In It
OLED deposition equipment is a rarefied market, with only a few customers and only a few suppliers. There are a number of companies that produce R&D OLED deposition tools, but when it comes to masked-based tools for high volume OLED production there are less than the fingers on one hand. When you get to the very new and highly anticipated Gen 8.6 OLED market there are only two producers with real display credibility, Canon (7751.JP) and Sunic (171090.KS).
Samsung Display (pvt) has been working with Canon since the early days of OLED mass production and at various times has purchased Canon’s entire yearly production as it built out its OLED capacity. SDC’s voracious demand for OLED deposition tools paved the way for other suppliers to enter the market, although the risk level for new deposition tool vendors is extraordinarily high. It takes years of R&D to develop these massive tools with only the word of potential customers that they would maintain their plans for OLED expansion and that they would be willing to test the tool at various stages of its development. Timing at both the client and the developer is crucial and a developmental misstep can force a potential client to go elsewhere or miss their internal production timeline. Of course, all of the R&D and much of the hardware costs of both early stage and late stage deposition equipment have to be borne by the equipment supplier, under the hope that a new customer will be returning with each OLED capacity expansion, there is no guarantee of same, especially as the cost of said equipment runs between $150m and $200m for a Gen 6 line tools and between $800m and $1b for a Gen 8.6 line (Canon).
Sunic understood years ago that to pull customers away from Canon’s deposition domination, they would have to get very close to the same specs at a lower price. The good news was that the industry was growing quickly and those that wanted to enter OLED production or expand could easily be locked out of Canon’s production timeline by Samsung. Thus Sunic became a supplier of Gen 6 OLED deposition equipment to BOE (200725,CH) and LG Display years back.
This has served them well and with the step up to Gen 8.6 OLED for IT fabs, Sunic is already supplying Gen 8.6 deposition tools to BOE’s Gen 8.6 fab and potentially that of LG Display, should they make the decision to proceed. Visionox (002387.CH) is also building a Gen 8.6 fab but has chosen to use a new photolithographic process for its first line, followed by a mask-based line that would likely use the Sunic deposition system some time in the future.
Sunic has chosen to expand its Gen 8.6 production capabilities by building a new deposition production line. They purchased the 22,600m2 building last year for $16.8m and expect to spend an additional $13m to outfit the production line, with a completion data of June 24, 2026. Given that the deposition machines that they are currently building, which must handle substrates that are more than twice the size of the previous (Gen 6) tools, are at least twice as big, they need the space.
All in, while ink-jet deposition and photolithography are going to compete with more standard mask-based Gen 8.6 deposition tools, Sunic and Canon will continue to build out production under the expectation that demand for OLED IT products will continue to grow and those like Samsung Display, BOE, and perhaps, LG Display will continue to expand their Gen 8.6 capacity. It’s a high-risk game but you’ve got to be in it to win it.
Samsung Display (pvt) has been working with Canon since the early days of OLED mass production and at various times has purchased Canon’s entire yearly production as it built out its OLED capacity. SDC’s voracious demand for OLED deposition tools paved the way for other suppliers to enter the market, although the risk level for new deposition tool vendors is extraordinarily high. It takes years of R&D to develop these massive tools with only the word of potential customers that they would maintain their plans for OLED expansion and that they would be willing to test the tool at various stages of its development. Timing at both the client and the developer is crucial and a developmental misstep can force a potential client to go elsewhere or miss their internal production timeline. Of course, all of the R&D and much of the hardware costs of both early stage and late stage deposition equipment have to be borne by the equipment supplier, under the hope that a new customer will be returning with each OLED capacity expansion, there is no guarantee of same, especially as the cost of said equipment runs between $150m and $200m for a Gen 6 line tools and between $800m and $1b for a Gen 8.6 line (Canon).
Sunic understood years ago that to pull customers away from Canon’s deposition domination, they would have to get very close to the same specs at a lower price. The good news was that the industry was growing quickly and those that wanted to enter OLED production or expand could easily be locked out of Canon’s production timeline by Samsung. Thus Sunic became a supplier of Gen 6 OLED deposition equipment to BOE (200725,CH) and LG Display years back.
This has served them well and with the step up to Gen 8.6 OLED for IT fabs, Sunic is already supplying Gen 8.6 deposition tools to BOE’s Gen 8.6 fab and potentially that of LG Display, should they make the decision to proceed. Visionox (002387.CH) is also building a Gen 8.6 fab but has chosen to use a new photolithographic process for its first line, followed by a mask-based line that would likely use the Sunic deposition system some time in the future.
Sunic has chosen to expand its Gen 8.6 production capabilities by building a new deposition production line. They purchased the 22,600m2 building last year for $16.8m and expect to spend an additional $13m to outfit the production line, with a completion data of June 24, 2026. Given that the deposition machines that they are currently building, which must handle substrates that are more than twice the size of the previous (Gen 6) tools, are at least twice as big, they need the space.
All in, while ink-jet deposition and photolithography are going to compete with more standard mask-based Gen 8.6 deposition tools, Sunic and Canon will continue to build out production under the expectation that demand for OLED IT products will continue to grow and those like Samsung Display, BOE, and perhaps, LG Display will continue to expand their Gen 8.6 capacity. It’s a high-risk game but you’ve got to be in it to win it.
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