jdi tft display made in china

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TOKYO -- Japan Display will sell its China-based subsidiary Suzhou JDI Electronics to a local buyer, the money-losing Japanese panel maker said Friday, as it continues to shed assets in a sweeping overhaul.

Suzhou Dongshan Precision Manufacturing Co. will buy all of Suzhou JDI Electronics for 20.5 billion yen ($140 million) in a transaction to be completed between January and March 2023.

Japan Display Inc. (JDI) has developed the world’s first flexible tactile sensor that enables high-precision measurement over a wide area using a matrix of LTPS TFTs (lowtemperature polysilicon thin-film transistors).

Highly accurate tactile measurement is required for the development of a number of new technologies and products, as well as for advanced sports and medical research. JDI’s flexible tactile sensor is suitable for a wide range of applications, such as measuring the grip strength of a robot grasping an object or the pressure distribution on the sole...

In response to strong customer demand, Japan Display Inc. (JDI) has further developed its breakthrough transparent Rælclear display technology and expects to begin mass production of a new 20.8-inch Rælclear display with 2X brightness in the fall of 2023.

With the world’s highest display transparency, Rælclear is a revolutionary display technology with glass-like transparency and sharp and vivid images fully visible from both the display’s front and back. Rælclear’s name was born from its unique two-way transparency: starting from t...

Accelerating the development of new display technologies is the goal for worldwide display manufacturers and some of them have decided to sell or buy new facilities as a move to approach their target.

Samsung Display has sold its LCD factory in China to Chinese display maker CSOT, a company under TCL group, to further cut down its LCD capacity, which goes in line with Samsung’s plan to quit LCD business. By ending its LCD panel production, Samsung aims to expand its development in QD displays and OLED displays. The Korean giant has also reportedly t...

Japan Display (JDI) is going to sell its LCD plant in Hakusan, Japan, to Sharp and Apple, so that the Japanese display maker can pay off its debt to Apple. The total transfer price is estimated to be JPY 71 billion (US$ 672 million).

The plant will be transferred to Sharp, who is also a display supplier of Apple, by the end of September. With the transaction, Sharp will take over most of the debt of JDI which JDI borrowed from Apple when building the plant. The plant was originally built for supplying LCD panels for iPhone. But S...

Sharp, one of the panel providers of Apple, is reportedly developing small size Micro LED displays and will mass produce the products by 2023 for eye-wear smart devices, reported Nikkan Kogyo Shimbun.

According to the report, Sharp Fukuyama Semiconductor, a subsidiary of Sharp, has developed Micro LED prototypes including a 0.38-inch full color panel featuring 1053 PPI and a 0.13-inch blue display with 3000 PPI. The company deploys its proprietary color conversion technology to achieve full color display and aims to mass produce the products in 2023 to 2024 for A...

Japan Display announced that the company has been involved in improper accounting treatment with a total padded operating profit of JPY 8.2 billion (US$ 76.12 million) in the past six years since 2014, when the company was listed on the first section of the Tokyo Stock Exchange. The company was investigated by a third-party committee and revealed the results on April 13, 2020.

The investigation showed that JDI recorded fictitious inventory of JPY 10 billion (US$92.86 million) in total since the fourth quarter of fiscal 2013. The investigation also...

Japan Display (JDI) announced the development of a Micro LED display. The prototype Micro LED display will be presented at “FINTECH JAPAN 2019,” which is taking place in Makuhari Messe from December 4 to 6, 2019. The 1.6-inch Micro LED display of JDI is based on LTPS backplane developed by the company and Micro LED chips from glō, a Micro LED technology provider. The display achieves a resolution of 265 ppi with a pixel number of 300*300. (Image: JDI) JDI also noted that the Micro LED display has a wide viewin...

Mini LED backlight solution seems to be a “must have” technology for all the panel exhibitors at this year’s Display Week. Despite that adopting Mini LED backlight to consumer electronic products is rather difficult due to high production cost; panel makers still proactively demonstrated related products. Therefore, Mini LED backlight might not be a flash in the pan. LEDinside noticed that almost every display maker participated in Display Week disclosed the focus on automotive display incorporating LCD panel and Mini LED backlight. The solut...

Japan Display Inc. (JDI) has been negotiating with Chinese companies and investors to receive financial supports of JPY 50 billion (US$ 440.65 million), reported NHK. The potential investors include mobile component producer Ofilm, automotive component manufacturer Minth Group and the Silk Road Fund.

