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By Kim Yoo-chul
Staff Reporter
Samsung SDI, the first mass producer of the next-generation of active-matrix organic light-emitting diodes (AM OLED), hopes to stamp its authority as an unbeatable player in the highly promising market. And the company is on the right track toward that goal.
``The OLED market has virtually reached an economy of scale that we haven't seen before,'' Chung Ho-kyoon, vice president of the company said, adding his company will increase the production yield of its AM OLED panels by 80 percent within this year.
Production yield is a key indicator in assessing the prospect of a component manufacturing business as the term shows how reliably the maker can meet demands from clients.
``Medium- and large-sized display devices such as monitors, laptops and television sets will get the OLED treatment in 2009 and 2010, which is good news for consumers,'' Lee said.
The company expects to achieve a production capacity of three million 2-inch OLED panels by late this year ― double the current capacity ― and of six million in 2009.
According to DisplaySearch, a U.S.-based market research firm, Samsung SDI took 60 percent in the global AM OLED market in terms of sales. Taiwan-based Ritdisplay followed with 12.8 percent.
Samsung SDI, which is also the world's No. 2 maker of plasma display panels, trimmed its operating loss in the first three months of this year thanks to the solid price of plasma panels and a rising demand for slimmer cathode-tube TV sets.
``We forecast a better performance in the second quarter and a turnaround in the third quarter thanks to strong sales of flat-screen TVs and rechargeable batteries,'' a company spokesman Lee Kyung-sang said.
Net loss for the first quarter was 30.6 billion won, compared with a loss of 77.2 billion won a year earlier and a 273.9-billion won loss in the previous quarter.
On a consolidated basis ― which includes its overseas operations ― sales rose 24 percent from a year ago to 1.42 trillion won from 1.15 trillion won, but fell 7 percent from the previous quarter's 1.53 trillion won.
Attractive 'Cash Cow'
Global flat-screen manufacturers such as Samsung Electronics, LG Electronics and Japan's Sony have been injecting massive amounts of cash into the AM OLED market, believing that mobile phones, laptops, MP3 players, TVs and even electronic billboards will use this next-generation display.
Samsung and LG Electronics have already been introducing mobile phones equipped with AM OLED panels made by Samsung SDI. Nokia, the world's No. 1 handset maker, plans to commercialize its new premium AM OLED Mobile phone, named the ``Nokia 6600 Fold,'' in the third quarter of this year.
Even Sony is set to invest some 22 billion yen in the medium- and large-sized OLED race as it sees a bright future in the TV market. Samsung Electronics and Toshiba earlier clarified that they will introduce AM OLED TV sets by 2010.
``We will ship 14-inch AM OLED panels for TVs later this year,'' its spokesperson said.
Industry experts say the yield and the lifetime of AM OLED panels will improve, and much of its commercial success will depend on Samsung SDI's ability to move onto larger sizes.
OLED displays consist of two types ― passive matrix organic light-emitting diode (PM OLED) and AM OLED. The PM type was the first to be commercialized but display makers are shifting to AM OLED as the PM application was confined only to small devices such as MP3 players because of technological limits.
Compared to a flat-panel LCD television with a known actual contrast ratio (ACR) of 1,000:1 or a plasma TV with 20,000:1, an AM OLED TV is said to have more than a 1,000,000:1 ACR. Moreover, the displays can handle fast motion such as the movement in video games very smoothly.
Its response time is 1,000 times faster than that of LCD, reducing the production of after images. Unlike the currently mainstream LCD, AM OLED does not require pricey backlighting.
This results in about 30 percent thinner displays than LCD, while consuming 40 percent less power. Additionally, AM OLED have become a robust and cost-competitive technology.
Without considering these market-driven factors, AM OLED has an irresistible attraction for the display industry as it could be manufactured in the form of flexible or near-flexible sheets, pushing TV makers to roll out screens for televisions by the meter.
For these advantages, market analysts have generally agreed this promising display type will eventually phase out flat-panel LCD and plasma televisions in a few years.
The global AM OLED market is expected to rise to 119 million in 2011, from seven million in 2007, according to DisplaySearch.
``Since mass production started, we have so far grabbed 748 patents out of a total 2,613 in 2007,'' Lee said, citing data from OLEDnet.
Rechargeable Battery Another Key
Samsung SDI is now diversifying its business portfolios to the battery sector. The company is the world's third-biggest maker of secondary cells.
``As announced, we will supply our latest lithium-ion batteries to U.S.-based computer makers including Dell and Hewlett-Packard from July this year,'' Seo Hae-su, an official from the company said.
The battery, which will be used in laptop and ultra mobile PCs, has 7.7 percent more capacity, 10 percent more in-use-time and is quicker than the 2,600 mAh (milli ampere hour) rechargeable batteries mainly used in portable PCs.
``We will maintain our leadership in the market by introducing a 3,000 mAh rechargeable battery as soon as the demand for high-capacity secondary cells increases in line with greater consumer appetite for portable electronic gadgets,'' Seo said.
Industry sources expect the demand for lithium-ion rechargeable batteries to reach 2.85 billion cells in 2008, an increase of 18 percent from the previous year, while demand for secondary cells for PCs will also rise 22 percent.
To propel the business, Samsung SDI recently decided to invest 106.8 billion won to increase production at its plant.
The investment will be used to make two additional lines for secondary cells in its plant in Cheonan, South Chungcheong Province, with production timing slated for July 2009.
Samsung SDI competes with its local rival LG Chem and Japan's Sony. LG Chem has said it expected its Ochang plant to start production again in two to three months.
yckim@koreatimes.co.kr
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