JOLED on the Rocks?
Back in 2015 Japan Display (6740.JP), Sony, and Panasonic (6752.JP) all contributed their OLED businesses to the formation of a combined entity known as JOLED (pvt), with Sony retaining some small panel OLED assets. The venture was funded primarily by INCJ (Innovation Network Corporation of Japan), a partnership between the Japanese government and a number of major Japanese companies. INCJ provided 75% of the funding with JDI 15%, Panasonic 5% and Sony 5% with the goal of utilizing Panasonic’s ink-jet printing technology and Sony’s OLED R&D to develop IJP OLED displays, with JDI announcing its intention to increase its stake to 50% in 2017, which unfortunately did not occur due to financial issues at JDI, but JOLED was able to raise an additional $400m in 2018 from a group led by automotive component provider Denso (6902.JP).
JOLED was the first display manufacturer to produce commercial displays using IJP and in early 2018 began shipping what were then high resolution medical displays, followed by a 21” monitor panel for ASUS (2357.TT) and a year later began producing IJP OLED panels from a fab in Nomi Japan and in 2020 TCL (000100.CH) took a 10.76% stake ($280m US) in JOLED in order to license the JOLED IJP technology to Chinastar (pvt), TCL’s display affiliate. Unfortunately the supply contracts that JOLED has been able to secure have not been particularly large, making it difficult for the company to realize the cost benefits afford to IJP relative to other OLED deposition platforms, and while the company supplied the display for LG Electronica (066570.KS) first OLED monitor, certainly a feather in its cap considering LG’s affiliate LG Display (LPL) is the premier producer of large panel OLED displays, volumes and yields have not been strong and deal with Lexus (LEXUS.IN) fell through after years of development when the company was unable to deliver product that met specifications.
A recent visit from the chairman of TCL and the announcement that Chinastar and JOLED are sharing IP to develop new products in addition to the 65” 8K OLED ink-jet printed TV that was jointly developed, gives some hope that TCL is serious about maintaining JOLED as a partner and could fund them further if necessary, but whether that means an additional stake in JOLED or a takeover of the entire company by TCL, JOLED seems to be in need of one of two things, financial aid or higher volume orders, and while TCL could certainly provide either or both, would that undermine Chinastar’s OLED efforts, which have been oriented toward developing enough expertise in the OLED space to gain entry into the Apple display supply chain. We would expect some movement either way by the end of this year.
JOLED was the first display manufacturer to produce commercial displays using IJP and in early 2018 began shipping what were then high resolution medical displays, followed by a 21” monitor panel for ASUS (2357.TT) and a year later began producing IJP OLED panels from a fab in Nomi Japan and in 2020 TCL (000100.CH) took a 10.76% stake ($280m US) in JOLED in order to license the JOLED IJP technology to Chinastar (pvt), TCL’s display affiliate. Unfortunately the supply contracts that JOLED has been able to secure have not been particularly large, making it difficult for the company to realize the cost benefits afford to IJP relative to other OLED deposition platforms, and while the company supplied the display for LG Electronica (066570.KS) first OLED monitor, certainly a feather in its cap considering LG’s affiliate LG Display (LPL) is the premier producer of large panel OLED displays, volumes and yields have not been strong and deal with Lexus (LEXUS.IN) fell through after years of development when the company was unable to deliver product that met specifications.
A recent visit from the chairman of TCL and the announcement that Chinastar and JOLED are sharing IP to develop new products in addition to the 65” 8K OLED ink-jet printed TV that was jointly developed, gives some hope that TCL is serious about maintaining JOLED as a partner and could fund them further if necessary, but whether that means an additional stake in JOLED or a takeover of the entire company by TCL, JOLED seems to be in need of one of two things, financial aid or higher volume orders, and while TCL could certainly provide either or both, would that undermine Chinastar’s OLED efforts, which have been oriented toward developing enough expertise in the OLED space to gain entry into the Apple display supply chain. We would expect some movement either way by the end of this year.
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