Samsung Boosts 2015 Forecast for OLED Display Sales to 700 Million Units

Samsung Mobile Display (SMD) boosted 2015 sales forecasts for active matrix OLED displays (AMOLED)in handheld devices to 700 million units, from a 600 million prediction just three months ago, citing growing demand for the technology, Universal Display executives said in a conference call. Universal supplies red phosphorescent OLED material to SMD. Samsung’s Galaxy S smartphone, which contains a 4-inch OLED with 800x480 resolution, has sold 5 million units since June, while Verizon launched sales of HTC’s Droid Incredible with a an 3.7-inch panel, Universal executives said.

Samsung plans to invest $2.2 billion to build a new 5.5-generation AMOLED plant that’s expected to open by 2012. Samsung unveiled a 4.3-inch AMOLED with 800x480 resolution and a flexible backplane at a flat panel display conference in Yokohama, Japan, this month. Verizon has started selling the Samsung Continuum cellphone with a 3.4-inch OLED. AU Optronics and LG Display also will start volume production along 3.5G lines in 2011, Universal officials said.

With the increased use of OLEDs in smartphones, SMD has struggled to keep pace with demand and has focused on supplying affiliate Samsung Electronics. Samsung isn’t expected to free up capacity for OEM customers for 18 months, or around the time the 5.5G factory is expected to start production (CED Aug 11 p2). Among the companies shifting some production to LCDs from OLEDs was HTC, which moved the Droid Incredible to a Sony LCD after it wasn’t able to secure adequate OLED supply.

Universal Display’s Q3 loss widened to $7.2 million from $4.7 million as it recorded a $3.4 million non-cash expense related to outstanding warrants to buy 744,000 shares that expire in August 2011. Universal’s Q3 revenue jumped to $7.1 million from $5.1 million a year earlier amid strong sales of phosphorescent materials to SMD, which accounted for 40 percent of the company’s sales. Universal’s Q3 commercial revenue rose to $2.83 million from $1.62 million, while those from developmental materials to $4.21 million from $3.52 million. Universal got $800,000 in Q3 in royalties and $200,000 in license fees, Chief Financial Officer Sidney Rosenblatt said. Samsung accounted for the majority of commercial sales, while developmental materials were sold to LG Display, AU Optronics and others. The shift to commercial production erodes Universal’s gross margins, but they're expected to remain around 80 percent for the next two years, Universal CEO Steve Abramson said.

Universal recorded $1.3 million in contract revenue in Q3 and ended the quarter with a research contract backlog of $7 million. Among these is a $4 million award Universal and Moser Baer Technologies received from the U.S. Department of Energy to create a phosphorescent OLED lighting panel manufacturing facility. Moser Baer is breaking ground on a new $20 million facility in Canandaigua, N.Y., that will start production in Q3 2011, Abramson said. The program with Moser Baer is designed to demonstrate production of phosphorescent OLED materials in white lighting panels for commercial applications. The factory is expected to have up to 50 employees by 2012, Abramson said. The Moser facility will produce lighting panels in “small volumes” and is designed as a “proof of concept,” Abramson said.

The company also is continuing development of a phosphorescent green OLED material and is testing it with “several” customers including Samsung. Red OLED phosphorescent is the only material in volume production. Universal also is sampling a light blue phosphorescent material designed to cut power consumption up to 33 percent. “I would suggest that you are going to see green” in production before light blue, said Abramson, who didn’t disclose the timing for volume production of either material.