A few weeks ago I read an editorial by Bob O’Brien at DSCC about OLED versus LCD. He stated that when his company was founded in 2016 its focus was on OLED research as this is clearly the coming one Technology. In his article he examines why OLED technology is developing more slowly than previously thought.

Three reasons against OLEDs In his opinion, the following factors have contributed to the fact that the OLED growth has proceeded more slowly than hoped:

1. OLEDs are really difficult to make.

I would say That was exactly the reason why the Koreans gave priority to the development of OLEDs. When I wrote my report on the SID keynote, in which Samsung Display announced that the company wanted to manufacture RGB OLEDs based on polysilicon for televisions, I even pointed out that Samsung wanted to clearly differentiate itself from China. In the end it turned out that it was too difficult even for Samsung to produce OLEDs – despite its great display technology!

2. OLEDs are expensive to manufacture.

O’Brien indicates the capital cost of the OLED factories, and the large number of process steps means additional costs. For years, OLED proponents argued that OLEDs were cheaper than LCDs because of their lower material costs. Again, one could argue that this was an advantage for the Koreans because it made the OLED business similar to semiconductor fabs, where material costs are low, but process and investment costs are high.

3. LCDs get better and better.

Meanwhile, the prices are continued to fall due to oversupply. In addition, the image quality of the LCDs has improved thanks to mini-LEDs and other technologies. Given that the US market has moved away from expensive televisions to inexpensive but large TV displays, it has become more difficult for OLED to compete.

O ‘Brien concludes that OLEDs still look the best and would catch on for the same price. But OLEDs couldn’t simply push LCD technology aside.

Factories are written off I agree with everything, but I think there is another point: the influence of capital. Over the years, the LCD business and its supply chains have accumulated a tremendous amount of investment capital. Part of the investment in production facilities of the first generations was lost because these fabs have since been closed. But a considerable part of the industry has written off its investments in LCD factories, but can continue to produce there.

Bob Raikes is the founder of Meko Ltd., a UK market research company. Bob is the publisher and editor-in-chief of Display Daily, a daily blog and lots of news about display technology.

This business can last for a long time be continued, because ultimately these factories no longer need “capital” and only have to cover their direct costs for material, labor, energy and overheads. Take Hannstar, for example: Despite a years old LCD fab and years of terrible panel price capers, the company is still alive.

Risky OLED investments To replace all LCD capacities with OLEDs, one would have to raise a lot of capital. That would be problematic at any time. But knowing how difficult Samsung is making large OLEDs, and how LG is struggling with its new OLED factory in China, it could be difficult to convince investors that it is worth the risk.

In addition, Samsung Display has spoken out in favor of QD-OLED (a combination of quantum dots and OLED backlighting) and now for QNED (a combination of quantum dots and mini-LED backlighting). If I were an investor, given the known risks, I would think twice about investing in large OLEDs.

The delivery capacities for LCDs are many times greater than those for OLEDs. Investments of 15 billion dollars or more would likely be required to replace the current LCD production capacity. (Mr. Tamura of the DSCC presented the data at the DSCC / SID Business Conference in June).

(Image: DSCC)