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RiTdisplay has recently been reported to have already installed enough production equipment to manufacture up to 25,000 sheets of 400mm x 400mm and 50,000 sheets of 370mm x 470mm per month.
Teco Optronics has stated that, over the next few years, it intends to invest nearly $500 million in establishing up to 15 production lines for OLED based displays. Not to be left behind Pioneer is aiming to double OLED revenues over the next 12 months. Yet according to an article by Stanford Resources (SR) production capacity over the next 12 months is only expected to reach 170,000 sq inches per month. This raised our interest and prompted the question — what is the alignment between current and future supply and demand of OLED based displays? Our starting point for analysis was to determine two key pieces of information:
While the top level revenues forecast by DS and SR appear to be in agreement, if you were to ask a more refined question such as — "What will be the dominant display type in five years time?", then depending on who provides you with the relevant market data your final conclusion may well be very different. By 2007 DS forecasts active-matrix OLED to be the dominant display type. Our analysis places this at 85% by value and 74% by units. This is in contrast to SR which believes that passive matrix displays will remain the dominant technology well into 2008. Active-matrix will account for less than 40% by value and less than 10% by volume. Essentially, DS sees the future for OLED as being high-value units whereas SR sees the future as low-value units coupled with higher volumes. Published data on production capacity was not so easy to access. However, SR produces an interesting metric: viewable sq inches, which for our calculation is a more appropriate unit of analysis than units shipped. Unfortunately, no comparable figure from DS has been identified.
If all current and potential OLED licensees where to begin production with one standard production line of capability:
Assuming 20 OLED licensees then final production capacity would be: 297 million sq inches per year. Not enough to fulfil demand in 2007, but certainly enough until 2006. A number of OLED display manufacturers are being more aggressive in their race to build capacity. One standard production line appears not to be enough. RiTdisplay's recently announced capacity goal alone is sufficient to provide in excess of 200 million Sq inches per year. Again more than enough to satisfy demand until early 2007. If a single manufacturer has already installed enough capacity to satisfy forecasted demand over the next few years then the industry needs to reassess its position. Questions to consider:
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