This is not a new trend. In 2018 there was also renewed interest for rigid OLED around Q3, after slow sales of iPhone X products. The interest went down again around Q4 2018. This trend may have several implications for the industry such as price pressure for LTPS especially in a declining smartphone market, pushing LTPS products more towards the low end and reducing the opportunity for future miniLED based products.
Higher Utilization Rates for Rigid OLED
DSCC reported in its June blog that rigid OLED fab utilization rates stayed at more than 80% level in March, April and May, up from 60% in February. According to DSCC, rigid OLED demand drivers included a reduced price gap with LTPS LCD, larger screen sizes for 2019 models such as the Galaxy A series, and multiple Chinese brands' aggressive pricing for new smartphone models to boost growth and increase market share.
Rigid OLED display first came to smartphones through Samsung, and was chosen because they had a thinner, lighter form factor, better viewing angles, higher contrast and faster response time than the LCDs previously used. OLED served mostly the high-end and mid-range markets with limited market share. But the demand changed with introduction of flexible OLED displays.
Flexible displays gained higher acceptance with Samsung’s Galaxy products with the new curved design (Edge design). It reached the highest level of interest with Apple’s decision’s to use flexible OLED display for the iPhone X in 2017. All other smartphone brands also wanted to emulate Apple and focused their design on flexible displays. Most of the new suppliers from China decided to focus on flexible OLED production. Market interest shifted from rigid to flexible and demand also shifted.
After lower than expected sales of the iPhone X especially in early 2018, the industry’s interest shifted to rigid OLED displays. By the end of 2018 Q4 demand and fab utilization rates went down again. According to DSCC information in June 2019, “flexible OLED fab utilization continues to lag, but we expect a modest uptick in June to 42% utilization rates after four months in the 30s”. Similar trends of renewed interest in rigid OLED have been seen again in 2019 after weaker demand for Apple iPhones. According to some industry news sources, the supply of rigid OLED panels for smartphones are getting a little tight due to the integration of in-display fingerprint sensors.
Slow Sales for Flexible OLED display
Samsung’s Q1 2019 result showed a quarterly loss in the display panel business due to decreased demand for flexible displays and increasing market supplies of large displays. The company planned to focus on improved earnings by boosting sales of rigid OLEDs and offering differentiated products featuring new technology such as Infinity Display and fingerprint-on-display. In a slow smartphone market, higher priced products with flexible OLED displays are facing demand challenges. Samsung as well as many China brands are looking at rigid OLED displays to meet lower price point midrange market demand.
Reduced Price gap with LTPS LCD
Rigid OLED display cost has the potential to come closer to LTPS LCD’s cost level, especially for Samsung Display. But new suppliers will face cost challenges. The possibility of a lower price gap with LTPS LCD combined with the advantages of OLED is bringing renewed interest in rigid OLEDs. According to industry estimates, the price gaps with LTPS LCD are expected to decline to $4 to $6 in 2019, down from $9 to $10 in 2018.
Samsung Display has increased its utilization rates in recent months bringing in higher production volume. Samsung Display is the largest supplier of rigid OLED displays with a majority share of the market and Samsung Galaxy products are the biggest consumer of rigid OLEDs. Suppliers from China such as Tianma, EDO, and Visionox are starting to increase production.
Still, there exist many challenges such as: not enough suppliers are focusing on rigid OLED and most of the new planned capacities from China are for flexible displays. There is very little design differentiation between LTPS LCD and rigid OLED smartphones due to 18:9 full active bezel-less screen designs.
New designs and features for Rigid OLED
LTPS LCD is facing price pressure due to slower demand and rigid OLED price reductions, but makers are still pushing the technology to add new features and capabilities. Suppliers are working on full screen in-cell fingerprint LTPS LCDs as well as hole in-cell touch capability to compete with OLED in the smartphone market. Rigid OLED is also using in-display finger print sensors for premium models. Flexible OLED is shifting to blind hole and hole through architectures. Chinese brands are planning to adopt blind hole or hole through designs using LTPS LCDs. Apple is adopting COF (Chip on Film) for LTPS LCD and flexible OLED. Chinese brands are adopting COF for both LTPS LCD and rigid OLED.
Reducing opportunity for future miniLED based products
MiniLED backlight options are coming to LTPS LCD, offering higher contrast (by using local area dimming), faster response times, and reducing the performance gap with OLED. That is why suppliers such as AUO, BOE, Tianma and many others showcased prototypes of miniLED-based products at Display Week 2019. In spite of display performance advantages, miniLED based products still face cost challenges to make them competitive in the smartphone market. In the near term, suppliers are focusing more on value-based applications such as gaming monitors, automotive and VR. LTPS LCD with miniLED backlight’s price points need to be between rigid OLED and regular LTPS LCD to be competitive. The reduced price gap with rigid OLED in 2019 is reducing the opportunity for a miniLED entrance in smartphones this year. If costs can be reduced in the future, the technology may offer strong competition to rigid OLED in the next few years.
Slower smart Phone market needs mid range products
According to IDC’s press release in May 2019, “global smartphone shipments will face another challenging year in 2019 with volume forecasted to decline 1.9% from 2018. This will mark the third consecutive year of market contraction driven by highly saturated markets in developed countries and slower churn in some developing economies”. IDC also reported, “In all markets, pricing remains a critical decision factor when purchasing a new handset, and this is creating new opportunities for mid range price points”. Samsung and other Chinese brands have been introducing models with mid-range price points and rigid OLED panels meeting those price point requirements. LTPS LCD is mostly focusing on mid-range and lower end products. With more price pressure LTPS may have to compete with a-Si LCD at the low end.
Lower prices, lower price gaps with LTPS, larger sizes, new designs, and meeting mid-range price requirements will bring new opportunities for rigid OLED. But challenges such as tight supply, not enough fab capacity, very little design differentiation with LTPS LCD, and the future entrance of miniLED backlight may lead to limited demand for rigid OLED in future years.
Sweta Dash, President, Dash-Insights
Sweta Dash is the founding president of Dash-Insights, a market research and consulting company specializing in the display industry. For more information, contact firstname.lastname@example.org or visit www.dash-insight.com