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To: I'manoledguy who wrote (12626)10/5/2017 2:19:08 PM
From: handyman
   of 19649
The miners are lining up as UDC sells them the picks and shovels.?

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To: slacker711 who wrote (12624)10/5/2017 3:40:34 PM
From: litespeed2011
2 Recommendations   of 19649
In my mind UDC has greater leverage in getting the sweetheart deal this time.

At the get-go when Samsung was the only play in town, there's not much leverage.

But today it's different. As handyman pointed out (and actually I do like the pick and shovel description because it's easy to understand), folks are lined up at the door to get a piece of the action.

And the UDC strategy of maintaining a large cash stockpile will help in achieving a happy ending for the negotiation story.

Why? If things truly come to a stall, which I don't think it will and UDC is 'forced' to play hardball which again is a low probability event, which company has more to lose by digging its heel in the ground?

UDC can go without Samsung for a year with its cash and revenue from LG. How long can Samsung hold out not being able to sell phones and screens given all it's capital expenditure? And if Samsung can't deliver to Apple, Apple will sue.

There are other girls on the dance floor now. UDC can pick and choose. Of course being the respectful business folks that work at UDC, UDC team will seek to achieve amicable terms without Samsung feeling that it's been cornered into the terms and conditions because after all, who doesn't want a long-lasting mutually beneficial business relationship?

Samsung management on the other hand, should learn from its LG brethren (they missed the first lesson on how to build OLED TV and here's an opportunity to not fumble on a major decision) and be wise about signing on to reasonable terms so that it doesn't end up on the dance floor, alone.

The only thing I'd ask UDC mgmt team to remember is follow Teddy Roosevelt's style of diplomacy where one "speaks softly, but carry a big stick".

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To: litespeed2011 who wrote (12628)10/5/2017 3:47:39 PM
From: handyman
   of 19649
I echo all your sentiments. Samsung would have to be nuts to pass on 4 nil for what?

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To: litespeed2011 who wrote (12628)10/5/2017 4:01:06 PM
From: slacker711
1 Recommendation   of 19649
I would note that everything that you said was true in 2011. Samsung had spent billions on their Gen 5.5 fabs and was preparing for the launch of the Galaxy S3 which I believe was the best selling Galaxy handset of all time. Samsung is making far more on OLED's now but they are making less on handsets.

Also, UDC's patent with the widest coverage still had over five years of life left. Despite that, UDC settled for a "no-downside" agreement.

How long can Samsung hold out not being able to sell phones and screens given all it's capital expenditure?

So we know for a fact that nobody in the industry, regardless of patents, can supply commercially viable emitters?

If yes, then UDC should raise the royalty rate substantially and go for a 6+ year license.

If no, then it becomes a balancing act with Samsung and UDC trying to figure out how much risk they are willing to take to get better terms.

I think it highly probable that Samsung will sign. However, IMO the idea that there is zero risk that this goes into litigation or even a one year agreement shows too much confidence into negotiations where we have little insight.


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To: slacker711 who wrote (12630)10/5/2017 4:39:38 PM
From: Cooters
3 Recommendations   of 19649
IMO you've made the critical points but I'm going to frame the argument differently, and it hopefully will highlight why I believe we are likely to see this drag into 2018 and get rather......contentious...

The leverage in this negotiation is not based on one fulcrum because it is not based on one moment in time, it is a moving and fluid target. I'll narrow it for sake of argument to a day in each of the 5/6 years we hope the agreement spans.

- 7/1/18 - I would consider Samsung's leverage virtually zero, almost laughable, they cannot produce a commercial OLED without a license and UDC emitters.

- 7/1/19 - Ligands patents still valid, very unlikely but not impossible that commercial TADF emitters could be available. Still major advantage UDC.

- 7/1/20 - Now we are getting to a situation. Ligands patents begin to expire. TADF emitters are much more in the realm of reality, remembering we are speculating about their availability today. Advantage UDC.

