Cost Analysis (2Q, 2018)

There are two types of Cost Analysis provided by UBI Research. One is the BOM cost of flexible OLEDs produced by Samsung Display, and the other is WRGB OLED panel production cost of LG Display.

 

The material costs for Galaxy S and flexible OLED for iPhone produced by Samsung Display, the largest OLED maker for mobile devices such as smartphones, tablet PCs and smart watches, are the key information that latecomers should know in order to secure cost competitiveness. BOM cost of flexible OLED used in Galaxy S9 of Samsung Display in the second quarter decreased about 10% compared to the previous quarter. The reason for the cost decrease is that the yield of the whole process has been improved.

 

The manufacturing technology of OLED panel for TVs includes WRGB OLED structure currently being manufactured by LG Display, solution processed OLED using inkjet technology, and finally QD-OLED (blue OLED) being developed by Samsung Display.  The 77-inch WRGB OLED produced by LG Display is estimated to be in the surplus after the depreciation is over. The depreciation of the E4-1 line, which produces 55 inches and 65 inches, is scheduled to be finished next year. As a result, 55-inch and 65-inch WRGB OLED panels will be competitive compared to LCD and other OLED technologies. In the 65-inch OLED TV, which is the flagship product of the premium TV market, panel manufacturing cost is analyzed as US$ 967. Among overall manufacturing costs, the panel cost accounts for the largest portion at 52%.

 

AMOLED Market Track II (2Q, 2018)

Investments by Chinese companies including BOE are continuing while Samsung Display’s investment has stopped. The substrate area for mobile devices centering on the 6 Generation line was 3.5 million square meters, up 6.4% from the previous quarter.

In the smartphone OLED market, oversupply is continuing due to high panel prices. In the second quarter, there was a 23% oversupply and 20% oversupply will be maintained until the end of the year. In contrast, WRGB OLED panels for TVs in the second quarter showed a 4% supply shortage.

Samsung Display is maintaining an overwhelming lead in terms of competitive edge among display companies that produce OLEDs for Smartphones. Samsung Display’s average sales per square meter are US$ 2,758, four times higher than that of LG Display, which keeps the second place in terms of competitiveness. BOE is about half the level of LG Display.

AMOLED Market Track I (2Q, 2018)

AMOLED panel market of the second quarter reached US$ 65 billion. Flexible OLED market totaled US $ 3.85 billion, accounting for 59.5% of the total market. Analysis of sales by country shows that Korean companies account for 96.9% with the total sales of US$ 62.8 billion, while Chinese companies account for 3% with the sales of US$ 190 million.

Estimated revenues in 2018 are to be US$ 32.1 billion, and Smartphone OLEDs are expected to account for 89.5% of the total market with the sales amount of US$ 28.75 billion. The sales of rigid OLED is projected to be US$ 32.1 billion, occupying 33.5% of the market.