvt) and Japanese chemical supplier Hodogaya Chemical (4112.JP) seems to have thought enough about the potential use of deuterium to take LG Display’s patent for its use in display devices to court in South Korea in January of this year, asking the Intellectual Property Trial & Appeal Board to invalidate the IP.  It seems that the court agreed with Samsung and Hodogaya and nullified a patent that specified the use of deuterium in an electroluminescent device that was filed by LGD and development partner Material Science (pvt), as sated in the IP Abstract below.
“The present invention has the effect that it has property including the low driving voltage, the luminous efficiency and longevity etc. as the organic compound which more specifically, becomes as the new organic compounds and the organic electroluminescent device including the same with the deuterated (Deuteration) and the organic electroluminescent device including this as the material of at least one organic layer high.”
 
IP litigation is extremely complex and in the case of organic materials, is burdened by the number o0f potential organic molecules that can be combined to create an emissive device, but when a patent is challenged, the burden of proof is on the litigant to prove that there was prior art, the patent was similar (not novel) to other IP, or a number of other qualifiers that might have been overlooked during the patent’s original application and approval.  While we have a limited understanding of the nuance of the Korean judicial system, we believe that an appeal must be filed within two weeks of the invalidation notification, or for procedural issues, a filing must be made with the Supreme Court, but it would be rare that a ruling of this kind would prohibit the broad use of deuterium in display devices, but more likely limit its use to certain circumstances. 
 
While LGD has filed tag-along patents in other countries, including the US and China, as the displays in question are produced in South Korea and China, the ruling will likely be challenged in those jurisdictions by SDC or others and defended by LGD, and will continue this litigation battle for years to come.  We expect this will do little to change LG Display’s plans for adopting the deuterium process for its entire line, but will only serve to raise the total cost of materials a bit higher when litigation costs are factored in.  

​We have spent a considerable amount of time in our notes on Samsung Display’s (pvt) ‘new’ Quantum Dot/OLED display technology, with much of that time concerning the technology itself and how it differs from other TV/large panel display technologies, but that technology oriented perspective gives short shrift to the application of that technology in Samsung Electronics’ (005930.KS) first commercial OLED TV offerings since SDC (likely with parent Samsung Electronics) decided that WOLED (OLED with color filter) was not practical for the mass production of TVs back in 2013.  While LG Display (LPL) has developed a production process and market for WOLED displays and flaunted the popularization of OLED TVs in Samsung’s face, Samsung has concentrated on RGB OLED displays, which are limited to sizes below typical TV size range.
As SDC perfected the use of quantum dots as a replacement for the color filter in a large panel setting and developed a production line for same, we begin to look at QD/OLED as a competitive product against a number of other TV display modalities, such as LCD, Mini-LED LCD, Mini-LED LCD with quantum dots, WOLED, and micro-LED, and to that end we have to look at how the sets using QD/OLED are priced.  In fact, while there will be a small segment of the buying public that will buy a QD/OLED TV because it is new, (those who answer surveys with “I am always the first to try new technology”) the ability of the technology and its application to be a viable competitor to other TV display technology is the key to success, no matter how much is spent on marketing, and that will have a great deal to do with how it is priced.
There has been much in the marketing literature for QD/OLED about ‘perceived’ specifications, separate from hard metrics, which leads us to believe that Samsung is ready to do battle with other TV modalities, and is passing through the initial release stage where price is almost irrelevant.  In fact, Samsung itself brought to our attention the fact that its two QD/OLED models have just been put on sale, with the 65” model being discounted from $2,999 to $2,099 for Labor Day, a 30% discount, and the 55” model reduced from $2,199 to $1,699, a 22.7% reduction.  This follows a previous price reduction from $2,999 to $2,599, so the reductions from the initial offering prices are substantially higher.  (See our note of 7/11/22 for details).  Samsung is also offering phone and tablet  trade-ins to be applied to the reduced price, and no-interest financing of the purchase price in 4 installments or monthly over four years (4 year option comes to $43.75 and $35.42 monthly) and delivery in 5 days, or pick-up (Best Buy) in 3 days.  Amazon is a few dollars lower.
All of this comes down to the fact that the competition in the OLED space has now been stepped up, although to pin down where the QD/OLED sets would fall against other 55” and 65” TVs is a task that involves classification by specifications and price across a multitude of TV brands ranging in price (4K) from $250 to ~$3,600.  Given that Samsung Display’s capacity is relatively limited with one fab in production for these displays, the question we ask is why is Samsung competing on price this early in the product cycle?  The obvious answer is to sell more QD/OLED TVs, but with near-term capacity relatively limited, we see this more as a way to bring the technology into the eye of the general public rather than the cognoscenti that have a vested interest in staying close to the TV space. 
Samsung is very good at building momentum behind products where they are the exclusive supplier (flexible OLED, foldables, LTPOP, etc.), but in this case the difference between Samsung’s QD/OLED product and other large panel OLED displays is a bit more subtle, forcing Samsung to more down the price curve a bit faster than they might if there were no other large panel OLED TV competitors.  That said, Mini-LED LCD and QD/Mini-LED TV have given some extra life to the premium TV market and in order to maintain their TV leadership role across the globe, Samsung must continue to broaden its product portfolio.  Adding another category here, at what is becoming a reasonable price point, is a move that will make sure they have appeal to every potential TV buyer, regardless of the price range or quality level.

​Samsung Display (pvt), an affiliate of Samsung Electronics (005930.KS), and the world’s largest producer of small panel OLED, has sold roughly 2,000 patents to Chinastar (pvt) a subsidiary of China’s TCL (000100.CH), a company in which Samsung has a 12.3% stake.  That stake was acquired as part of the 8/31/20 sale of its 60% stake in its Gen 8.5 LCD fab in Suzhou to Chinastar for $1.08b US.  In the patent package were 577 US patents owned by Samsung Display and to put that number in perspective Samsung Display has 18,860 US patents and 3,968 US patent applications, with 325 applications and 1,731 with “Liquid Crystal Display” in the title.  The price of the sale, which could have been done piecemeal, was not disclosed, although it will eventually show up in SDC’s financials, and given the company’s new revelation as to compensating those who were responsible for the IP when it is monetized, more detail will eventually show up in the footnotes.
As Samsung Display made the decision to end the production of large panel LCD displays back in 2020 and has slowly sold or shuttered all of its large panel LCD fabs, selling line equipment and converting some to small and potentially large panel OLED production, along with the company’s OLED derivative. QD/OLED, monetizing these IP assets are a logical path for SDC.  TCL/Chinastar will now have a broader IP platform under which it can more conclusively defend itself during IP litigation, while typical agreements call for the previous patent owner to be grandfathered against new litigation.
The question however, is whether Chinastar will use the extended portfolio against Chinese rival BOE (200725.CH), the largest panel producer in China, as a tool to limit BOE’s competitive ability, a practice relatively common in the display space and certainly in the CE space, and one that gains momentum as the financials of panel producers deteriorate.  The problem here would be that litigation against BOE by Chinastar could be taken as a tacit challenge from Samsung Display and potentially from Samsung Electronics, who purchases large panel LCD product from both Chinastar and BOE, given the links back to both Samsung entities.  For now things are quiet, but we expect  TCL’s lawyers are review all of the new IP to see if it pertains to existing litigation and whether it can generate new legal challenges going forward.

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…