By Kim Yoo-chul
Samsung Electronics and LG Electronics are planning to tap more marketability in ultra-thinner television sets using organic display technology by spending a sizable amount of money for an initial investment.
"Samsung Mobile Display (SMD), a joint venture between Samsung Electronics and Samsung SDI in organic panels, is reviewing the possibility to build an OLED line in Tangjeong, South Chungcheong Province, by using 5.5th-generation technology for organic panels to be used over 30-inch such TVs," a high-ranking industry source said Monday.
"The initial investment would be 1.5 trillion won. The 5.5-generation technology is optimized to produce organic panels with a measurement of 1320 millimeters X 1500 millimeters," according to the official.
SMD spokesmen said the company has been deep in work over marketability and profitability while producing organic panels for TVs, and added the investment size is subject to such panel demand from our bigger clients such as Samsung Electronics, Sony and Sharp.
SMD, led by CEO Kang Ho-moon, is producing 20,000 OLED panels on a monthly basis by applying fourth-generation technology in its complex in the provincial city.
SMD currently controls the global AM OLED panel market with its market share of some 90 percent, market research firms say.
Samsung, which has been enjoying buoyant sales of its LCD TVs with light emitting-diode (LED) backlighting since the introduction of such sets early this year, is forecasting the mass market for the next-generation TVs to be opened sometime in 2012.
Active-matrix organic light-emitting diode (AM-OLED) displays, which use self-glowing materials, have better picture quality, consume less power and are thinner than widely used liquid crystal displays (LCD) that need backlight units.
But higher price has kept it from becoming a mass-produced technology in the market dominated by cheaper LCD panels. OLED screens are making stable inroads into high-end mobile phones but costs to apply the technology to PCs and TVs are still prohibitive.
"Costs still matter for mass OLED market. The one clear reason for the success of LED TV is the result of competitive prices ― just 20-percent higher than the current LCD TVs in the same models," an executive at Samsung Electronics said.
LG Electronics made the local debut of its 15-inch OLED TV set this week, the largest commercial model so far. LG executives say more groundwork has been stepping up for a bigger stake in the next-generation TVs.
LG Display, a panel supplement unit of LG Electronics, has engaged in deep internal talks to build 5.5-generation OLED line in its LCD complex in Paju, Gyeonggi Province, with the launch timing being set for the first half of 2011, according to LG and industry sources.
They say the initial volume target was 40,000 sheets on a monthly basis. LG officials say the clear path toward OLED display will pave the way for the world's second-biggest LCD panel maker to find a massive breakthrough in its key and traditional business.
"LG Display will invest more in organic displays. But the timing is dependent on how the market finds an uprising momentum," an LG Display spokesman said. LG Display is currently led by CEO Kwon Young-soo.
Attractive Market, Price Matters
Beyond the obvious attribute of superior image quality, AM-OLEDs have a very slim form factor. They also consume much less power than LCDs, making them attractive to environmentally conscious consumers.
Global revenue from shipments of OLED panels for use in televisions will surge to $1.8 billion in 2015, up from $10 million in 2009.
Analysts say this will make television the biggest revenue-generating application for OLED panels in 2015, surpassing the much higher-volume market of main displays for cell phones.
But the major barriers for the OLED TV market include limited manufacturing, technological and quality challenges and the increasing competitiveness of LCDs, market research firm iSuppli said.
"There currently is no investment in fabs capable of producing larger AM-OLED panels that can compete directly with the most popular LCD-TV sizes," according to the firm.
"Lifetime issues are also a concern, with large-sized AM-OLED TV sets' operational life constrained by the OLED material performance and differential aging of the various materials in the display," it said, adding AM OLEDs also suffer from image sticking, a phenomenon that leaves an artifact on a screen after a static image is displayed too long.
LG's latest 15-inch OLED TV will be sold for 3 million won per unit in the South Korean market.
Previously, Japan's Sony launched the world's first OLED TV in late 2007 at that time but hasn't followed with new models yet mainly due to such drawbacks.
"That's why TV makers' positions are highly significant to lower the set prices and boom the market," another Samsung executive said.