Saving Every Penny
Back in February (02/23/22 & 02/25/22) we noted that Samsung Display had decided to vary the OLED materials it used to produce displays for the Galaxy S22 series of smartphones, using its M10 materials for the lower priced S22 and switching to the newer M11 material set for the Galaxy S22 Plus and the Galaxy S22 Ultra displays. While the difference to the average customer would likely be almost impossible to notice, the basis for the divergence in OLED material sets is based on cost, particularly the cost of emitter materials, those that actually produce the RGB light that we see. The red and green emitters used in OLED displays are produced and licensed to display producers by Universal Display (OLED), while the blue fluorescent emitter materials are produced by SFC (112240.KS) and Idemitsu Kosan (5019.JP).
As we have noted in the past, UDC charges for those materials based on long-term contractual agreements that are based on material volumes, with the price/kilogram declining as volumes reach various trigger points until the reach a ‘terminal’ rate that remains the same for the life of the material. This implies that ‘newer’ material stacks would be more expensive until the necessary higher volumes are reached, while older material stacks would be less expensive. That said, this would also mean that Samsung would have to dedicate a particular deposition line to a specific Galaxy S series model so as not to have to change deposition tool settings, and that would only happen if overall model volumes remain high enough to justify dedicating a line to that model, as it does with the Galaxy S series products.
It seems that Samsung Display has convinced Apple that such a split process is also a viable cost savings measure for the iPhone 14 displays it will be producing. Not only will SDC be using an LTPO (Low-temperature poly-Oxide) backplane that will allow for a higher refresh rate without higher power consumption, but will be using a newer (M12) material set for the display stack for the 6.1” iPhone Pro and 6.7” Pro Max and the M11 material stack for the 6.1” iPhone 14 and the new iPhone 14 Max in order to remain price competitive against LG Display and BOE, who will be supplying displays for the iPhone 14 and iPhone 14 Max. While SDC is the primary provider of LTPO displays to Apple for the iPhone 14, the company faces considerable price competition from BOE and LGD for the iPhone 14 LTPS models and while the difference in OLED stacks might seem negligible to most consumers, when multiplied across some 80m units that Samsung is expected to supply, it can help to offset the price effect from the lower margins that BOE is likely to settle for in order to develop its OLED display relationship with Apple.
As we have noted in the past, UDC charges for those materials based on long-term contractual agreements that are based on material volumes, with the price/kilogram declining as volumes reach various trigger points until the reach a ‘terminal’ rate that remains the same for the life of the material. This implies that ‘newer’ material stacks would be more expensive until the necessary higher volumes are reached, while older material stacks would be less expensive. That said, this would also mean that Samsung would have to dedicate a particular deposition line to a specific Galaxy S series model so as not to have to change deposition tool settings, and that would only happen if overall model volumes remain high enough to justify dedicating a line to that model, as it does with the Galaxy S series products.
It seems that Samsung Display has convinced Apple that such a split process is also a viable cost savings measure for the iPhone 14 displays it will be producing. Not only will SDC be using an LTPO (Low-temperature poly-Oxide) backplane that will allow for a higher refresh rate without higher power consumption, but will be using a newer (M12) material set for the display stack for the 6.1” iPhone Pro and 6.7” Pro Max and the M11 material stack for the 6.1” iPhone 14 and the new iPhone 14 Max in order to remain price competitive against LG Display and BOE, who will be supplying displays for the iPhone 14 and iPhone 14 Max. While SDC is the primary provider of LTPO displays to Apple for the iPhone 14, the company faces considerable price competition from BOE and LGD for the iPhone 14 LTPS models and while the difference in OLED stacks might seem negligible to most consumers, when multiplied across some 80m units that Samsung is expected to supply, it can help to offset the price effect from the lower margins that BOE is likely to settle for in order to develop its OLED display relationship with Apple.
Samsung OLED Stack Structures & Suppliers - Source: SCMR LLC, The Elec, various suppliers
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