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26 Feb 2024
OLED materials pioneer saw sales drop in 2023, but is confident of growing adoption in foldable phones, TVs, and cars.
Universal Display Corporation (UDC), the New Jersey developer of organic LED (OLED) materials and deposition processes, says it is expecting around a 10 per cent rise in annual sales this year, as the light-emitting technology finds a wider range of applications.
While still associated with smart phone displays and high-end TVs primarily, OLEDs are now being tipped by UDC for wider adoption in cars, laptops and tablet PCs, and foldable electronic devices developed by key customers like Samsung and China’s BOE Technology.
Having just posted annual sales of $576 million for 2023, CEO Steve Abramson and his team are expecting that total to rise to somewhere between $625 million and $675 million this year.
Despite the 2023 total representing a decline of around 7 per cent on the previous year’s figure - reflecting the wider downturn in sales of smart phone and premium TVs - UDC remains highly profitable, and posted annual pre-tax income of $245 million, down from $268 million in 2022.
New OLED fabs
Discussing the latest results and outlook with investors, Abramson highlighted the massive investments in the next generation of OLED fabrication facilities currently being made in Korea and China: notably Samsung’s $3 billion effort and the first phase of BOE’s anticipated $9 billion project. Last November, UDC and BOE signed a long-term licensing agreement.
“These new plants are slated to begin production in 2026,” said the CEO. “We believe that we are embarking on an exciting new multi-year capital expenditure cycle, and anticipate additional new OLED fab investment announcements.”
Those investments are being driven by expectations of much broader market penetration by OLEDs across key applications, with Abramson noting the start of a new adoption cycle in the IT sector.
He said that included further penetration in smart phones, including the rise of foldable units, as well as in OLED TVs, the “burgeoning” market for OLEDs in automotive applications, plus wider deployment in augmented and virtual reality wearables, gaming, and signage.
“We estimate that OLED penetration in the smart phone market will increase from today's approximately 50 per cent to 65 per cent in 2030,” Abramson told investors.
“For foldable smart phones, TrendForce forecasted shipments will increase from 18.3 million units in 2023 to approximately 70 million units in 2027, capturing about 5 per cent of the smart phone market.”
TV and automotive growth forecasts
Meanwhile, Omdia has forecast very rapid growth in both OLED tablet and laptop PC shipments, with the likes of Lenovo, HP, Dell, Asus, and Xiaomi adopting the technology into their PC product portfolios.
“We expect the trend to continue,” said Abramson. “OLED makes up an estimated 2 per cent of today's global PC and tablet market, but by 2030 that penetration rate is expected to increase to approximately 20 per cent.”
That forecast does not include OLED-based PC monitors, which are tipped to jump from around 1 million units to 5 million units annually.
For TVs, Abramson cited further Omdia research suggesting that shipments will increase at a compound annual growth rate (CAGR) of 11 per cent through 2030, to reach approximately 12 million units by then.
In automotive applications, the rate of growth is expected to be much higher. “The automotive OLED market is a nascent opportunity where momentum is beginning to build,” said the CEO, with a CAGR of 42 per cent and 30 million units sold in 2030.
“From an OLED capacity standpoint, the proliferation of OLEDs in these diverse market verticals is expected to drive utilization rates up and prompt new OLED capacity to be built.”
Into the blue
While UDC has pioneered the development of OLED materials for close to three decades, one technology it has always lacked is a blue emitter. But that could finally change this year, with Abramson saying:
“We continue to believe that we are on-track to introduce a phosphorescent blue that meets commercial specifications into the market in 2024.
“We believe the expansion of our phosphorescent portfolio that includes red, green, and blue phosphorescent emissive materials will unlock a vast array of opportunities for higher energy efficiency and higher performance across a broad range of OLED applications.”
• Despite the upbeat market assessment, UDC’s stock price tumbled in value by around 8 per cent on the Nasdaq following the update. However, the latest trading price of around $173 still represents a market capitalization in the region of $8 billion.
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