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Technology Stocks : OLED Universal Display Corp
OLED 169.500.0%Dec 12 8:10 PM ESTNews

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To: handyman who wrote (12608)10/4/2017 10:11:27 PM
From: IceHawk   of 13822
 
The validity of UDC patents (numerous or few) have been confirmed by the LGD contract. We're good until 2022.

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Universal Display Signs A Long-Term Agreement With LG Display

Jan. 26, 2015 2:42 PM ET
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4 comments
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About: Universal Display Corporation (OLED)






Ron Mertens


Long only, long-term horizon, tech, mid-cap

OLED-Info


OLED finally signs a long-term agreement with LG Display.

The agreement runs till 2022, which should relax investor fears of patent expiration in 2017.

LG Display continues its strong OLED TV push.


Universal Display (NASDAQ: OLED) and LG Display announced a new long-term OLED technology license agreement on Monday. It runs until December 31, 2022.

LG Display will pay a fixed license fee plus running royalties on its OLED products, and will also continue and buy phosphorescent materials from UDC.

LGD already uses UDC's materials in its OLED TV (it is UDC's second largest customer, and its share in UDC's revenue is growing quickly). UDC has said it is in no hurry to sign a long-term agreement as the current terms are actually better for the bottom line (in the current agreement the royalties are built into the material's sales).

But this announcement should be seen as positive for Universal Display investors. First of all, this evidently shows LG Display's commitment to OLED displays (both TV and flexible panels) - even though this is no surprise to anyone following LG's OLED TV program in the past months.

Universal Display has a similar agreement in place with Samsung Display - signed in 2011. The SDC agreement lasts till 2017, which got many investors worried about patent expiration in 2017. But this new agreement with LGD runs till 2022, which should relax those fears.

Finally, LGD would only have signed such a long-term agreement if it knew UDC's technology and IP is unavoidable. This means that LGD's lawyer did not think they could go around UDC's main patents - at least until 2022. Only a few days ago Sumitomo Chemical signed an OLED lighting license agreement with UDC, which was also a great validation for UDC's phosphorescent patent lock.

While there are going to be many bumps in the OLED market in the near-term, the future looks bright - both for OLED technology and Universal Display. I do not know if UDC's share price will indeed reach $715 in 2018 as I once joyfully wrote, but today's agreement is a step in the right direction.

Investors should next look to expanded OLED TV capacity at LG, new OLED display makers (including BOE, Tianma, Japan's JOLED), expanded capacity for flexible displays and tablet displays at SDC, Samsung's re-entry into the OLED TV market (probably won't happen before 2016) and of course Apple's (NASDAQ: AAPL) first OLED product (which will be the Apple Watch, in early 2015).

Disclosure: The author is long OLED.

The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article


PocketAces
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This agreement with LG Display seems like very good news for Universal Display (ticker OLED).

How do you know Apple watch uses an OLED display?

Do you believe that Apple (and its watch display suppliers) are likely to be materials and/or license opportunities for Universal Display this year?

26 Jan 2015, 06:05 PM Report Abuse Reply0 Like



Ron Mertens, Contributor
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Author’s reply »

Apple's Watch display has been discussed following its launches, and according to my sources it uses a flexible OLED display. It's pretty much confirmed as far as I'm concerned, but of course we will have to wait for the official release.

Apple will not become a UDC customer - they will be using LG Display's OLEDs (same as Nokia, Motorola and even Samsung Electronics are not UDC's customers).

26 Jan 2015, 11:51 PM Report Abuse Reply0 Like


PocketAces
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Thanks Rob.

I follow that if Apple's watch (and/or other possible future Apple products) use OLEDs, Apple gets access to the materials and technology by sourcing the display modules from a supplier like LG Display, which is now properly licensed with Universal Display.

My impression has been that LG's focus has been on larger area OLED displays - such as for televisions. While Samsung Display has ramped up capacity for smaller area OLED displays, which we see proliferated across Samsung Electronics' Galaxy smart phone product lines.

Do you have any opinion around LG's OLED development in smaller area displays?

27 Jan 2015, 11:30 AM Report Abuse Reply0 Like





Ron Mertens, Contributor
Comments (34) | Following | Send Message


Author’s reply »

While it's true that most of LG's OLED capacity is for TVs, LG is also heavily involved with flexible OLEDs. Here's some link that may give you more info on both programs:

bit.ly

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