With the support, the Chinese investors will hold 33 percent or more of the share of JDI, suppressing the current major shareholder INCJ, who owns 25.29 percent of the share. In addition to the investment, the Chinese investors were also reportedly offering a ...

LEDinside forecasts that the development of Mini LED will accelerate in 2019 and 2020 and its market value will reach US$ 1699 million by 2022. Several industry players including San’an, HC Semitek, Epistar, NationStar, Harvatek, and Macroblock have reported their progress of Mini LED development. Meanwhile, panel producers such as AUO, BOE, Innolux and JDI have also unveiled applications adopting Mini LED technology.

During Display Week 2018, many big giants have been simultaneously releasing Mini LED backlight products. LEDinside found those Mini LED panels majorly adopt direct-type local dimming and support HDR mode, making the vivid contract ratio, which can compete with OLED panel.

Japan Display Inc. (JDI) announced that it has developed a transparent glass-based capacitive fingerprint sensor by applying the company"s capacitive multi-touch technology used in its other liquid crystal displays (LCDs). JDI plans to start commercial shipments within its 2018 fiscal year, which ends March of 2019.

Appearing to be strapped for cash, smartphone screen manufacturer Japan Display (JDI) is currently in talks with Chinese panel makers, including BOE, Tianma, and CSOT, over an investment more than USD 1.8 billion. The Japanese company hopes to seal the deal by the end of March 2018, reported Kyodo News.

The Japanese digital panel giant Japan Display Inc. (JDI) had a struggle revamping its liquid crystal display (LCD) panel business. To make the recovery happen, JDI planned to accept fundings from outside investors. Not only that, JDI will restructure LCD panel production sites, and lay off employees at a large scale, slashing about 4,000 jobs, according to Nikkei"s report on August 8.

It has been spreading like crazy that in 2H17 three iPhone models- the high-end iPhone 8 featuring an OLED display, iPhone 7s and iPhone 7s Plus that continue to use LCD displays- will hit the shelves. Latest sources leaked Apple might increase OLED display use in its products and all the three new iPhones to roll out in 2018 are likely to sport OLED displays. That possibly implies orders Apple places with LCD display providers Sharp and Japan Display Inc. (JDI) would plummet. It will be much of a shock to JDI which earns over 50% of its revenue from Apple’s phone screen demand.

Sumitomo Chemical, the Japan-based chemical giant, is reported to have successfully developed new technologies to facilitate more cost efficient OLED display manufacture. According to Nikkei, the new materials and equipment the company introduced could possibly bring down the current production cost of OLED panels by 50%, which is able to further reduce the selling prices of OLED TVs and expand the penetration of OLED products.

Japan Display Inc. (JDI) announced the commencement of mass production at its newly-constructed low temperature poly-silicon (LTPS) LCD line in its Hakusan Plant, located in Hakusan City, Ishikawa Prefecture, Japan. JDI had been preparing for mass production since Dec. 1, and commenced mass production on Dec. 23.

Small to mid-sized display manufacturer Japan Display Inc. (JDI) third quarter financial results were in the red, due to lower demands than expected from Chinese clients and its largest client Apple, reported Chinese-language media Money DJ.

LCD display manufacturer Japan Display Inc. (JDI) developed an ultra-thin bezel LCD that is merely millimeters thick, which could greatly increase smartphone makers design flexibility, reported Nikkei.

Sharp President Tai Jeng-wu told The Nikkei and other reporters that it intended to collaborate with Japan Display Inc. (JDI) in the development of OLED displays to catch up with Korean competitors Samsung.

Japan Display Inc. (JDI), a manufactuerr of small to mid-sized LCD displays issued a statement on Saturday refuting claims made by Nikkeiand other media that it was seeking financial support from INCJ.

Innovation Network Corporation of Japan (“INCJ”), Japan Display Inc. (“JDI”), Sony Corporation (“Sony”), and Panasonic Corporation (“Panasonic”) announced hat they have executed a definitive agreement to establish a new company, JOLED Inc. (“JOLED”), to integrate Sony and Panasonic’s R&D functions for organic light-emitting diode (“OLED”) display panels. Through this collaboration, the companies aim to accelerate the development and early commercialization of OLED display panels. JOLED is scheduled to be launched in January 2015, subject to receipt of any necessary approvals.

