Samsung, LG Display to Increase OLED Manufacturing Capacity
Samsung Mobile Display and LG Display are gearing up to increase production of OLED panels late this year, signaling renewed interest in the technology, Universal Display officials said on a quarterly earnings call.
LG is adding a 3.5-generation OLED manufacturing line and will ship the first displays from it in the second half, said Universal Chief Financial Officer Sidney Rosenblatt. LG was expected to install a second production line last year (CED May 11 p5), but postponed plans. It wasn’t clear how much volume a second line will add and LG officials weren’t available Tuesday for comment.
Samsung is installing manufacturing equipment that will help boost monthly capacity to 6 to 8 million units by year-end from 2 to 3 million, Rosenblatt said. Samsung has a licensing agreement with Universal for its phosphorescent OLED material (PHOLED) that expires in June, Rosenblatt said. LG recently extended a OLED materials supply pact to June, he said. Chi Mei Optoelectronics, which built active matrix OLED panels for Kodak’s 7.6-inch digital picture frame, had a materials agreement with Universal that ended in late 2009, Universal said in a 10-K filed Monday. Chi Mei’s OLED business is “inactive” pending the sale of the company to Innolux Display, Universal said.
AU Optronics also will potentially weigh on Universal’s revenue this year. AU, which ended OLED production in 2006, has resumed buying manufacturing equipment with a goal of shipping displays in 2011, Rosenblatt said. Universal expects to sell commercial or development OLED materials to AU by year-end, he said.
Most of the OLED production thus far has focused on displays for cellphones, digital audio players and personal media players. Sony discontinued sales of its 11-inch OLED TV, but LG is expected to field a 15-inch model in the U.S. later this year. LG will ship the 15-inch OLED TV in Europe in the first half, Universal officials said. Samsung, which has promised for several years to bring 40-inch OLED TVs to market by 2010, was said last year to be planning 23-inch models. Sony hasn’t signed a licensing agreement with Universal, focusing instead on florescent materials for OLED displays. At the recent DisplaySearch conference, Samsung executives vowed that large-screen OLED TVs would arrive on the market sooner than most people think (CED March 4 p1).
LG purchased Kodak’s small molecule OLED patents late last year, but that won’t eat into Universal’s business, Universal CEO Steve Abramson said. “From our perspective the industry is continuing to grow and we are still seeing continued and expanded interest in our technologies,” Abramson said.
Meanwhile, Sumitomo’s Cambridge Display Technology (CDT) is appealing a European Patent Office decision rejecting its notice of opposition to a Universal European patent, Universal said. CDT is expected to file by April 6 with the patent officer documents detailing its appeal, Universal said. CDT opposed a European patent issued to Universal in 2006, which was a counterpart to four U.S. patents covering flexible OLEDs (FOLEDs). Among the patents was one granted in 1998 to three Princeton researchers including Stephen Forrest describing a vacuum deposition method for making flexible OLEDs. Forrest has a research agreement with Universal. In 2009, Universal renewed that pact for four years, agreeing to reimburse the universities for up to $7.5 million in research costs, the 10-K said.
Universal’s Q4 loss narrowed to $3.84 million from $4.43 million as revenue rose to $4.85 million from $3.58 million, the company said. Commercial sales, including chemical, license and royalty revenue, jumped to $1.88 million from $1.35 million, Universal said. Development revenue from research contracts and developmental chemicals increased to $2.96 million from $2.23 million, it said.
Universal also started or continued work in 2009 under 15 research and development deals with U.S. government agencies, including the U.S. Army for flexible displays and the Department of Energy for white OLEDs for solid-state lighting. The contracts produced $1.4 million in revenue in Q4, $4 million for the fiscal year ended Dec. 31, Rosenblatt said. The contracts will yield about $4.5 million in revenue this year, he said.