- 7/1/21 - New world. Ligands patents expired or expiring worldwide. Are we relying on the 4000 patents now? Still betting TADF is not a viable option? IMO we have arrived at Advantage Samsung.

- 7/2/22 - Advantage Samsung

Note when I say Advantage Samsung I am talking in a negotiation. What actually transpires will come to pass in the fullness of time. What Samsung has to accept for a one year extension is not what they have to accept for a 6 year deal.


PS - And also note the patent leverage was much stronger in 2011 and we know what we got.

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To: slacker711 who wrote (12630)10/5/2017 4:47:24 PM
From: Prophet3200
   of 19649
Thank you Slacker. I agree completely...

I would go a step further to say that UDC's management team is the company's largest liability in its negotiations with Samsung. They have a history of giving away the company's tech for way to little!

To illustrate my point I suggest a comparison between the UDC's "value add" vs. UDC's "value received". UDC's technology adds 3x to power efficiency, much longer lifetime, cool operation (no heat sinks), flexible form factors etc. The company receives less than 1% of panel sales in combined material sales and royalty/license fees.

I know that we have discussed this in the past.... this is among my largest frustrations with UDC!

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To: Cooters who wrote (12631)10/5/2017 4:58:55 PM
From: Prophet3200
2 Recommendations   of 19649
The leverage in this negotiation is not based on one fulcrum because it is not based on one moment in time, it is a moving and fluid target. I'll narrow it for sake of argument to a day in each of the 5/6 years we hope the agreement spans.

Adding to your list, UDC has some tech in its pipeline that, if realized, could swing the advantage back heavily in their direction for 2021 and beyond (manager materials, blue PHOLED, etc....)

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To: Prophet3200 who wrote (12633)10/5/2017 5:04:34 PM
From: Cooters
   of 19649
Adding to your list, UDC has some tech in its pipeline that, if realized, could swing the advantage back heavily in their direction for 2021 and beyond (manager materials, blue PHOLED, etc....)

Correct, that makes this even more complicated, as Samsung must contemplate inventions that have not yet happened and factor those into their negotiations. On the flip, remember UDC is not the only company working on new things.

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To: Prophet3200 who wrote (12633)10/5/2017 5:05:10 PM
From: RitzHuskie
   of 19649
One thing that may be a wild card in the negotiations....Since Samsung is currently having there rear end handed to them in T.V. development. What if they are considering developing an OLED T.V., which they may be? My bet is that does happen in the next 2 years. I think both companies are considering that when they are at the table.

There may be other hardware apps as well, refrigerators, washing mashings, monitors, etc. that all have Samsung OLED screens. Lots to consider. Definitely a different time than the last negotiation.

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From: IceHawk10/5/2017 5:13:13 PM
1 Recommendation   of 19649
The mobile OLED era is only just beginning

by Robert Triggs

OLED is the talk of display town this year, particularly when it comes to the smartphone market. Samsung and LG have caught the attention of the design-conscious with their latest “bezel-less” panels, and there’s chatter about the first flexible designs finally making it to market in 2018. Apple’s announcement of the iPhone X is arguably even more significant, adding millions of more units to OLED demand over the next 12 months and likely beyond.

And now Google showed off its own OLED smartphones, indicating that the future is firmly in the OLED camp.

Apple’s adoption of OLED this year isn’t just significant from an industry perspective though. The launch of the iPhone X is putting OLED display technology on the map for general consumers too. Samsung has been using its AMOLED technology for years, but it wasn’t until the arrival of the Galaxy Note Edge and subsequent use of flexible OLED technology in its flagship smartphones that consumers outside the tech-sphere paid much attention.

Inside the LG V30’s new display – POLED vs Samsung’s Super AMOLED
The LG V30 is shaping up to be a compelling flagship phone for many reasons, from its promising new camera to the range of multimedia software options present. It's also the first time the V …

In the end, the new and interesting form factors available with flexible OLED has been the major commercial breakthrough. Apple climbing aboard the new looks offered by OLED will only increase the technology’s profile over the coming year. There’s little doubt that mobile OLED technology is only going to see increased demand as other manufacturers look to emulate these popular designs.

