Still Working On It
As far back as 6/24/20 we noted that strained relations between Japan and South Korea has pushed the South Korean Ministry of Trade to sponsor a Fine Metal Mask ‘bakeoff’ pitting a number of South Korean companies against each other to find the best production methodology to develop an in-country supply chain, allowing South Korea to become less dependent on Japan for this critical part of OLED production technology. The South Korean Ministry of Trade chose APS (054620.KS) (laser patterning) and Poongwon Precision (pvt) (etch) as the winners in the project, leaving Philoptics (161580.KS) and Olum Materials (pvt) to work on their own.
Much of the momentum behind the South Korean government’s interest in Fine Metal Masks is due to the fact that the world’s largest producer of OLED displays, Samsung Display (pvt) buys almost all of its masks from Japanese suppliers Dai Nippon Printing (7912.JP) and Toppan Printing (7911.JP) who dominate this market. The masks, which must meet extremely fine tolerances in order to correctly pattern OLED materials, must be cleaned and replaced regularly, and any disruption in mask supply could slow or halt OLED display production, regardless of whether the reason is political or production related. As the material used to produce such masks is made from Invar, an iron/nickel alloy (36% - 42% nickel) and the price of nickel has increased from $20,912/ton at the end of last year to $35,500/ton now (with a peak of $48,196 in the interim), as Russia is a top 5 producer, the sensitivity toward ensuring mask supply and proper pricing has returned.
To make things even more difficult, there are a number of ways in which the masks can be made, with Dai Nippon and Toppan using an etch method while APS uses laser patterning and Philoptics uses electro-forming, a method that deposits the metal on a mandrel. When the South Korean government created the ‘bake-off’, much was to see which technologies would be most practical, with laser patterning and the more standard etch winning out. That said, Philoptics has continued to refine it electro-forming process, despite its bakeoff loss, and has been supplying evaluation product to a Chinese OLED panel producer. The company expects that the evaluation process, which began late last year will take roughly a year and will begin to generate sales (if accepted) in 2023. The Chinese OLED producer is looking to add a mask supplier as it depends entirely on Japanese mask producers and Philoptics also hopes to sell to Samsung Display as well, although a similar qualification process would have to be completed.
Much of the momentum behind the South Korean government’s interest in Fine Metal Masks is due to the fact that the world’s largest producer of OLED displays, Samsung Display (pvt) buys almost all of its masks from Japanese suppliers Dai Nippon Printing (7912.JP) and Toppan Printing (7911.JP) who dominate this market. The masks, which must meet extremely fine tolerances in order to correctly pattern OLED materials, must be cleaned and replaced regularly, and any disruption in mask supply could slow or halt OLED display production, regardless of whether the reason is political or production related. As the material used to produce such masks is made from Invar, an iron/nickel alloy (36% - 42% nickel) and the price of nickel has increased from $20,912/ton at the end of last year to $35,500/ton now (with a peak of $48,196 in the interim), as Russia is a top 5 producer, the sensitivity toward ensuring mask supply and proper pricing has returned.
To make things even more difficult, there are a number of ways in which the masks can be made, with Dai Nippon and Toppan using an etch method while APS uses laser patterning and Philoptics uses electro-forming, a method that deposits the metal on a mandrel. When the South Korean government created the ‘bake-off’, much was to see which technologies would be most practical, with laser patterning and the more standard etch winning out. That said, Philoptics has continued to refine it electro-forming process, despite its bakeoff loss, and has been supplying evaluation product to a Chinese OLED panel producer. The company expects that the evaluation process, which began late last year will take roughly a year and will begin to generate sales (if accepted) in 2023. The Chinese OLED producer is looking to add a mask supplier as it depends entirely on Japanese mask producers and Philoptics also hopes to sell to Samsung Display as well, although a similar qualification process would have to be completed.
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