By Kim Yoo-chul
Fitch Ratings expects Apple may introduce a new iPhone with organic light-emitting diode (OLED) technology.
"Apple could use OLED panels in its phones, which may further boost demand for the panels, although additional capital spending would be needed to meet incremental demand," Shelley Jang, director at Fitch, said in a report to clients, Wednesday.
"The cost of small OLED panels is decreasing at a faster-than-expected rate due to yield improvements, and is now similar to the cost of LCDs."
The global credit ratings agency said OLED adoption is likely to be much faster in high-end phones than larger displays used in TVs because of the lower cost differential in smaller panels with LCDs.
"We expect the OLED market share gain against LCD panels to accelerate in the short term, especially in the smartphone sector," she said.
OLED displays offer sharper images and more colors than LCDs, having a lighter and slimmer form-factor and a faster response time. OLED displays also offer more design flexibility as screens can be curved.
"These features of OLED panels will drive demand in the mobile phone sector where consumers select smartphones based mainly on hardware design," the director added.
Currently only Samsung Electronics uses mostly OLED displays in its Galaxy smartphones, which Fitch believes is a benefit of vertical integration.
But Fitch said cost still matters for the faster adoption of OLED TVs in the market.
"Transition to OLED technology in the TV sector is likely to be slower than in the mobile sector as costs remain high relative to LCD, given the lower production volume and yields," she said.
OLED TVs accounted for just 0.2 percent of global TV shipments and 1.3 percent of total revenue in 2015, according to market research company IHS.
"A sharper decrease in LCD panel prices may further delay penetration of OLED," she said.
A solid demand for OLED displays will benefit both LG and Samsung Display, Jang said.
"We expect the increased adoption of OLED technology to provide a buffer against downside risks from the LCD supply glut and help sustain the business profiles of the two Korean display giants," she said.
"We believe Korean companies are likely to retain their current lead in OLED technology. Chinese, Taiwanese and Japanese competitors will have to endure several years of startup losses and substantial capital investment to catch up."
Fitch Ratings expects Apple may introduce a new iPhone with organic light-emitting diode (OLED) technology.
"Apple could use OLED panels in its phones, which may further boost demand for the panels, although additional capital spending would be needed to meet incremental demand," Shelley Jang, director at Fitch, said in a report to clients, Wednesday.
"The cost of small OLED panels is decreasing at a faster-than-expected rate due to yield improvements, and is now similar to the cost of LCDs."
The global credit ratings agency said OLED adoption is likely to be much faster in high-end phones than larger displays used in TVs because of the lower cost differential in smaller panels with LCDs.
"We expect the OLED market share gain against LCD panels to accelerate in the short term, especially in the smartphone sector," she said.
OLED displays offer sharper images and more colors than LCDs, having a lighter and slimmer form-factor and a faster response time. OLED displays also offer more design flexibility as screens can be curved.
"These features of OLED panels will drive demand in the mobile phone sector where consumers select smartphones based mainly on hardware design," the director added.
Currently only Samsung Electronics uses mostly OLED displays in its Galaxy smartphones, which Fitch believes is a benefit of vertical integration.
But Fitch said cost still matters for the faster adoption of OLED TVs in the market.
"Transition to OLED technology in the TV sector is likely to be slower than in the mobile sector as costs remain high relative to LCD, given the lower production volume and yields," she said.
OLED TVs accounted for just 0.2 percent of global TV shipments and 1.3 percent of total revenue in 2015, according to market research company IHS.
"A sharper decrease in LCD panel prices may further delay penetration of OLED," she said.
A solid demand for OLED displays will benefit both LG and Samsung Display, Jang said.
"We expect the increased adoption of OLED technology to provide a buffer against downside risks from the LCD supply glut and help sustain the business profiles of the two Korean display giants," she said.
"We believe Korean companies are likely to retain their current lead in OLED technology. Chinese, Taiwanese and Japanese competitors will have to endure several years of startup losses and substantial capital investment to catch up."
