Where will OLED TVs go?

A few months ago, Sony was still very secretive about OLED TVs. It had planned to launch a 27-inch OLED TV this year, but it was canceled. Is OLED really too far away from us?

Just when people were speculating about Sony's attitude towards OLED, a "Sony internal official document from 2010 to 2011" recently revealed that OLED TVs were once again included in Sony's new product plan, known as the "ZX" series. Sony launched the 11-inch "XEL-1" OLED TV in 2007, which was also the world's first OLED TV. Sony invested heavily in OLED and was therefore described as "a TV manufacturer that missed LCD and gambled on OLED."

Seemingly good situation

Sony is not the only TV manufacturer that is impressed by OLED. Samsung, LG, Sharp, Pioneer and Mitsubishi Electric are all fans of OLED, and Samsung has always been the company with the largest shipment of OLED panels. A few days before Sony revealed internal information, LG launched a 15-inch OLED TV globally. LG even firmly stated that it will launch a 30-inch OLED TV in 2011 and a 40-inch OLED TV in 2012. The company also predicted that by 2016, the price of OLED panels will be consistent with that of LCD panels, and OLED will be fully popularized. DisplaySearch also gave an optimistic estimate: the global OLED output value will grow from US$600 million in 2008 at a compound annual growth rate of 33%, and by 2016, the overall output value will reach US$6.2 billion.

OLED, or organic light-emitting diode, is a self-luminous display technology. Compared with liquid crystal technology, OLED has the characteristics of thinner panel thickness (as thin as 1 mm), higher contrast, faster response speed, more energy-saving (power consumption is less than 2/5 of liquid crystal), lighter (weight is less than 1/3 of liquid crystal), and no viewing angle problem.

The more advanced expectation is that the future OLED display screen can be folded, bent, and even hung on the wall like a piece of paper or put in your pocket, or embedded in your clothes, so that it blends into the clothes when not displaying. Therefore, the application market of OLED is full of infinite imagination space, and it is almost recognized as a direct substitute for LCD.

However, compared with LCD technology, OLED is not mature and still has many risks, such as low yield rate, high cost, and difficulty in achieving large size. This is very similar to the initial stage of LCD, where investment is like a bottomless pit and returns are far away.

In the eyes of foreign TV giants, the blooming of OLED is only a matter of time. However, for the Chinese display industry, which always lags behind in the display field, the development of OLED will not only be a matter of time, but also the most urgent problem to be solved is the industrialization decision. So far, China has not launched any OLED TVs, and lacks strong leading enterprises. Among color TV manufacturers, only Changhong has started to build a small-size mass production line. Overall, the power of industrial integration is obviously lacking. At this time, decisive decisions by large enterprises are needed.

Qiu Yong, the founder of Visionox, has a clear intention to build a world-leading display industry based on independent technology.

What are Chinese color TV manufacturers doing? On November 16, TCL announced a partnership with Shenzhen Shenchao Technology Investment Co., Ltd., and the two parties invested 24.5 billion yuan to build an 8.5-generation LCD panel production line in Shenzhen. It is understood that Skyworth is also actively negotiating with LG, intending to invest in LG's panel production line in Guangzhou.

China has already built as many as seven 8.5-generation LCD panel production lines. This is understandable, because in the next few years, the TV market will still be dominated by LCD. According to the latest forecast of Display Search, the global LCD TV market demand will reach 127 million units in 2009, a year-on-year increase of 21% over 2008, of which the sales volume in the Chinese market will reach 23.6 million units, accounting for 19% of the global market share. It is expected that the global sales volume will reach 188 million units in 2012, with an average annual compound growth rate of 15%. By then, the Chinese market share will reach 21%, becoming the world's largest LCD TV consumer market.

As Skyworth Group CEO Zhang Xuebin said, "We can't give up the present for the future." By future, he means the next generation of display technology, such as OLED.

