It’s Official: Samsung to Spin Off LCD Biz

February 21st, 2012

The WSJBloombergLA Times and others are reporting Samsung Electronics Company is spinning off its unprofitable LCD business into a separate corporation provisionally called Samsung Display Co. to be capitalized with $668M investment on or around April 1, 2012. Bloombergreports the board of directors announced the move on Monday, and the new company may end up merging with Samsung Mobile Display, according to Daewoo Securities analyst James Song.

By NPD’s recent reckoning, Samsung is the world’s largest TV maker with 19.3% worldwide market share in 2011, on sales of nearly 48M units. While the company has dominated the top spot for the past six years, they still lost $667M in 2011. But Samsung is not getting out of the display business by any means. The company is shifting focus to new OLED displays with investment plans to spend up to $5.9B, according to Bloomberg, who also quoted Samsung spokesperson Nam Ki Young stating that Samsung, “is reviewing an eventual merge of its LCD and OLED operations.”

The latest numbers today from Santa Clara based NPD help tell the story behind the LCD market. Most folks who follow displays already know that large area LCD panel prices are in the tank right now. Most LCD fabs are experiencing squeezed profits from a condition of oversupply (and overcapacity). This is not new and is so common in fact we even have a name for this process, “the crystal cycle.”

What is unique this time is specifically where growth in large area (9-inch and above) TFT LCDs is happening, and how things look to proceed from this point in the display market development. This is a time in the LCD industry that NPD analyst, David Hsieh is characterizing as “…experiencing unprecedented changes [where the] tablet PC is driving growth and becoming the center of product innovation.”

One look at the display growth numbers tells us tablets are red hot, with a 217% growth from 2010 through 2011. The other high growth category is the public display market at a more modest by comparison 52% growth over the same period. Only one other category, notebook PC is in positive growth territory in 2011, with a slender 8% growth over the period. All others, including LCD TV (at -8%) and LCD monitors (at -1%) are in negative growth territory, see table. In fact, Tablets are the only display category with a rate of change that’s growing in the LCD space, all others lost ground in growth rates over 2010 numbers, including public displays that shed 1 point in 2011 (52% growth) over the growth rate of 53% the year prior.

And the case looks most severe for LCD TVs, which moved from a rate of growth of 35% in 2010 to a negative 5% rate, a whopping 40 points over the period. But does this mean LCD TVs are going away? According to NPD, what we’re seeing are “inventory adjustments in the supply chain” since 2010, even though this is the first time that LCD TVs have been in negative territory since the advent of the category in 2002. The group sees 2012 as a recovery year with developments in thin bezel and LEDs continuing to dominate the TV space.

While tablets, selling almost 60M units in 2011, are driving stellar growth in the category, it is not enough to make up for losses in other segments. Samsung is seeing the writing on the wall and moving (at least operationally) toward a newer higher profit OLED technology that’s poised for $20B growth by 2018, (by Display Search reckoning) and perhaps much sooner if Samsung can deliver on the goods. - Steve Sechrist

Vizio’s Gunning for the VW of the CE Age?

January 4th, 2011

Irvine, CA based Vizio America is in the news with a pre-CES announcement of its new VIA Plus ecosystem, the company calls “…the next generation of VIZIO Internet Apps that will provide consumers with a connected CE experience unlike any other… allow[ing] for unified on-demand content and application consumption across multiple consumer electronic devices including VIZIO HDTVs, Blu-ray players, SmartPhones and Tablets.”

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Google’s New Nexus S AMOLED takes on the Apple “Retinal” Display

December 7th, 2010

The world of smart phones is anything but static. Yesterday, Google unveiled its latest branded phone, the Nexus S, made not by HTC but by Samsung, the largest supplier of AMOLED displays in the industry. And, true to form, the latest iPhone rival sports a 4-inch next generation AMOLED display (480 x 800 pixels at 235 ppi) and a battery of new features worthy of an iPhone competitor.

