22 Nov 2011
As Europe sinks money into organic electronics research, multiple Chinese companies are investing heavily in both development and mass production.
A multitude of Chinese companies investing heavily in the production of active-matrix organic LED (AMOLED) displays will find it tough to challenge the market leader Samsung over the next few years, according to a new market brief from the analyst firm IHS iSuppli.
Overall, the market for these displays is expected by iSuppli to grow from $2.5 billion this year (73.7 million units) to $7.3 billion in 2015 (and 297.3 million units). And the technology promises to be one of the few bright spots in consumer electronics in the short term. The market will grow 55% this year, iSuppli says, with a 110% expansion in 2012 set to be followed by double-digit expansion until the middle of the decade.
Vinita Jakhanwal, director of small and medium-sized displays at the market research company, writes in the brief: “In turning its attention to AMOLED, China plans to be a significant supplier and gain greater influence in the overall mobile display industry…with assurances of capital investment from both Beijing and at local government levels, China could well become an important player in the AMOLED space.”
Market and tech challenges
But to do that, emerging Chinese manufacturers face some major challenges, not least in the form of Samsung and its stranglehold on the current market – although LCD screens still dominate in handset displays, with a 95% share, Jakhanwal points out that Samsung is responsible for 92% of the AMOLED display market, using the technology in a number of its leading smart phone and tablet products. The technology also features in Nokia, HTC and Motorola handsets, although not in any Apple products as yet.
There are also some significant technological challenges, according to the analyst. “The crystallization process for AMOLED produces low yields when compared to those for conventional LCDs, hindering the capacity of an AMOLED fab to effectively meet market demand and price,” she writes. “A related factor, the evaporation process, is an expensive element of AMOLED production that suppliers must incur.”
Jakhanwal highlights the plans of four separate Chinese companies looking to move into mass production in the next couple of years as evidence of the forthcoming expansion of AMOLED suppliers in the wider market as it grows quickly.
“With their eyes on the prize, Chinese companies are spending substantial amounts of capital on the construction of fabs for manufacturing AMOLED panels, along with research and development on the technology,” notes the analyst.
They include Beijing-based BOE Technology Group, which is making the largest investment, worth some $3.4 billion. Irico Electronics Group is building two fabs that are expected to start mass production next year, with a third slated for a ramp-up in 2014. Tianma Microelectronics will begin AMOLED production at its site in Shanghai next year, while Visionox will follow suit in 2013, says Jakhanwal.
But the analyst warns that those manufacturers must be ready to devote a lot of time to develop and refine AMOLED production to ensure good manufacturing yields and cost efficiencies. “The lengthy time involved could mean a delay in the recouping of financial investments,” she said.
It isn’t just China that is trying to muscle in on the future market for organic electronics. Around €70 million in total funding is being spent over the next few years through call 7 of the European Commission’s Seventh Framework Programme on next-generation photonics and organic electronics technologies, with funded projects ranging from development of OLED microdisplays and production of OLEDs on foil, to roll-to-roll manufacturing of organic photovoltaic cells and modules.
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