Market Insight

[Display Dynamics] Three issues surrounding the AMOLED market in 2015

January 16, 2015

Jerry Kang Jerry Kang Senior Principal Analyst, Emerging Display Technologies & OLED

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Three issues: Low-end AMOLED, diversified demands, and flexible OLED


Key findings

  • The low-end active matrix organic light emitting diode (AMOLED) experimented by Samsung Display Co. (SDC) will accelerate customer diversification and prevent pursuit of late-coming AMOLED manufacturers.
  • Attempts to diversify demands will continue, along with some noticeable moves like targeting automotive, industrial, and other niche markets.
  • In 2015, companies will continue struggling to achieve reliability and perfection of the applications that adopt a flexible organic light emitting diode (OLED), and the portion of flexible OLED will exceed 10% of the total volume of AMOLED shipments. 


In 2014, the AMOLED panel industry was apparently baffled by an unexpected dip in demand. Many of the flagship smartphones featuring AMOLED were not welcome in the market, and AMOLED for TVs and tablets, though launched as an ambitious bid, also fell flat due to its weak price competitiveness not matching up to that of liquid crystal display (LCD). 

That is why the year 2015 is going to be a very important year for the AMOLED panel industry. First of all, it would need to regain the lost pride in the smartphone panel market and strengthen the price competitiveness of the AMOLED for TV and tablet use. More fundamentally, a revolutionary change in strategy is needed to change the paradigm in the display market, as it is currently dominated by LCD. All in all, the AMOLED panel industry should bid farewell to the old market strategy and come up with and experiment with a new one in 2015. 


How formidable is the low-end AMOLED?

Low-end AMOLED had been anticipated since the latter half of 2013, since the growth of high-end smartphone market slowed down and there needed to be a new product to target mid- and low-end smartphones. However, the low-end AMOLED also had some limitations: even though they belonged in the low-end bracket in the full range of AMOLED products, low-priced AMOLED panels were still more expensive than LCDs.
For example, a low-end on-cell touch screen panel (TSP) AMOLED released this year was priced higher than an in-cell TSP Low-Temperature Polycrystalline Silicon (LTPS) LCD with the same size and same resolution. When smartphones of same bill of materials (BOM) cost are compared to look at how the cost breakdown changes with different displays, AMOLED is still costlier than LTPS LCD and will thus be a burdensome choice for some set makers that are sensitive to price competitiveness.

For those set makers that put more value on hardware performance than on BOM cost, the low-end AMOLED is surely an attractive solution for its significantly better color reproduction, response time, and contrast ratio than the LCD. Naturally, demand for low-end AMOLEDs will increase mainly thanks to such set makers wanting to expand their market share in the mid-range smartphone market through differentiated hardware. If AMOLEDs are to be used more widely in the mid-range segment, their rate of adoption will eventually increase in the high-end smartphone market as well. 

Wider use of low-end AMOLEDs will have a significant influence on many panel makers preparing to mass-produce AMOLED panels. For those makers that are about to begin mass-production, low-priced AMOLED from their competitors could weaken their product’s price competitiveness, which, in turn, would make their AMOLED business less viable or even cause a delay in the long run in the late entry into the business. On the bright side, though, set makes, concerned about SDC’s possible monopoly as might be brought about by expanded use of AMOLEDs, could appoint late-coming AMOLED manufacturers as their second vendors. However, only those manufacturers with stable yield rate and cost structure will stand to benefit. This means that next year, companies that are intending to actively pursue the AMOLED panel business will be clearly set apart from those that are not.


Will it be possible to decrease the dependence on smartphone demand?

The AMOLED panel market grew explosively along with the growth of the high-end smartphone market. As noted earlier, however, the stagnant high-end smartphone market hit the AMOLED industry hard, which underscored the fact that the industry had been too dependent on the smartphone market as a major source of demand. It can be seen from the statistics since 2011 on the AMOLED panel shipments by application that not a single quarter has passed without smartphone panels taking up more than 90%. 

In fact, the AMOLED panel industry has been trying to diversify the sources of demand away from the smartphone to, say, tablet, TV, and wearable devices. However, such attempts did not go far enough because of some of the innate problems of the AMOLED panel, which are “the higher price than the LCD panel” and “the concern over the useful life shortened by burn-in.” Expanding demand will not be difficult if these two issues are to be resolved, but they are not easy problems to solve. 

The price issue, which has a lot to do with the materials cost and the yield rate, will not be cleared away for some years to come, though panels for smartphones will be an exception. Moreover, the ever increasing trend towards large and high-resolution panels will make it harder to achieve a competitive level of price for AMOLED panels. 

The short lifespan issue is unavoidable with displays using organic materials, and is still a problem with even smartphone panels. The situation can be worse with tablets and TVs, because their replacement cycle is normally longer than smartphones. One surest way to address this issue would be to significantly extend the useful life of the organic materials, but that is not going to be easily attainable in the short term. 

All in all, in order for the AMOLED industry to become less dependent on smartphones, the cost needs to be lowered to a level competitive with the cost of LCD, while the useful life gets prolonged. However, it is not an easy task, as noted earlier, and therefore achieving less dependence on smartphones will not be possible in the near term. Still, there are areas where conventional displays are not optically or mechanically feasible, such as in expert-level monitors requiring high color reproduction and contrast ratio, automotive displays in which fast response time is critical, and wearable displays. It would be wise to pursue these niches rather than trying to find an ample source of demand to solidify the OLED’s unique position. 


Will flexible OLED be able to radically change the display market?

Over the last one to two years, AMOLED panel makers, thinking that flexible OLED will revolutionize the display industry in the future, have rushed to unveil new concept products. They will continue to concentrate their development efforts on flexible OLEDs in 2015, leading flexible OLEDs to take up over 10% of the global AMOLED shipments. 

So far, the flexible OLED has been used in smartphones and wearable devices to highlight the ergonomic features of the application by providing a curved design, to enable a bendable or foldable structure, or to provide an edge display as a supplement to the main one. In order to determine how these applications can bring revolutionary changes to the display market, it would be needed to investigate how flexible OLEDs can contribute to boosting the utility and/or to making the applications more perfect.

A fixed curved panel offers a user with a more comfortable experience when gripping or wearing a device. However, as the display, or the main part of the device, is curved, it leaves less flat room for other components like circuit and battery to be properly configured. An edge display, which is a type of curved display, is provided on the side of the device and thus minimizes such intrusion on the flat space while still delivering a function separate from the main display. Nonetheless, it is doubtful whether controlling the edge display, which is no wider than the smartphone’s thickness, normally measuring 10 millimeters or thinner, is more convenient than controlling the much larger main display. 

There is a more advanced form of flexible OLED products, which are really flexible. A bendable product, for one, carries a smaller risk of being shattered by external pressure as when the person sits on a chair with the device in his pocket. In this case, however, it would be crucial that other components like the cover window, circuit board, parts, battery, and case are reliably bendable as well. A foldable product has a relative advantage over the bendable type in that the display can be made larger while the area affected by the folding, which is in the middle, is minimized. However, given the contraction and expansion accompanying the act of folding which occur on the internal and external surfaces of the display, it would be essential to achieve a foldable form of cover window and touch panel as well. 

In sum, boosting demand for the flexible OLEDs will not be possible unless it is ensured that the surrounding components work reliably enough to make the application function seamlessly. Also, it should be reminded that unless customers are convinced that the use of a flexible OLED is necessary, the device using a flexible OLED can soon begin to lose favor with consumers.






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