Japan Display Inc.(株式会社ジャパンディスプレイ, Kabushiki-gaisha Japan Disupurei), commonly called by its abbreviated name, JDI, is the Japanese display technology joint venture formed by the merger of the small and medium-sized liquid crystal display businesses of Sony, Toshiba, and Hitachi.

JDI had accumulated consecutive losses since its IPO, a restructuring plan was announced in 2017, including closing down a production line in Japan and layoffs of approximately a third of its workforce.

A newly-created entity INCJ, Ltd. had become the largest shareholder of JDI with 25,29 % of total shares since September 21, 2018 as a result of a corporate split of the old INCJ.

On June 12, 2019, JDI disclosed that major changes are to be implemented due to sluggish sales in the Mobile Business Division. It announced one plant would be closed and another has suspended operation. A major reduction of the workforce was also planned.Apple, boosting the stock price of JDI by 32 percent at the time.

On December 26, it officially entered talks to sell its plant in Hakusan, Ishikawa to Sharp Corporation for 80 to 90 billion yen which is about US$800 million, with a plan to avail the profit to the repayment of the loan made by Apple whose investment partially funded the construction of the plant.OLED displays.

Due to the financial trouble caused by its late decision to manufacture OLED displays and the loan from Apple, the company"s OLED affiliate, JOLED, has not yet been able to compete with other manufacturers, whilst more than half of JDI"s revenue still came from the shrinking IPS LCD panel sales to Apple.

In February 2020, Ichigo Asset management, a multinational private investment fund, gained control of JDI in exchange for US$715 million of investment. In turn, the memorandum signed with Suwa a year before was terminated.

In April 2020, in accordance with the talks held in December, JDI began to sell LCD production equipment valued at US$200 million to Apple, with plans to sell the real estate of the Hakusan plant to Sharp. This will allow JDI to focus on its remaining product demand and factories. The sales have been completed by October.

In July 2020, the CEO of JDI revealed the company"s plan to start mass production of OLED display panels for smartphones "as early as 2022" with a novel manufacturing technology, adding that it would require new funding.

JDI has produced active-matrix displays driven by TFTs based on a In-Plane-Switching technology developed by Hitachi also has been used. The company has developed an improvement for darker black pixels (true-black appearance), called "IPS-NEO", which reduces the light shining through from the backlighting.

Its "Pixel Eyes" technology incorporates the touch function into the LCD panel itself; combined with the company"s transparent display technology, a transparent fingerprint reader that could be featured in smartphones was announced in 2018.

For reflective LCDs without backlighting, JDI has developed an addressing technique using a thin-film memory device SRAM in addition to the conventional TFT for each pixel, so that a still image can be stored consuming a low amount of energy.

In December 2019, it announced that it has developed a 1.6-inch microLED display module with a pixel density of 265 ppi and a peak brightness of 3,000 nits, which can be assembled to form a large screen.

JDI"s deep panel technology is a great opportunity for China to acquire JDI as the leading panel production technology in China that will help make China"s panel industry a panel innovator as well as a leader in Samsung OLED Panel production technology.

It is reported that Japan"s JDI, which is increasingly in trouble, is in the process of negotiating with the top three panel makers in China, BOE, Huaxing Optoelectronics, Shen Tian Ma, etc., for a total investment of 1.8 billion U.S. dollars to ease its capital dilemma. This will have To help Chinese panel makers get ahead of Samsung"s OLED panel production technology.

However, in the panel technology, China lags behind South Korea and Japan. Samsung and LG are respectively the largest small and medium size OLED and large-size OLED panel makers in the world. Japan"s JDI has more advanced OLED panel production technology and the deep Pegasus and BOE put OLED panels at the end of June and the end of October last year respectively, while Huaxing, another large panel manufacturer in Mainland China, is expected to put OLED panels into operation until the second quarter of 2019. China urgently needs to work hard to achieve its success in OLED panel technology. JDI just has such a technology.

Later, the operation of the troubled Sony, Toshiba, Hitachi three companies to their small and medium size LCD panel business restructuring and the Japanese government-owned fund industry innovation agency (INCJ) joint venture set up to run the JDI, JDI and Sharp was the world"s largest, The second largest small and medium size LCD panel supplier, but today the world"s largest supplier of small and medium size panels for the Samsung, Samsung rely mainly on its dominant AMOLED panel made the first small and medium size panel supplier status, while the second largest medium and small size Panel suppliers, the largest supplier of LCD panels in mainland China is the BOE.