For Chinese color TV manufacturers, resources are very limited. For example, Skyworth's annual sales revenue is about 5 billion yuan. If 10% of its revenue is used for R&D investment (which is almost the maximum), it will only be 500 million yuan. You should know that the capital required to build an 8.5-generation line is 25 billion yuan. From this perspective, the large-scale revenue of Japanese and Korean companies has taken advantage of it. For example, Samsung's revenue last year reached 96 billion US dollars, and 10% is 9.6 billion US dollars.

Even so, China's pursuit of "future display technology" has not stopped. In 2008, two OLED small-size panel mass production lines were promoted in China: the production line established by Visionox in cooperation with the Kunshan government was put into production in October; after Changhong acquired South Korea's ORION OLED, a production line costing 705 million yuan broke ground in Chengdu. Changhong's approach is very similar to the way Taiwan's AUO entered the LCD panel production industry, both of which accumulated the basic technology through acquisitions (AUO acquired an IBM LCD company). Facts have proved that if handled properly, this approach can be successful.

Visionox took a different path, which was to be born out of a university, then set up a company, find investment on its own, and start the difficult industrialization process based on core technology. The founder of Visionox is Professor Qiu Yong of Tsinghua University, who is also the leader of the expert group of the National "Eleventh Five-Year Plan" 863 New Flat Panel Display Technology Major Project. 13 years ago, Qiu Yong decisively chose the OLED industry. His intention was very clear, that is, to rely on independent technology to build a world-leading display industry, rather than always following others like cathode ray tubes and liquid crystals due to the lack of core technology.

At present, China has gradually narrowed the gap with Japanese and Korean companies in terms of OLED technology. From a technical perspective, OLED is divided into PMOLED and AMOLED. The former is passive OLED, which can only be made into small-sized OLED panels below 4 inches. China's existing production lines are all for this type of OLED; the latter is active OLED, which can theoretically make color OLED panels of any size.

Samsung's earliest PMOLED production line was established in 1998, 10 years earlier than China. However, China will narrow the time gap with Samsung in AMOLED. It is understood that while expanding production capacity and developing innovative technologies and products such as double-sided display and transparent display to enhance the competitiveness of PMOLED production lines, Visionox has begun to cooperate with relevant units to develop AMOLED technology, and will build an AMOLED pilot line and a 4.5-generation mass production line within 2 to 3 years to achieve mass production of OLED panels below 12 inches.

This means that compared with Samsung's 4.5-generation line put into production this year, China's AMOLED will only lag behind Samsung by 2 years (Samsung put its 4.5-generation line into production earlier this year). Changhong's AMOLED schedule is almost the same; Rainbow and Foshan Zhongxian are also planning to build multiple AMOLED panel production lines. The production of OLED panels shows that China's industrialization process in this field has not been stuck, which is different from liquid crystal. In the future of OLED flexible display (i.e., curling) and lighting, China may surpass foreign companies. Visionox is currently one of the few companies in the world that can prepare OLED flexible display devices and lighting devices, and is planning to develop OLED lighting technology and industrial layout to become one of the first companies in the world to commercialize OLED lighting products.

More importantly, China is also the developer of international OLED standards, including the development of test standards, and Qiu Yong is the leader of the test standards group. In the LCD industry, China has never been involved in standards. Changhong also said that foreign companies such as Samsung and LG are gradually inclined to adopt Changhong's patented technology - metal-induced polysilicon technology - in mass-produced AMOLED panels.

The optimistic estimate is that OLED may change the business model of China's display industry, that is, from "only downstream terminal manufacturing, no upstream core technology" (LCD is a typical case) to a "vertical industrial chain covering both upstream and downstream."

Although the situation seems optimistic, it still contains many uncertainties and unknown risks. Will the mass production of LCD panels (2011) be the time when OLED starts to become popular? If so, then the high-generation lines currently invested in China will be sacrificed for future OLED. And will the industrialization of OLED in China be unsustainable with the support of a few companies alone? The current situation of China's display industry seems good, but in fact, it hides many hidden worries.

