Universal Display funds subsidiary building purchase
Universal Display (OLED) has funded the purchase of what is the headquarters of subsidiary, Adesis Inc, allowing the company to have access to the entire 47,500 ft2 building in New Castle, DE. UDC purchased Adesis in August 2016 for $36m in order to capture a greater portion of the company’s contract research, of which UDC had been their largest customer. The company will now have roughly 2x the R&D and manufacturing space, which we expect will be built-out to help support UDC’s material research programs.
We note that the use of CROs[1] has become widespread in the OLED material space as new techniques for the rapid evaluation and selection of organic molecules through automated computer simulation and specification systems. Being able to evaluate the prospects of hundreds of potential organic molecular combinations daily gives UDC and other OLED material suppliers a huge increment to their ability to design new OLED stack materials, which are essential for the growth of the OLED display market. While UDC has its own in-house material R&D program, we believe it was at maximum physical capacity last year, and the acquisition of Adesis, with whom the company had been involved for years, was a way to expand that organization without adding a new physical facility. With the acquisition of the Adesis building, they accomplish the same goal.
Competition for the development of a deep blue phosphorescent OLED emitter has become more intense over the last 18 months as competition from a number of TADF[2] developers and other alternative emissive materials, and the obvious expansion of the OLED industry itself, up the stakes relative to new OLED material development. UDC has made IP related acquisitions to capture potential lines of ‘blue’ research, but high throughput molecular sorting has upped the game considerably. While the development of a long lifetime blue emitter is not the only objective of this push toward automated molecular selection, it will help move the process along much faster than could be done with manual selection, and given the competition related to OLED material development, it is a way for OLED material companies to maintain the inevitable pricing pressure that comes from OLED display producer’s desire to lower cost.
[1] Contract Research Organizations
[2] Thermally Activated Delayed Fluorescence
We note that the use of CROs[1] has become widespread in the OLED material space as new techniques for the rapid evaluation and selection of organic molecules through automated computer simulation and specification systems. Being able to evaluate the prospects of hundreds of potential organic molecular combinations daily gives UDC and other OLED material suppliers a huge increment to their ability to design new OLED stack materials, which are essential for the growth of the OLED display market. While UDC has its own in-house material R&D program, we believe it was at maximum physical capacity last year, and the acquisition of Adesis, with whom the company had been involved for years, was a way to expand that organization without adding a new physical facility. With the acquisition of the Adesis building, they accomplish the same goal.
Competition for the development of a deep blue phosphorescent OLED emitter has become more intense over the last 18 months as competition from a number of TADF[2] developers and other alternative emissive materials, and the obvious expansion of the OLED industry itself, up the stakes relative to new OLED material development. UDC has made IP related acquisitions to capture potential lines of ‘blue’ research, but high throughput molecular sorting has upped the game considerably. While the development of a long lifetime blue emitter is not the only objective of this push toward automated molecular selection, it will help move the process along much faster than could be done with manual selection, and given the competition related to OLED material development, it is a way for OLED material companies to maintain the inevitable pricing pressure that comes from OLED display producer’s desire to lower cost.
[1] Contract Research Organizations
[2] Thermally Activated Delayed Fluorescence
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