Recalling this period of history to know JDI has a profound accumulation of panel technology, JDI also acquired by Sony, Panasonic OLED panel business and INCJ-led JOLED joint venture. JDI is currently using "vapor deposition (in the vacuum state, the red, green, blue and other luminescent materials vapor deposition attached to the substrate)" technology to produce OLED panels, and JOLED has more advanced production of OLED panel printing technology, Printing technology is more advanced than the evaporation technology, production costs are about 30% lower.

As the three panel makers in China, BOE and Shenzhen Tianma just put OLED panels into operation. It is not until 2019 that China Star Optoelectronics can put OLED panels into operation. When Chinese panel makers start large-scale production of OLED panels, they may well meet as early as a few years TFT-LCD panel fierce price war, which is obviously unfavorable for the Chinese panel companies, if this can be achieved through cooperation with the JDI more advanced, lower production costs OLED panel production technology, will help the Chinese panel companies Competition with Korean panel companies.

For JDI, JDI itself needs continuous capital injection. JDI, which has been losing money consecutively, has invested 75 billion yen in 2016, but its business has not seen any improvement. Today, it needs hundreds of billions of yen to expand the production capacity of OLED panels, and It is likely that the industry will continue to make huge losses due to the price war in the OLED panel in the future, leaving the industry reform agency hesitated, thereby forcing JDI to seek capital contributions from other investors. This leads to the introduction of the investment in Chinese panel companies mentioned at the beginning of this article.

For mainland China, investing in JDI is clearly a bargain, which will help transform the Chinese panel industry from follower to panel innovator. After all, the dilemma faced by JDI is now running out of steam and getting investment from Chinese panel companies will also help it expand its market in China and improve its own business. This is a win-win cooperation.

After becoming the largest manufacturing economy in the world, mainland China is devoting itself to economic restructuring. As one of the upstream industries, the panel industry has drawn great attention. The panel industry in mainland China is indeed not disappointing, from poor and white to now the world"s second only took 14 years to prove the ability of the panel industry in mainland China, if the investment can be achieved with the JDI, mainland China panel Industry will rise again.

Japan Display (JDI – a joint venture of Sony, Toshiba and Hitachi) and Sharp, two leading manufacturers of smartphone panels, found themselves in a situation where they had to adapt to the competition coming out of China from shops like TPV, Hisense, and Haier, or risk getting crushed.

According to industry sources in Taiwan, JDI and Sharp are getting into a price war on bids to smartphone manufacturers like ZTE, Huawei, and TCL (makers of Alcatel-branded mobile phones) who continue to expand their reach out of China and into other developing markets with ever increasing higher-quality smartphones. JDI and Sharp are aggressively courting the companies and have apparently scaled for production and have cut prices on TFT LCD panels for use in high-spec devices.

Japan Display (JDI) announced the development of a 21.3-inch 5mega-pixel monochrome LCD (2048 × 2560ppi) with High-brightness and High-contrast ratio TFT display made by Dual-cell (*1) technology.

In the medical field, displays are required to have accurate image quality with, high-brightness, and high-contrast for the best image diagnosis. JDI has developed a 21.3-inch high resolution (5mega-pixel) monochrome TFT display incorporating our new Dual-cell technology to meet the needs for higher performance displays required by the medical market demands.

JDI devised the LCD structure to control dimming of the panel to solve double images and missing images due to viewing angles and a halo effects caused by the combination of a reducing parallax and an optimization of the dimming area. The result greatly improves the display quality that can then be applied as a medical diagnostic solution.

To achieve such high-definition image quality and high brightness, JDI utilizes LTPS technology for wide viewing angles and high contrast by means of IPS liquid crystal.

Japan Display (6740.JP), in keeping with its goal of reducing costs to bring the company back to profitability, has sold its display module facility in Suzhou to a Chinese OEM, converting fixed costs to variable. The module plant, which was incorporated in 1996, takes raw (‘open cell’) panels produced by JDI and adds backlighting, a frame, and a number of other components to create a display that can be used in a device. The subsidiary had annual sales between $394m and $487m over the last three years, but had net margins of 0.6% to 2.8% over the same period. The sale price, which is subject to a final audit, is ~$139m, which represents ~32.2% of the average of sales over the last three years. The sale is expected to be completed sometime between January and March of next year as it must be approved by a number of government organizations, and JDI will continue to use the module plant as a customer of the buyer, DSBJ (002384.CH), an OEM and assembler based in Suzhou.

