Expanded Capacity for AMOLED Panels Seen Bringing Costs Down for Smartphones

SAN FRANCISCO -- A major boost in capacity led by Samsung Mobile Display will drive growth in the AMOLED (active-matrix OLED) display market to 300 million units in 2015, from 74 million units this year, said IHS iSuppli’s Vinita Jakhanwal. The director for small and medium display research spoke at the OLED World Summit 2011. Smartphones will continue to be the primary driver for AMOLED displays, accounting for 95 percent of shipments to OEMs, falling to 85 percent by 2015, Jakhanwal said.

It’s less clear how TVs and tablets will fit into the picture going forward, however, as each application faces hurdles with AMOLED technology in addition to cost challenges, Jakhanwal said. Smartphones will continue to represent the majority of AMOLED market share by 2015, with tablets estimated to take a 6 percent share, TVs 1 percent, digital cameras 5 percent, personal media devices with 3 percent and “others” with 1 percent.

Samsung Mobile Display currently accounts for 100 percent of AMOLED panel production, and it will add three Gen 5.5 lines over the next two years, each capable of producing about 24 sheets per month, Jakhanwal said. Monthly yield is expected to reach an equivalent 18 million 4-inch panels at the end of Samsung’s Gen 5.5 investment, and Samsung, the only supplier with a Gen 5.5 plant, will have a 30 percent cost advantage until 2013, she said.

Samsung’s AMOLED share will shrink to 82 percent in 2015 as additional suppliers including LG, AUO, TPO, Irico and Tianma come online over the next few years, Jakhanwal said. LG launched two Gen 4.5 plants this year -- one for mobile displays and one for TV -- and plans a Gen 8 TV panel plant capable of 15,000 sheets per month by second half 2013, Jakhanwal noted. AUO and TPO are set to go online in second half 2012, she said, and Irico and Tianma fab plants are under construction. One Gen 4.5 or 5.5 substrate can increase production of 4.3-inch panels by 3.2 times, and of 7-inch panel threefold, leading to cost efficiencies, she said. Samsung’s Gen 5.5 plant can produce 5.1 million 4-inch panels monthly, compared with 1.6 million for a Gen 4 fab, and will be capable of producing 4 and 7-inch panels for smartphones and tablets, she said.

The top six or seven OEMs provide almost all smartphones shipped today, Jakhanwal said. Samsung and Nokia will lead demand for AMOLED because of their relationships with Samsung Mobile. “Samsung Electronics does get some preferential treatment” from Samsung Mobile in faster access to improved technologies, she said, which will keep Samsung as the top OEM of the AMOLED market. Nokia has invested substantially in AMOLED technology, although its market share has declined. Sony and Research In Motion don’t seem likely to adopt AMOLED because of the high cost of investment, Jakhanwal said. Motorola Mobility, which Google has agreed to buy, is the next most likely smartphone provider to adopt AMOLED, but “their numbers, even assuming a decent penetration rate, will not result in large volumes,” she said.

Apple is the wild card in the smartphone market since it currently relies on LTPS (low-temperature polycrystalline silicon) for its high-resolution displays that have set a high bar in the market. It’s “very unlikely” that Apple will switch to AMOLED in the next couple of years, Jakhanwal said. Even without Apple, OEMs will create demand of 235 million phones by 2015, “which is what the supply side can support,” she said.

AMOLED and LTPS LCD “compete pretty closely” for the smartphone market right now, Jakhanwal said. Apple, Nokia and Samsung Electronics account for more than half of LTPS LCD demand and will continue to put pressure on LTPS LCD supply, which has been constrained over the last year and will continue to be so until 2012 when Sharp expands LTPS production, she said. It’s a lost opportunity for AMOLED, which could have taken market share from LTPS due to its supply limitations at older generation fabs, she said. “But 2012 and 2013 will become more challenging for AMOLED” as it competes with incumbent technology whose fabs are “already depreciated,” she said.

Currently, amorphous silicon (a-Si) panels dominate the market with 73 percent share estimated for 2011 -- and 57 percent of revenue -- due to the large capacity base, Jakhanwal said. LTPS represents 20 percent of the market, driven by high-res smartphone screens, and AMOLED represents 4 percent of shipments. AMOLED is expected to grow to 10 percent of shipments, with a growth rate of 37 percent, by 2015, she said.

