With the race for leadership in the next-generation display market between Korea, Japan and even Taiwan getting increasingly fierce, signals of a market reshuffle are looming large at Samsung Electronics and LG Electronics.
Compared to the current mainstream liquid crystal display (LCD) panel with a known contrast ratio of 1,000:1 or a plasma panel with 20,000:1, an active-matrix light-emitting diode (AM OLED) panel is said to have more than a 1,000,000:1 contrast ratio. Moreover, the display can handle fast motion, such as movement in video games, very smoothly, analysts say.
Response time is 1,000 times faster than LCDs, reducing after-image production. Unlike LCDs, an AM OLED panel doesn't require backlighting.
This results in displays about 30 percent thinner than LCDs, coupled with the consumption of about 40 percent less power. Additionally, the technology for AM OLED panels has become robust and cost-competitive.
Market researcher iSuppli said in May it expects global shipments of AM OLED panels to nearly quadruple this year to 10.2 million, with sales reaching $225 million.
Samsung Electronics, the world's No. 1 LCD panel and LCD TV set maker, is close to setting up a 50:50 joint venture with its sister company Samsung SDI in the AM OLED display business.
The venture, tentatively named ``Samsung Mobile Display,'' still needs final approval from the board and Samsung sources say this decision will come on July 25.
Samsung Electronics is also opting either to combine its mobile LCD business unit with the envisioned joint venture or send it to Samsung SDI’s mobile display business Unit.
"As far as I know, Yoon Jin-hyuck, vice president of Samsung Electronics mobile LCD business unit was tentatively named as the new chief of the Samsung Mobile Display," a high-ranking Samsung executive said, Thursday.
"We are now tasked with creating synergy for better profits from small- and medium-sized electronic devices equipped with next-generation displays," he said, adding the venture aims to produce AM OLED panels less than 10 inches in size.
LG Display, formerly known as LG.Philips LCD, plans to spend up to 100 billion won this year in upgrading its AM OLED facilities either at its LCD complex in Paju, Gyeonggi Province, or a factory in Gumi, North Gyeongsang Province.
To foster this business, the company separated AM OLED research and development (R& D), and production and sales organization from its Mobile Business Division, two months ago.
LG's LCD Display business organization was restructured into a mobile LCD Internet Technology/Television division and four AM OLED divisions.
"A sense of crisis is spreading as the business model, under which Samsung Electronics, Samsung SDI and LG Electronics and LG Display have been operating independently, is poised to shift into a race. The reshuffle in the display sector is due to AM OLED," said an official from LG Display.
Also, the Korea Display Industry Association plans to commence a project to develop evaporators for AM OLED joined by Samsung, LG and other local equipment makers. To date, the association has been leading the R&D into lighting materials for AM OLED through an OLED subcommittee.
Japan: No More Failure
In order to beat their Korean rivals and regain past glory as global leaders in the display segment, leading Japanese display makers recently formed a united front with support from the Japanese government.
Sony, Sharp, Toshiba and Panasonic joined forces in the development of technology for the mass production of larger-sized AM OLED panels over 40 inches financed by the Ministry of Economy, Trade and Industry.
They hope to complete the development of the technology for the manufacture of large AM OLED panels in 2012.
In April, Chi Mei Optoelectronics (CMO), the No. 2 LCD panel supplier in Taiwan, decided to invest an additional $32.57 million into its subsidiary Chi Mei Corporation (CMEL) to expand its AM OLED capacity.
CMO said that the capital injection will be utilized to set up a second AM OLED production line at CMEL, which is scheduled to begin mass production in the second half of this year.
"The key factors determining the success of AM OLED in the market will be the display industry’s capability to address key issues like manufacturing costs, material lifetime and efficiency," Vinita Jakhanwal, the principal analyst for mobile displays at iSuppli said.
"Furthermore, given that AM OLEDs are LCD replacements, the technology will at least initially be subject to price pressure placed on it by competing LCD panel products."