While the last few years have been quite difficult for Japan Display as its primary customer, Apple (AAPL) has converted from LCD displays to OLED displays for its iPhone line, with JDI having little or no OLED capacity[1]. The company brought in Scott Callon, the Chairman of Ichigo (2337.JP), and the investment firm that bailed out JDI in 2020, as Chairman and CEO in to guide the company toward a new business model. Since then the new JDI management has closed one of four JDI LCD fabs in Japan and sold another module facility to Wistron (3231.TT) and while the company is still losing money on a quarterly basis the losses are considerably smaller than in the past and the company’s product portfolio is more oriented toward newer technology where JDI has an edge. All in, while it is both a difficult display environment and a hard road toward profitability, JDI seems to be making considerable progress toward regaining some of the statue the company had as a major supplier of small panel displays years ago.

Last week we noted that demand for small panel (primarily smartphone applications) rigid OLED displays in 2Q was considerably below expectations (missed by 25.9%), coming in down 19.5% q/q and down 33.2% y/y. Much of the small panel OLED demand shortfall came from Samsung Electronics (005930.KS) and Xiaomi (1810.HK), and has led to expectations for 3Q small panel OLED rigid demand to decline by 25.9% q/q and by 46.5% y/y. While these are certainly concerning data points, we also noted that small panel rigid OLED displays are an increasingly smaller part of overall small panel OLED displays, falling to 38.6% in 2Q and averaging 40.1% in 1H after 2021’s average of 44.0%, which puts the focus more specifically on small panel flexible OLED displays for a better understanding of demand for the smartphone OLED display market.

Now that we have full demand data for small panel flexible OLED displays, we note that the results for flexible OLED displays in 2Q was only off by 1.9% putting 2Q composite small panel OLED demand 12.85% below expectations, not a great number but certainly better than the rigid miss. As can be seen in the table below, while both Apple (AAPL) and Vivo (pvt) came in above small panel flexible OLED expectations, Apple represented 49.6% of actual small panel flexible OLED demand in 2Q and was the only brand that saw better than expected results in the composite, with the composite itself being down 13.6% q/q and down 3.4% y/y.

All in, another weak quarter for smartphones continues to put a damper on small panel OLED growth, despite an increasing share of the overall smartphone market, with Apple the only substantial standout. As the iPhone 14 series was announced on September 7, much of the 3Q actual results will rest on the new iPhone line’s popularity during the last 15 days of the month, and based on those results, Apple will determine it order rate for 4Q. In 2020 and 2021 Apple increased orders q/q in 4Q (11.9% and 71.5% respectively) while the y/y increase was less than 1%. While we expect Apple is optimistic about customer demand for the iPhone 14 series, we assume they will temper that enthusiasm a bit as the macro-economic situation continues to weigh on consumer spending, which would lead us to expect Apple’s full year small panel OLED demand to be ~200m units, up 9.8% y/y. Given that almost all of Apple’s iPhone models (old and new) are OLED, this gives a good approximation of Apple’s 2022 display demand, which should translate into shipments, less build and transport timing and existing inventory.

​Chinastar (pvt), a subsidiary of TCL (000100.CH), celebrated the opening of its T9 LCD display fab in Guangzhou, China last week, with considerable fanfare and the usual ‘glorious’ description of how the new fab, along with Chinastar’s T8 OLED fab that is under construction, will push Guangzhou to become the display capital of the world, generating over $35b US, up from $25.3b that was generated in 2019[1]. The T9 fab however, will not be in mass production until 3Q ’23, running what we expect to be two 30,000 Gen 8.6 sheet/month lines at the onset. Phase two of the project, another two 30,000 sheet/month lines are expected to become producers in mid to late 2024, while plans for phase 3, another two 30,000 sheet/month lines are a bit too far out for speculation.

The T9 fab will be initially producing IT panels, automotive displays, and PID (public information displays), but is also expected to, at some point, incorporate an ink-jet printing line, along with the T8 fab. We expect the IJP line will be used for Mini/Micro-LED products at T9, while for OLED materials at T8, although actual IJP based displays at Chinastar are still at the technical demo stage. Both fabs are expected to be producing IGZO backplanes for the displays they produce and the T9 fab, which is expected to cost upwards of $5b US, will have a module production facility in the complex to take the open cell panels and create display modules that can be sold to OEMs..

