AMOLED Panel Growth to be Driven by Smartphones

Featuring better energy-efficiency, lighter weight and wider color spectrum than typical displays, AMOLED (active matrix organic light emitting diode) is widely regarded as yet another upgrade in display technology to effectively add value to the consumer electronics segment.

Topology Research Institute (TRI), a Taiwanese market researcher, indicated that AMOLED is mainly applied to sub-9-inch screens or generally considered small and medium-sized display panels, most of which are used in handheld devices as smartphones. So based on steady, strong growth in the global market for smartphones, the market researcher estimates global shipment of AMOLED-based panels to surge 117% to over 170 million units this year from 80.5 million units shipped in 2011.

Handsets to Fuel Growth

Although a majority of handset panels shipped in 2011 worldwide were sub-200ppi-definition models as a-Si TFT LCD (thin film transistor liquid crystal display) panels, TRI believes that high-definition handset panels ranging from 200ppi to 350ppi will increasingly replace low-definition models starting in 2012, to command over half of the market in 2014 or 2015.

In addition to AMOLED, higher-definition display technologies also include LG Display's WOLED (white OLED), Samsung Mobile Display's LITI (laser induced thermal imaging), and FMM (fine metal mask), technologies dominated by SMD, Sony and Taiwan's AU Optronics Corp. and Chimei Innolux Corp. and can produce panels with rated-definition up to 330ppi.

In fact, AMOLED panels still can be improved in terms of production cost, luminous efficiency, lifespan and yield rates, deficiencies of which may suppress shipment volume growth to some extent in the short-term, emphasized TRI. For instance, AMOLED panels cost US$45-US$55 per unit to produce, far higher than US$29 of the major competitors boasting LTPS (Low Temperature Poly-silicon) TFT LCD technology.

However, global handset brand vendors' tendency to adopt the newest, top-end display technologies may still generate explosive growth in AMOLED panels despite the higher cost. But TRI said that the definition LTPS TFT LCD panels varies proportionally with needed power to drive backlights in handsets, a relationship that

is politically-incorrect in this age of eco-awareness and would work against promotions in markets with high proportions of consumers whose buying decisions are actually influenced by the green movement than fad. In comparison, AMOLED panels outperform LTPS TFT LCD models in both energy efficiency and definition, hence being brand vendors' favorite options, especially when 4-inch-and-bigger handset panels are gradually upgraded with higher definition, to 400ppi.

TRI furthered that global demand for AMOLED panels reached about US$3.5 billion in 2011, contributing only about 4% to the overall output value of flat displays, or 11% of the total shipment of 9-inch-and-below display panels in value. But, buoyed by smartphones, the market demand is very likely to exceed US$20 billion by 2018.

Korean Makers Dominate

The rise of smartphones, TRI said, actually generates ample opportunities for growth for AMOLED panels, a segment occupied by many makers but mostly dominated by Korean companies.

SMD has a 97% share of the segment to lead in small- and medium-sized AMOLED panels. To take on domestic peers in the marketplace, LGD has turned to medium and large-sized models to gain a big share. The bottom-line is the two Korean electronics giants dwarf the Taiwanese counterparts, including AUO and Chimei Innolux, even if they start mass production of AMOLED panels in the second quarter or second half of this year.

The major reason that Taiwanese makers can hardly compete against the two Korean rivals is, TRI stressed, the relatively weaker deployment in supply of key materials and components, production equipment and technology patents.

AMOLED panels have no need for backlight modules, with depreciation on manufacturing equipment bought and organic light-emitting materials used amounting to 43% and 26%, respectively, of total production costs. In short, to catch up with Korean competitors, Taiwanese manufacturers will have to emphasize securing supplies of production facilities and key materials to achieve competitively, lower production costs, TRI stated.

Hopeful

Over the past years, SMD and LGD, with governmental support, have been developing AMOLED applications, with the former leading the global industry. TRI said that SMD has switched fabrication of small and medium-sized AMOLED panels to 8.5-generation lines from 4.5-generation ones, enabling the maker to achieve higher economy-of-scale in production.

Korean government's strenuous efforts to bolster development of a sound AMOLED industry has also generated rewards, with some makers now able to roll out different kinds of materials, and others able to produce high-precision production facilities for domestic production. In contrast, and still the age-old problem is that Taiwanese AMOLED panel makers still rely on import of facilities and key materials from Japan, the U.S. and Europe.

Despite such overwhelming odds, TRI feels that light remains at the end of the tunnel for Taiwanese makers. One strategy the market researcher suggests is to switch production of AMOLED panels to existing fabrication lines of TFT LCD models, including TFT substrates, enabling higher output quickly and efficiently to narrow the gap between Korean and Taiwanese makers.

Additionally, TRI also urges Taiwanese makers to step up investment in R&D on proactive technologies in line with ever-changing market trends, including for instance better transparency and flexibility of AMOLED panels, which helps to build core competencies to challenge Korean rivals. (SC, May 2012)

Estimated Number of AMOLED Panels Used Worldwide by Application
Application	2011	2012	2013	2014	2015
Handsets	80.5 M.	175 M.	225 M.	325 M.	375 M.
Entertainment Devices	4 0 M.	13.5 M.	14.85 M.	16.335 M.	17.15 M.
Digital Cameras	2.9 M.	3.95 M.	5.8 M.	7.8 M.	9.75 M.
Tablet PCs	0.2 M.	2.5 M.	4.5 M.	6.5 M.	8.5 M.
Electronic Viewfinder	0.33 M.	1.65 M.	1.7 M.	1.74 M.	1.8 M.
Monitors	----	0.07 M.	0.195 M.	0.32 M.	0.5 M.
OLED-backlit TVs	----	0.1 M.	0.25 M.	1.0 M	3.0 M.
Head-mounted Displays	0.15 M.	0.35 M.	0.45 M.	0.5 M.	0.525 M.
Car-mounted Displays	----	----	0.2 M.	0.6 M.	0.95 M.
Others	0.015 M.	0.05 M.	0.1 M.	0.275 M.	0.475 M.

Source: Topology Research Institute