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Tablet 2.0: The Line is Blurring Between EBR’s and Tablets

November 2nd, 2010

In a nod to colleague Aldo Cugnini’s story on Samsung’s 7-inch Galaxy tablet yesterday, there’s another 7-inch color beauty aiming at the same iPad market from a different direction. Like Tennyson’s narrative Charge of the Light Brigade, the cannon volleys are coming now from the electronic book reader (EBR) camp. The new “NookColor” offering from Barnes & Nobel (B&N) is a 7-inch color EBR extension to its line of Nooks that has more in common with a traditional tablet than the Amazon Kindle or other traditional EBRs.

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DisplayMate Gives “Best Mobile Display” to iPhone4—But Not So Fast…

October 5th, 2010

Dr. Ray is at it again. Display guru and founder of DisplayMate, Dr. Raymond Soneira has turned his scientific instruments and display analytics to the world of smart phone displays and the Apple iPhone4 in particular. Turns out that Applehas much to celebrate, as its new “Retinal display” proved itself to go beyond the marketing hype winning the group’s Smartphone Display Technology Shoot-Out, and gaining the “Best Mobile Display Award” that will be published in the DisplayMate Best Video Hardware Guide.

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Samsung Tablet Puts OLEDs on Back Burner

September 7th, 2010

Yesterday while most Americans were enjoying the Labor Day holiday marking the end of summer, Samsung executives were very much at work at the on-going IFA conference in Berlin where the company showed off the newest rival to Apple’s iPad, the Samsung Galaxy Tab. The company has hopes of selling up to 10M devices by this time next year presumably through wireless subscriptions and a subsidized device cost of between $200 and $300 according to a recent Informationweek.com article. The 7-inch Android (2.2) based tablet sports a multi-touch capacitive display that boasts super fast response time.

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China Central Planners Play the Taiwan Display Card

August 17th, 2010

In the high stakes game of “LCD Panel Poker” it’s common for gutsy technologists to bet billions of dollars on next generation fabs that lower cost and improve efficiencies for the seemingly insatiable electronic display market.


Steve Sechrist
Senior Analyst and Editor

But top Korean makers LG and Samsung are being dealt out of the next hand by mainland China. Both companies are “on hold” with plans to invest $4B (for gen 8 fab) and $2.2B (for gen. 7.5 fab) in mainland China respectively, pending approval to their investment plans that never came. Now a recent article in Korea Times accuses China of “Stalling” on the process that was originally due from Chinese central planners, in April-2010.

The economics of the deal are simple. Both Korean firms together command +40% world-wide LCD panel market share and see China developing into the world’s largest market for LCD panels—and both want a piece of the action to help them maintain LCD dominance. China is looking for both investment, and technology transfer to help leapfrog that nation into a world display powerhouse, as China moves up the technology curve supplying higher value add products to both domestic and foreign markets. Currently, China is producing LCD panels from gen5 fabs, so the move to gen 8 and gen 7.5 will add a significant boost to both productivity and manufacturing efficiencies (lower cost.)

But the Korea Times reports a recent (June-2010) trade agreement between the two China’s, mainland and Taiwan, may be at the heart of the “stalling” issue. The ECFA (short for Economic Cooperation Framework Agreement) establishes a “special status” between the two nations, not unlike the relationship that exists with China and its Special Administrative Regions Hong Kong and Macau. While the agreement came under intense debate, polarizing the small island nation of Taiwan with concerns of getting too close to mother China, suppliers like Korean based LG and Samsung are beginning to feel the effects.

In his Display Daily column on January 21st, Taiwan’s Newest Tiger Roars; AUO Roars Back, Ken Werner stated that Taiwan-based display maker CMO was recently purchased by a much smaller Taiwan LCD maker, Innolux. Innolux has ties to the deep pockets of China-based Hon Hai which in turn owns Foxconn, maker of the iPad and iPhone as well as a myriad of other products. This is significant because, as Werner puts it, “CMO has a lousy debt/equity ratio, along with excellent technology, advanced-generation manufacturing facilities, and an extensive customer base.”