Note that Figure 1 shows Chinastar’s large panel sales and Gen 8+ capacity (dotted line), with large panel LCD industry sales scaled to match Chinastar’s January 2019 sales. Chinastar’s growth through 2021 has been based on the company’s ability to fully utilize the new capacity it has added over that time period, however since the beginning of the year sales have declined rapidly as utilization rates for existing Gen 8+ fabs declined. The industry has seen sales for large panel LCD displays decline by 32.3% since the end of 2021 while Chinastar has seen sales decline 39.3% over the same period.

While the celebration ahead of actual production is typical, given the current circumstances in the display space, the addition of new LCD capacity, especially Gen 8 type capacity is of little use to an industry that is facing low utilization rates at many Gen 8 and Gen 10 fabs due to weak demand. Chinastar, now the 2nd largest LCD panel producer in China (19.3% sales share) and the 5th largest (sales) globally (9.3% global sales share) as of August of this year, so we would expect to see sales continue to increase next year as the T9 fab begins production. That said, a continuation of weak overall display demand next year, T9 could prove to be a significant burden on the company as it will be difficult to fil the new lines along with added depreciation. Under that scenario, we would expect the phase 2 schedule to be slowed, but with a year between now and the planned phase 2 opening date there are a lot of parameters that could change.

In order to meet the competition in the display space, panel producers must spend substantial sums to develop new technologies and processes and as timelines for the development and implementation of new display technologies grows shorter, risk levels increase. Panel producers, in many cases are forced to pick a leading edge technology, sometimes before it has been proven to be feasible from a mass production standpoint, or take the approach of researching as many new display technologies as possible. While both approaches carry considerable risk, there are only a select few that can take the later approach, as the cost of spreading R&D across a number of technologies yields little in terms of breakthroughs. Large panel producers allocate between 7% and 8% of revenue to R&D while smaller producers allocate as much as 25+%, but the dollar values are so much smaller that the effect is negligible. Samsung Electronics (005930.KS) spent $15.85b on R&D last year, and while that covers Samsung Display (pvt), the company’s semiconductor business, and all other segments. Smaller panel producer Visionox (002387.CH)spent 23% of sales on R&D, or $635m.

As we noted in Part I, historically, the display industry has tended to focus on one major technology advance at a time, which, when proven commercially viable, became the immediate focus for large panel producers and a later focus for smaller producers unless it happened to be one that the smaller producer had chosen as their ‘go to’ R&D project, such as Sharp’s (6753.JP) development of IGZO that resulted in its lead in the technology starting back in late 2012. However, with the number of new potential display technologies being developed, and the potentially shorter timelines to a final mass production decision, the decision for smaller panel producers is more toward developing new product categories using existing infrastructure than it is developing new display technology. In some cases the development of new product categories does entail new equipment or process changes, but most new product categories can be based on existing process lines or minor modifications, with more research done on the development of a marketing strategy and developing new customer relationships than leading edge technology.

The display industry has in the past categorized display panel products as ‘large’ and ‘small’, essentially categorizing large as panels over 10” (diagonal) and small as anything under 10”, with ‘large’ categories broken down into monitors, notebooks, and TV panels, and the ‘small’ category representing primarily feature phones (inexpensive with few features) and smartphones. Over the years those categories became more defined, especially as OLED technology became a significant part of the ‘small’ category. With the first LCD display on a phone appearing in 1994 (see Figure 5), LCD panel producers increased LCD display size, colors, and quality until OLED smartphones displays became a new category for ‘small’ displays back in 2005, although all small OLED displays were ‘rigid’ in that they were based on a glass substrate. That changed in 2010 when Samsung Display released the 1st flexible OLED display used in the Galaxy Note Edge and only 4 years later when Samsung released the first commercial foldable smartphone display, the Galaxy Z Fold.

The timelines between these technology milestones continues to contract, which makes the R&D process even more critical to both large and small panel producers, with Figure 4 representing only small panel displays. Large panel displays have undergone similar technology changes and now face a multitude of potential game changing display technologies that are at various stages of development toward commercialization. With only a few panel producers able to spend the R&D dollars necessary to examine all of those potential display technologies, smaller panel producers are taking the ‘road less traveled’ and building out new display applications such as automotive or ultra high-resolution displays, especially as more generic panel categories see declining prices. We expect this ‘bifurcation’ in the display space to continue as Samsung Display, LG Display (LPL), and BOE (200725.CH) push technological boundaries, and smaller panel producers more toward niche product development, with the pace of change in both regards, continuing to increase.