The big question now is whether there will be enough OLED supply to go around.

Ramping up supply

Samsung Display’s early decision to focus on OLED rather than LCD mobile display technology has paid dividends now that the technology is seeing greater appeal in mobile. The company is by far the largest smartphone OLED panel manufacturer, catering to 97 percent of the market in Q1 2017 and shipping the vast majority of the 400 million panels produced in 2016. Currently, Samsung Display is the only volume supplier in the market.

LG Display took the opposite approach, focusing on large TV panel OLED production early and only recently transitioning over to ramping up mobile sized OLED production. LG Display will be able to offer volume for larger smartphone launches once its plants at Paju and Gumi are running at higher capacity. LG Display is targeting the capability to pump out 120 million 6-inch smartphone displays.

OLED's major commercial breakthrough has come thanks to the development of new form factors. With Apple now on-board, we can expect even more manufacturers and consumers to want the technology.

Observing the growing demand, a number of other panel manufacturers are pushing ahead with their own plans to increase OLED panel production. Suppliers from China have been making aggressive capital investments in recent years, including BOE, Tianma, China Star, EDO, Visionox, Truly and others. These companies will be needed in China’s many smartphone manufacturers want to keep up with the display technology shifts already taking place at Apple and Samsung.

Apple needs an OLED supplier, but can it sidestep Samsung?
We've had a number of major smartphone releases to enjoy recently and the next big one on the calendar is Apple's next batch of iPhones. Many are expecting a number of technological refreshes to mark …

However, China’s OLED manufacturers aren’t expected to be able to produce meaningful panel quantities until sometime in late 2019 or 2020. Furthermore, due to the complex production techniques needed for flexible designs, it could take even longer before we see high yields of high resolution flexible OLED panels from these manufacturers. In the short term, Samsung and LG Display are going to be the most sought after suppliers.

Bendable and foldable designs

Taking this drive for product differentiation a step further, we arrive at the future of bendable and flexible products and display. While we’ve been hearing about various prototypes and rumored product launchesfor what seems like forever now, if there’s one display technology that can possibly help make these products a reality it’s OLED.

The use of plastic substrates has already allowed Samsung and LG to produce curved OLED panels, and the next evolution will be increasing this flexibility and panel durability to survive the stresses of repeated bending and flexing. There’s a growing expectation that Samsung, possibly Lenovo, and maybe others will release their first generation designs sometime in 2018.

First generation bendable products are likely to be small runs, possibly limited to select regions where these type of products will have the most appeal.

However, the first launches of any such products are likely to be small runs, possibly limited to select regions where these new designs will have the most appeal. These may possibly be reserved for home markets like South Korea or China.

It’s likely that display manufacturing techniques still need longer to mature before a major high-end consumer launch could take place. Plastic layers will need to be made thinner still, yet panels will still need to be even more durable, and yields high enough to make manufacturing profitable. We also haven’t seen how these tweaks to production will affect important display aspects like resolution, color reproduction, and brightness.

There are still a lot of unknowns when it comes to highly flexible displays and products. It’s likely that OEMs will play it safe with smaller launches to avoid putting consumers off the idea if first generation products aren’t quite up to scratch. It may not be until beyond 2019 before a major bendable smartphone launch hits the market.

Wrap Up

OLED display technology has been around in smartphones for years now, but it’s only just hitting its prime. With Apple, Samsung, LG, and others increasingly turning to high-end OLED panels in their flagship phones, we are bound to see more and more companies pick up the technology for bezel-less or other bold designs. Further down the line, the prospect of flexible products will keep the technology relevant for years to go.

To fill all this demand, Samsung Display, LG Display, Japand Display, and an array of manufacturers in China are pumping major investments into the OLED production capabilities, which will come to fruition throughout 2019. Over the next couple of years, OLED looks ripe to hit a stride with bountiful demand and supply.

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