Decision Moment

"When producing large-size panels, it is impossible for two of us to carry such a large glass (the panels are cut from glass, the larger the panel, the larger the glass required) and put it on the operating table, otherwise it will break! We must have a crane, vacuum suction cups, and manipulators, and these equipment need to be purchased at high prices." Wu Yande, vice president of Visionox, was a little excited. In his opinion, Visionox has accumulated a good technology and production foundation, but the investment in large-size production lines has greatly increased compared with PMOLED, which requires strong support and investment from the government and related companies.

According to the current development situation, Visionox's revenue and external financial support are only close to 100 million yuan, which is a drop in the bucket compared with the billions of dollars invested in OLED. If an emerging industry lacks a powerful leading enterprise, the speed and scale of the industrial chain establishment will undoubtedly be affected.

Samsung's courage to be the first to mass-produce AMOLED panels is related to the scale behind it. In addition, since Samsung has a complete industrial chain and huge sales of LCD TVs in the LCD display industry, and the OLED industrial chain overlaps with LCD in some links, it is easier for Samsung to establish an OLED industrial chain.

China's OLED display has never lacked followers. Rainbow (Foshan) invested 508 million yuan to build an OLED production line, and Dongguan Hongwei Digital invested 600 million yuan to build an OLED production line. The larger reserve force is that almost all universities in various places have related OLED research and development projects. First, they are interested in the application prospects of OLED; second, there are few competitors in the OLED market. At present, there are only 7 companies in the world that can mass-produce, so the market space is relatively large; third, experts and scholars are more concerned, and the country has also given continuous support to the development of OLED. From the Ministry of Science and Technology to the National Development and Reform Commission and then to the Ministry of Industry and Information Technology, there are project support for OLED every year. Unfortunately, the country has not yet attached importance to and supported OLED as a strategic industry with huge driving force.

It is not a problem for China to complete the basic research of OLED, but just like LCD in the past, what is lacking is further industrialization, which requires the participation of large enterprises. However, large enterprises (such as those color TV manufacturers) are considering the allocation of limited resources between reality and the future, and now it seems that the balance is leaning towards reality.

In addition, OLED technology is still risky, which is another important reason for big companies to hesitate. The yield rate of AMOLED panel production line is very low, only 30%, so its price is very high. LG's new 15-inch OLED TV (non-full HD) costs as much as $2,600, and LG's 55-inch full HD LCD TV is also priced this high. OLED companies believe that this is not a technical bottleneck, but a matter of time. Just like the beginning of LCD, the yield rate has a process of climbing. Now the yield rate of PMOLED is even higher than that of LCD.

Even so, during the period when OLED large-size technology matured, LCD TVs have been improving their picture quality or functions. The improvement of LCD technology will extend its survival time in the market. After all, the scale and industrial chain advantages of LCD determine that its price is much lower than OLED. Some technical experts even believe that if LCD breaks through its own technical bottleneck, it may not lose to OLED in terms of picture quality.

Under these risks, it is very difficult for large enterprises to make a decision. At present, the practice of China's mainstream color TV manufacturers is to cooperate with universities or scientific research institutions to complete a follow-up study on OLED technology, but it is only a follow-up, and there is basically no industrial investment. Their hesitation may cause them to miss the opportunity.

This year is recognized as the "take-off year" of OLED, because Samsung has mass-produced AMOLED this year, and Sony and LG have also announced new plans. There is a view that the Japanese and Korean companies that have mastered large-size OLED technology did not vigorously promote OLED TVs before for only two reasons: one is that the economic crisis caused their financial problems; the other is that they strategically intended to wait for the return on their investment in LCD panel production. Now that mainland China has also taken over the high-generation LCD panel production lines of Japanese and Korean companies through government funding, what worries do they have?

Perhaps, as OLED companies worry, when China's high-generation panel production lines are put into production, OLED TVs will become popular. It is time for Chinese color TV manufacturers to make a decision.