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iSuppli: Cooperation is key to resolve AMOLED issues

Posted: 20 Aug 2008 ?? ?Print Version ?Bookmark and Share

Keywords:AMOLED industry? active-matrix technology? active-matrix OLED?

Although many display suppliers have discontinued their active-matrix OLED (AMOLED) businesses, the technology continues to advance, with mass production starting in 2007, along with the rollout of multiple displays from multiple vendors, according to iSuppli Corp.

"The stunning image quality produced by AMOLEDs has never been in question. However, there is continuing debate over when the AMOLED will become a commercially viable technology in the display industry and how effectively it will be able to compete against the current industry heavyweight: TFT-LCDs,"said Vinita Jakhanwal, principal analyst for mobile displays for iSuppli. "Regardless of this debate, the AMOLED market is set for strong growth over the next few years, although volume shipments will be tiny compared to TFT-LCDs."

The worldwide AMOLED market will grow to 185.2 million units by 2014, rising at a CAGR of 84.2 percent, up from 2.6 million units in 2007, according to iSuppli. Revenue is expected to hit $4.6 billion by 2014, up at a CAGR of 83.3 percent from $67 million in 2007.

Active-matrix technology provides major improvements to OLED quality, providing images that are comparable to LCD TVs. The most compelling example of this was Sony Corp.'s AMOLED TV, whose image quality has achieved wide acclaim.

To accelerate the process of migrating AMOLED technology from niche to mass market, multiple suppliers must add to their manufacturing resources and ramp up production quickly.

Jakhanwal advised: "While mobile handsets are the obvious main target for the technology, these phones require multiple sources of suppliers with sufficient volumes to meet demand. It's unlikely that a single company will be able to fulfill this demand in the short term because no supplier presently has sufficient capacity."

Moreover, instead of focusing on the entire mobile handset market, suppliers initially should target only high-end wireless phones because this will allow them to justify producing products with superior images that command higher ASPs than other displays. High-end QVGA resolution handsets could generate high-volume demand for active-matrix LCDs. However, the ASPs of AMOLEDs must decline in order to compete with TFT-LCDs.

In general, Jakhanwal advises AMOLED suppliers to play to their specific strengths when considering which markets to address.

Suppliers also should work on slimming down the form factor and cutting the power consumption of AMOLEDs. These attributes have always been a strong suit for OLED technology. However, the TFT-LCD industry is not standing still, as it continues to cut the thickness and power usage of its panels. "If AMOLED makers want to stave off TFT-LCDs advance in this arena, they must continue to press their advantage on these fronts," Jakhanwal said.

iSuppli forecasts growth in AMOLED unit shipments and revenues from 2007 to 2014.

Call for unity
Finally, aggressively improving manufacturing yields and efficiency is a must for AMOLED suppliers in order to reduce the costs of their products. These issues have plagued the AMOLED business since its inception. iSuppli believes AMOLED equipment, intellectual property (IP), material and panel companies should collaborate to overcome these manufacturing challenges. This will help build on each company's strengths and avoid duplication of effort. iSuppli notes this is an area where AMOLEDs are competing with TFT-LCDs, making it more important for suppliers to resolve these issues.

AMOLEDs can capture a portion of the small/medium display market during the next six to seven years if display makers work together to accomplish these goals, iSuppli believes.

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