In fact, the purchase created the world’s No. 3 LCD maker Chimei Innolux (CI) with about 17% world market share, and operating gen 8.5 LCD fabs. But there’s more, not only does this affect LCD technology transfer, (Taiwan to mainland China) but next generation OLED panels as well. Werner reported that in the merger “CMEL, Chi Mei’s OLED subsidiary, is included in the purchase, as is TPO, the separate maker of small displays, which has LTPS fabrication capability and has developed OLED technology (but has no commercially available OLED products.)”

So for now, word on the street is the Beijing government is likely to snub the investment and technology transfer ( gen 7.5 and gen 8 ) from the Koreans, and approve the Foxconn / CI gen 8.5 LCD line in Chengdu, Sichuan Province, western China. This includes a total investment of $5B, and up to 100K high tech jobs. As for the two Korean giants, the game is shifting with China holding all the cards—in a command-based economy can shut the door on investment and market access with little or no repercussions.

A Tale of Sunlight Readability

July 6th, 2010

Two display stories caught our eye this morning, the new E Ink upgrade of the popular Vizplex display technology called “Pearl” that boosts contrast and moves e-Book readers (EBRs) from a “news print” look to printed ink—say in a paperback book with a boosted contrast, 16 gray levels of depth and 1 second refresh. The other, announced the availability and subsequent sell-out of the Pixel Qi (pronounced “Pixel Chi”) 10.1-inch LCD transflective display, offered for sale ($275) in a DIY (do it yourself) kit fromMAKE magazine’s MakerSHED web site.

 


Steve Sechrist
Senior Analyst and Editor

This hybrid transflective display won the coveted SID Display of the Year Gold Award in May, and claims the best of both worlds offering full color and LCD speeds (clocked in the milliseconds vs. the one second refresh of the new Pearl.) Better yet, the display claims full daylight readability, full motion video and full color—all in a 10.1-inch package just waiting for a netbook/ EBR maker to come along… but so far, none did.

So, like a politician going directly to the public for support, the company began offering its raw hybrid panel to the DIY community in much the same vein as “modders” changing both the software and hardware configuration to squeeze out a bit more performance in game play.

In this case, the Pixel Qi display can replace the current panel sold on both the Samsung N130 & Lenovo S10-2 netbooks both tested and certified by Pixel Qi (others may work and the “certified list” is bound to grow.) The company also reports that changing the display on a netbook is a “simple” 5-minute process—but comes with consequences. These include voiding one’s warranty, and a strong admonition about doing so “at your own risk” and that Pixel Qi and company “…are not liable for any damage that may occur.”

But that’s just the point. Why are consumers, wanting the benefits of sunlight readability, fast refresh, color, and eco friendly display (consuming 80% less power in the reflective mode) have to stoop to a DIY solution?

Clearly the E-Ink Pearl display will go on to sell millions of panels in next generation EBRs like the new Kindle. The technology is well established and its bi-stable, consumes very low power, and offers clear readability – benefits that are in line with what the EBR market is all about. At the other end are the LCD-based, high bright displays like those found in the iPad. Here, you gain full color video performance but at the expense of sunlight readability and reduced battery life (many will argue that the 10 hours of the iPad is actually acceptable, however).

Displays offering sunlight readability in the common laptop / netbook are few and far between. Any sun worshiper (particularly those of us living in the rainy Pacific Northwest) jump at the chance of moving outdoors to work when the sun is shining; only to find the reflection in the common laptop display renders the device almost unusable. Yet the display pioneered by Pixel Qi that can solve this problem is still waiting for its chance in a mainstream product.

The company is now pinning its hopes on a ground swell of demand from a growing community of hackers/modders who know what they want and have begun taking product development matters into their own hands. Will this result in a product design win? Only time will tell…

 

LG Doubles Down on OLED Displays

May 4th, 2010

A recent news report from Korean FNNews.comincluded details of LG Display’s (Seoul, South Korea) newest initiatives to boost profitability by “focusing on competitiveness.” The story centered on the company’s announced $226M investment into OLED production, a move Kwon Young Soo, LG Display’s CEO, said would triple the new emitting-display capacity from the current 4K substrates to 12K by the end of 2011.