Based on the dire headlines in the display trade press, focused on massive utilization cuts at LCD panel producers, we were expecting very depressing results from producers in August. “Lowest utilization levels in history”, and similar stories set the tone for disastrous shipment numbers for panel producers in August and we played along mentally preparing for the worst. As it turns out both from a sales standpoint and a shipment standpoint, August was not nearly as catastrophic as we thought, with large panel combined shipments declining only 1.3% m/m although down 18.1% y/y. August large panel LCD sales declined 5.7%, while prices dropped 5.2% for the month, which indicates that the impact of the shipment decline was partially offset by an improvement in mix ASP.

Notebook shipments declined 10.1% m/m and 41.9% y/y and as monitor panel shipments did not peak until December of last year, the y/y comparisons will likely remain weak and while monitor shipments are certainly below any month in 2021 they are still above the lows of 2020 when the pandemic began. Monitor shipments declined 8.4% m/m and declined 25.3% y/y in August, while tablet shipments increased by 2.5% m/m and declined 3.1% y/y, seeming to hold shipment levels relatively consistent this year. On a regional basis, while South Korean producers saw the biggest shipment decline m/m in August in terms of revenue (-8.2%), it is hard to disaggregate both Samsung Display’s (pvt) and LG Display’s (LPL) large panel capacity reduction plans from the effect of utilization cuts. Taiwan saw a 6.7% reduction in panel revenue, a bit more in line with the industry m/m revenue decline of 5.7%, while Chinese producers, where much of the utilization attention has been focused, saw a 4.0% revenue reduction m/m. On a y/y basis Taiwan was down 55.9%, Korea down 9.8%, Japan down 22.1% and China down37.6% against the combined industry sales being down 37.0%. For reference, the only panel producer that had a positive m/m sales ROC was HKC (+13.1%), although still down 11.4% y/y. Samsung Display also had a positive August sales ROC but it is likely only from large panel lines that are in the wind-down process and represents only 0.19% of industry large panel LCD sales.

​As the display industry matures, display production becomes increasingly application specific, with broad segment headers like ‘TV’ or ‘IT’ becoming anachronistic, and sub-categories becoming the only way panel producers can differentiate themselves from each other. There are many ‘large panel’ and ‘small panel’ display producers, but even if you are a leader in a particular panel application, the competition can be quite intense and the inherent cyclicality of the industry, devastating to profitability. As that cyclicality peaks, as it did in July of last year, panel producers try to narrow their focus on those applications or processes that carry the highest premiums. While this is a viable strategy in the near-term, LCD fabs are not always designed or equipped to make those changes, which means capital cost and becoming part of a queue for equipment delivery. In some cases, by the time the equipment is delivered and the production changes are made, that particular application niche becomes crowed with other producers and premiums disappear, which belies the strategy’s positive effect on profitability.

The alternative is to approach the panel business as one that anticipates rather than follows the application trends, and while this is a seemingly obvious path, it presents its own challenges and risks. First, the research involved in advancing display technology usually starts on a small scale, typically a lab project that takes an idea and produces a small scale ‘proof of concept’ device or process that either solves existing display technology limitations, or makes a step toward a new basic display technology or ‘flavor’ of an existing one. This is a tricky stage as the researchers will likely aggressively promote the merits of the idea, citing a variety of reasons why and how it can scale to a mass production level, while process engineers must build a model that can quantify the cost, potential scale problems, and the availability of the equipment necessary to build out such capacity, with product marketing trying to figure out whether there is or will be a market for the application best served by the technology and whether it is sustainable enough to justify the cost.

If a project makes it through the POC stage, it will typically move to the construction of a pilot line, a small line that gives process engineers a taste of how the scale model will transfer to production on a physical basis. Such lines are variable in that they usually undergo modifications as process bottlenecks and problems occur, with panel producers working with equipment vendors as to the feasibility, cost, and timelines needed to bring up a full mass production line. If the display process seems practical, a few samples will be made on the pilot line to be shown to key customers to see if they spark enough interest to validate the expansion to mass production.

To this point, the cost of the project is typically buried in R&D expenses, however if the project seems practical and there is customer interest, C-level decision acceptance of moving the model to mass production status begins a far more substantial capital budget process. Given that the cost of even a small mass production display line can cost hundreds of millions to billions, the risks involved in such a decision can exceed the resources of many panel producers or stress the level of profitability across the entire company. What makes this even more difficult currently is that there are a number of emerging display technologies that are vying for capital, all hoping to become the basis for the display supply chain over the next few years, which increases the risk of picking the wrong technology or application even higher than in past years for smaller panel producers, and spreading R&D too thin for larger panel producers.

