Panel makers have just gone through an agonizing period in which making money by manufacturing large LCDs for television has been difficult or impossible. Panel prices are stabilizing now and may start increasing by April or May, but the specter of significant new Chinese production coming on line does not make for a rosy, medium-term price picture. The maturing of the large-size LCD industry has the first-tier players looking for the next big thing – a big thing that might actually be profitable. There seems to be major agreement that OLED is that big thing, or at least the leading one.
Samsung was prescient enough and stubborn enough to start with AMOLED early and stick with it through a lengthy series of unanticipated difficulties. They have now been rewarded with a near monopoly in the AMOLED smart phone market and developing AMOLED tablet market. That puts them in an excellent position to move on to AMOLED TV, and they anticipate introducing their first major product, an 55-inch TV, in H2’12.
Interestingly, Samsung has just announced it will spin off its LCD manufacturing operation into a separate company. That will mean the operation will have to stand on its own, and not sacrifice profitability for the greater good of Samsung Electronics. The LCD panel-making operation has benefitted from having a semi-guaranteed market from under the Samsung corporate umbrella, but it has been a two-edged sword. Once Samsung LCD has been spun off, it may be tucked under the corporate wing Samsung Mobile Display (SMD), the Samsung company that makes OLED displays. Right now, that would amount to a small dog wagging a very big tail, but it would be a clear statement that Samsung subscribes to the view of some analysts that AMOLED-TV will have 30% of the market in a very few years. If SMD is in control, it would have a major effect on decisions such as whether an LCD fab should be converted to OLED production.
LG was late to the game as far as volume AMOLED production is concerned, but it developed an aggressive strategy to leapfrog Samsung to be first with Gen 8 AMOLED manufacturing. Its strategy is based on using the color-by-white technology it purchased from Kodak for the front plane and unproven oxide TFTs for the backplane. Like Samsung, LG has promised 55-inch AMOLED-TVs for the second half.
That leaves Sony wondering what, if anything, it can do to salvage the TV business that has not only lost money for eight years, but has also ceded market and technical leadership to its Korean competitors.
Sony has not had the ability to make its own TV displays since the days of the Trinitron cathode-ray tube, which was a technical and commercial triumph in its time. Sony’s XEL-1 11-inch AMOLED-TV of 2007 looked stunning but it was more a PR effort to convince the world that Sony was still a technology leader in TV rather than a real product, especially at an MSRP of $2500.
Sony’s new CEO and President, Kazuo Hirai, has promised to rebuild the company’s TV business and accelerate innovation. Currently, Sony’s available OLED products – outside of the microdisplays used in camera viewfinders – are the reference monitors it makes for the broadcast and post-production industries. These monitors come with a three-year warranty that includes replacement if the AMOLED screen exhibits any color shifts, which turned out to be a major problem with the XEL-1.
So how will Sony enter the 55-inch AMOLED-TV war? The Korea Times reported in early February that, following the dissolution of its joint panel-making venture with Samsung, Sony is increasing its LCD panel purchases from LG Display. And, an LGD official said that forthcoming discussions will cover sales of AMOLED-TV panels, according to the Korea Times.
There are reports that LG Display’s Gen 8 AMOLED fab will be able to ramp up to 48,000 55-inch panels per month. Will that be enough to satisfy LG’s initial needs, as well as Sony’s? Initial sales are speculative, particularly since initial prices are expected to be high.
What is clear, though, is that the world’s three largest TV makers are convinced that large-screen AMOLED-TV is going to be the next big thing.
Ken Werner is Principal of Nutmeg Consultants, specializing in the display industry and display technology.
Posted by Pete Putman, February 27, 2012 1:34 PM
About Pete PutmanPeter Putman is the president of ROAM Consulting L.L.C. His company provides training, marketing communications, and product testing/development services to manufacturers, dealers, and end-users of displays, display interfaces, and related products.
Pete edits and publishes HDTVexpert.com, a Web blog focused on digital TV, HDTV, and display technologies. He is also a columnist for Pro AV magazine, the leading trade publication for commercial AV systems integrators.