OLED expecting a plenitude after Apple’s cut down of its iPhone X production due to weak demand in the market. This led Samsung electronics to search for new customers for its organic light-emitting diode panels. Samsung had hiked up its production of OLED panels to meet the demand for the latest iPhone, being iPhone X to be the first model to incorporate the panels. This has put Samsung puzzled with an excess production of OLED following the cut down of iPhone X production.
This saddling condition is even getting worse as the companies who were expected by Samsung electronics, to incorporate OLED panels, are seemingly slow to make the transition to OLED panels due to the expense and they are continuing to stick on to liquid crystal displays (LCDs). This condition will even get worse as the Chinese OLED panel makers are also expanding their products which can heat up the price competitive market. An official at an electronics trading company in Tokyo declared that Samsung is increasingly selling OLED panels to outside clients. Due to the sluggish sale of iPhone X, the production of these iPhones are expected to drop by half in the first three months of this year of over 40 million units from an initial estimate.
A price of $100 per unit including touch sensors has been charged for Samsung’s OLED panels for smartphones. But this is twice the price charged for LCDs that are used in iPhone 8 Plus, which is also supplied by Samsung. This high cost may be one of the reasons for the high cost of $999 or more for iPhone X. This panel can display the colors in high resolution and can be bent to narrow the phone’s bezel. Being the dominant OLED market player, Samsung will find it difficult to expand the sales of its smartphones equipped with expensive panels. According to a British research company, HIS Markit, OLED smartphone panels which Samsung internally sources for its own smartphones fell year on year in 2017. Using the OLED panels make the phone much expensive which in turn result in difficulty to compete with rivals on price.
The midrange smartphone manufacturers who cannot adopt the rising costs by passing them on to customers are avoiding adopting OLED panels. Only 5-10% of smartphones produced by Oppo and Vivo, China’s major smartphone makers, are using OLED panels and this makes these phones very expensive. Around 40% increase in cost can be expected for such OLED panels than LCD panels that are made of low-temperature polysilicon which helps to show colors clearly.
Due to the sluggish demand from smartphone makers and the increased production of OLED panels have forced in the falling down of price for rigid type panels on glass substrates. The supply capacity is expected to grow across the globe. South Korea’s LG Display is all set to launch a new production line as early as possible this year.
China’s BOE Technology Group and Tianma Microelectronics have launched new factories with the assistance of government subsidies. Compared to the 2017 level, the overall production capacity is expected to double by 2020. Also Samsung’s dominance in OLED smartphone panel market, for over 95% will probably be lost.