In tablets, one of the obstacles to penetration is higher resolution, an issue that will also impact advances in smartphone technology, Jakhanwal said. The rumored high-res iPad, expected in early 2012, is likely to push the tablet market into the 250 pixel-per-inch range (ppi) from its current level of 101 to 150 ppi, she said. The tablet market is still “uncertain,” with some players exiting and others yet to enter, she said. “Those could all change the market dynamics,” she said. OEMs may use AMOLED for differentiation, but Apple’s investment in LTPS makes it an unlikely adopter of AMOLED, she said.

An appeal of AMOLED in the smartphone market is the ability to integrate touch capability into the display, eliminating one glass substrate, Jakhanwal said. A thinner, lighter form factor “is extremely important” and the LCD side doesn’t currently offer a comparable solution that’s efficient from the production or cost side, she said. If AMOLED suppliers are able to bring down costs for flexible displays that offer thinner, rugged form factors, those could make AMOLED a very appealing solution for differentiation, she said. Most smartphone suppliers can offer “the same set of features, small form factors, higher color and better viewing angle,” she said, “but each OEM is trying to differentiate from other phones” and a flexible display would be a “big advantage,” she said.

Flexible AMOLED displays could hit the market by 2013 but won’t reach manufacturing volume for a year or 18 months from then, Jakhanwal said. One major hurdle facing flexible displays is the need for a commercial barrier coating to protect the OLED long-term, which will limit volume production, she said. “The methodology to ensure quality is not developed and no one seems to be moving there very fast.” Without that reliability, “mass production will be challenging,” she said.

Looking at the flat-panel TV market, AMOLED faces a steep climb, with LCDs currently at 250 million units, growing to 300 million unit shipments by 2015, Jakhanwal said. Market potential is “as big as the tablet market,” she said, but AMOLED TVs will have to be competitive with LCD to gain traction at the 40-inch and larger segment where most flat-panel TVs are being produced. “If a new technology comes into a 300 million unit market, it has to be cost competitive, or match the pricing, and it’s still unclear when that point will be reached for AMOLEDs,” she said. IHS is forecasting 2 million AMOLED display panel shipments in the TV market by 2015, with volume growth coming in following years. Flexible and printable OLED panels “can change the adoption for larger size panels,” she said.

OLED World Summit Notebook

Panasonic Idemitsu OLED Lighting Co. Ltd. (PIOL), a joint venture formed in April by Panasonic and Idemitsu Kosan, released its first OLED lighting panel this month, said Takao Miyai, general manager of the products department for the venture. Miyai displayed a working panel, roughly the size of a small tablet display, at the Summit Wednesday. The panel will be joined in December by an OLED lighting module from Panasonic Electric Works, Miyai said. He would only say “coming soon” regarding Panasonic Electric Works’ release of an OLED lighting fixture. Applications for OLED lighting, which emit light from the entire surface rather than from a point source, include museum lighting, backlit displays and pendant lighting, he said. Advantages of OLED lighting are low ultraviolet emissions, minimal heat generation, high color rendering index (CRI) and a thin form factor, he said. Panel specs for the 2012 product include a CRI of more than 90, luminance of 3000cd/m2,light efficiency of 30 lm/W, and 10,000-hour lifetime at 70 percent decay, Miyai said. PIOL is targeting efficiency of 100 lm/W by 2016 and 130 lm/W by 2019, he said, and luminance of 5000cd/m2 by 2016. Lifetime targets are 20,000 hours by 2016 and 40,000 by 2019, he said. Panels are expected to grow from the current 80 x 80 mm size to 300 x 300 mm by 2016 and 600 x 600 mm by 2019, he said. By 2019, PIOL plans to produce panels that are flexible, transparent and color-tunable, Miyai said. OLED will catch up to LED in efficiency by 2030, he said. PIOL is forecasting panel sales totaling $625 million by 2018, he said. Panasonic, which began developing OLED technology in 1985 under Panasonic Electric Works, owns 51 percent of the venture and supplies design and manufacturing for the partnership, while Idemitsu Kosan, which owns the rest, contributes organic materials, molecular structure design and organic synthesis process technologies.