Steve Sechrist
Senior Analyst and Editor

Some analysts see the increase as a direct result ofApple’s (Cupertino, CA) contract with LG, which was reportedly expanded from $500K to $800K. This coincides with recent rumors that Apple’s next-generation iPhone and iPad products will move to OLED panels over the currently shipping AMLCDs. (Okay, the rumors were that the first-gen iPad was to have had an OLED, too…)

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AUO Delays Vendor Delivery of EPH 6″ and 9″ Modules

March 16th, 2010

When we heard that AUO’s SiPix (Hsinchu, Taiwan) had announced a delay delivering its mass produced 6- and 9-inch electrophoretic panel (EPH) modules to makers of e-book readers (EBRs), we decided to look a little deeper to understand why. We checked in with SiPix’s business development director Bryan Chan to learn more.

Steve Sechrist
Senior Analyst and Editor

According to the translation of the Chinese language Times article, SiPix is continuing to supply the much smaller RFID tag sized EPH displays for that market, but is apparently having some problems scaling up to larger 6- and 9-inch sized displays. According to the article, the issue relates to maintaining the static or fixed display state, which is a key characteristic of EPH technology.

Chan provided a “summary” of the translated SiPixreport saying:

  1. Senior VP of AUO’s Consumer Products Business Unit, Dr. CT Liu, has now moved into the CEO position at SiPix full-time
  2. AUO has begun mass production of the 6- and 9-inch display products with 60% of the volume going to 6-inch models
  3. The bi-stability of the material (the ability to hold an image without power) was at issue and that the displays did not hold an image. It states that there was a material change to address this and that requalification is happening in Q2.

Chan told us he couldn’t officially comment on this last point, and that we should “go with the translated news story.” He did emphasize that mass production of the display modules has not been affected, just the delivery of product to both BenQ and Acer while the “new material” goes through a final round of qualification by those vendors.

While the requalification of the 6″ and 9″ panels is set to occur in Q2, Chan said they are still on track to hit their 2M to 2.5M displays this year with 60% going to the 6-inch modules and the other 40% of production shared between the 9-inch modules and the much smaller RFID / Shelf label products.

There is probably more going on here than meets the eye. Loss of bi-stability can be caused by problems with the front plane or backplane. And, to say the requalification will not impact mass production of the display modules really means for customers other than BenQ or Acer. By having to requalify the panel, that will impact shipments to these customers and delay the introduction of EBR products in the market. However, it does appear that the problem showed up early in the production ramp, so it may be possible to make up for this delay as the year rolls on. At least this seems like a plausible explanation for a somewhat tangled story.

In previous conversations with the company, we do know that many months ago, there were issues with wave forms and update speeds, but the bi-stability of the material was never at issue–and always considered one of the display technology’s strengths. In fact, here’s a rundown of some of the strengths of the SiPix technology, as reported in our 2009 Insight Media EBR Report:

  • Very rugged, due to rib microcup structure, so it is pressure insensitive
  • Slightly darker black state than E Ink, so it has higher contrast
  • Low-level multiplexing, otherwise parasitic crosstalk for smaller pixels
  • Can fill cavities with separate colors to produce full color as additive or subtractive mode for high brightness
  • Compatible with R2R manufacturing, for lower cost
  • Low cost – suitable for price-sensitive applications, including smart cards and USB and Flash drive memories.

If anything, the news helps to underscore the difficulty that display makers face in moving from prototype display to full (mass) production with acceptable yields that create profit for the company. (Chan would not comment on specific numbers, he did say “…the yields are pretty good.”) And even while this display module delay for the SiPix vendors may help bolster the E Ink dominance in the space in the short term (as well as help keep their Vizplex prices high) long term, a second supplier of EPH display material will only help benefit the entire EBR market.

 

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