LCD technology has been the basis for the display industry for many years and advances in LCD process technology continue to be made however as that technology has matured it becomes more difficult for those advances to be substantial , which forces LCD panel producers to look for premiums by finding niche products where competition is less onerous. Years ago LTPS (Low temperature Poly-Silicon) was the TFT backplane process that was touted as the replacement for a-Si (Amorphous Silicon) that had been used since LCD production began, and many panel producers converted TFT lines to the new technology to capitalize on its benefits, especially in small panel production. This transition took years for many panel producers, so those who anticipated the transition were able to capitalize on the premiums afforded the new technology.

In 2012 Sharp (6753.JP) began production of a new TFT backplane technology based on IGZO (Indium Gallium Zinc Oxide) that promised to improve LCD backplane technology once again, and while this technology was more difficult to master from a process standpoint, larger panel producers began to adopt IGZO for specific panel applications, while small producers were still working toward LTPS adoption. In 2014 Apple (AAPL) commissioned the use of another TFT backplane technology in the Apple Watch Series 4, and while this technology, which is a combination of LTPD and IGZO, is to be Apple’s ‘goto’ mobile display technology, there are only a few panel producers able to produce the technology, with Samsung Display (pvt) the only current commercial provider for smartphones and similar devices.

While Apple will likely have 2 or 3 LTPO suppliers in 2023, smaller panel producers will be years behind, with many still working toward adopting IGZO, with the timeline between each iteration of this one aspect of LCD technology becoming shorter. Without the most current backplane technology smaller producers will find it difficult to gain access to major CE brands and will be forced to focus on more generic panel technologies, which are far more cyclical. As noted this is just one aspect of display technology and one that is rarely in the public eye, so early development cycles were able to be long as demand from consumers was relatively minor, but as ‘front of display’ technologies, such as OLED, began to gain public traction, the time-to-market for each new display technology ‘leap’ became compressed.

In Part II of “Alternatives” we look at some of the more recent display technologies that are vying for R&D and capacity expansion dollars and how smaller panel producers are being forced to adopt the ‘niche-or-die’ strategy mentioned above. Stay tuned.

​Samsung Display (pvt), an affiliate of Samsung Electronics (005930.KS), and the world’s largest producer of small panel OLED, has sold roughly 2,000 patents to Chinastar (pvt) a subsidiary of China’s TCL (000100.CH), a company in which Samsung has a 12.3% stake. That stake was acquired as part of the 8/31/20 sale of its 60% stake in its Gen 8.5 LCD fab in Suzhou to Chinastar for $1.08b US. In the patent package were 577 US patents owned by Samsung Display and to put that number in perspective Samsung Display has 18,860 US patents and 3,968 US patent applications, with 325 applications and 1,731 with “Liquid Crystal Display” in the title. The price of the sale, which could have been done piecemeal, was not disclosed, although it will eventually show up in SDC’s financials, and given the company’s new revelation as to compensating those who were responsible for the IP when it is monetized, more detail will eventually show up in the footnotes.

As Samsung Display made the decision to end the production of large panel LCD displays back in 2020 and has slowly sold or shuttered all of its large panel LCD fabs, selling line equipment and converting some to small and potentially large panel OLED production, along with the company’s OLED derivative. QD/OLED, monetizing these IP assets are a logical path for SDC. TCL/Chinastar will now have a broader IP platform under which it can more conclusively defend itself during IP litigation, while typical agreements call for the previous patent owner to be grandfathered against new litigation.

The question however, is whether Chinastar will use the extended portfolio against Chinese rival BOE (200725.CH), the largest panel producer in China, as a tool to limit BOE’s competitive ability, a practice relatively common in the display space and certainly in the CE space, and one that gains momentum as the financials of panel producers deteriorate. The problem here would be that litigation against BOE by Chinastar could be taken as a tacit challenge from Samsung Display and potentially from Samsung Electronics, who purchases large panel LCD product from both Chinastar and BOE, given the links back to both Samsung entities. For now things are quiet, but we expect TCL’s lawyers are review all of the new IP to see if it pertains to existing litigation and whether it can generate new legal challenges going forward.