The news came and went last week with hardly a whimper. Samsung vice president, H.S. Kim in the Flat Panel Development division, announced, "[The company] will not bring OLED TVs to market anytime soon. The reason, the technology is currently considered too expensive, and customers would not pay the premium, as OLED sets would cost 10 times as much as equivalent LCD or plasma HDTVs Kim says. As such, Samsung will hold off on releasing OLED TVs until the cost of the technology comes down to a level customers are willing to pay." For the complete Electronista.com article, click here.

Steve Sechrist
Senior Analyst and Editor

Well here’s a straw man question for you. Without significant infrastructure and iterative yield improvement R&D investment (like the billions of dollars poured into LCD research and fab capacity build-out), can OLED technology ever compete with big screen LCDs?

In the Alternative Displays section of our May-08 issue of Mobile Display Report, display analyst Ken Werner wrote a compelling story called, "A Display That Beat the Odds." Here, Werner lays out the following proposition: "The odds against successfully bringing a new display technology to market are immense, if not quite infinite. The problem is that the entrenched technology — CRTs not too long ago, LCDs and PDPs now– develops such a massive manufacturing infrastructure, such an efficient supply chain, and such a wealth of processing know-how for enhancing yields and reducing costs, that it’s virtually impossible for a new technology to directly compete.

Werner set up three scenarios for the new vs. entrenched technology (see chart.)

We saw Werner’s thesis play out in the Canon / Toshiba SEDs (short for Surface-conduction Electron-emitter Display) over the last two years. The SED technology was perhaps significantly better, but the JV had to rewrite their business plan as the yield improvements and price structure of the entrenched LCD/PDP flat screens continually eroded the profitability model. Canon and Toshiba planners saw their window of success close as core patent issues slowed time to market, delaying launch to the point that the numbers would no longer pencil out. Even scenario 3 is no guarantee of success.

In the large display AMOLED space, we may be facing similar odds, and the Samsung announcement could be the canary in the coal mine. While small OLEDs have established good traction in portable products like cell phones and personal devices, migrating the emissive OLED technology upstream has proven much more challenging. Adding to the problem, the life / color and yield requirements for large display TVs is much more rigorous than that of small cell phone screens and the like, as evidenced in the recent Samsung announcement.

So what will Samsung do in the meantime? The Electronista article stated, "Instead, the electronics giant will continue to focus on developing its current LCD and plasma TVs, improving their performance while making them thinner and more efficient. This will involve working on integrating 200Hz panels and LED backlighting into its sets, with more advanced local dimming LED backlighting and LED edge-lighting to be used in higher-end sets in order to make them super-thin. OLED panels can be just 3mm thick, though the TV itself would need to be 25mm thick (just over an inch), which is what LCD HDTVs are approaching."

In short, instead of investing in next generation OLED development, the number one LCD maker, Samsung, plans to put its R&D dollars into improving the entrenched LCD technology-raising the bar for OLEDs even higher.

Samsung, with multi-generational LCD fabs and billions of dollars already invested, has the luxury to choose between the two technologies; and given the current economic climate, the safe bet is on making LCDs more competitive, and more profitable.

But others, like Sony, don’t have that luxury and are committed to making (large-sized) OLED-TVs a reality in 2009. For Sony’s sake let’s hope their process engineers know something about making large OLED displays that the Samsung boys haven’t figured out. Suffice it to say, it’s going to be an interesting year in the display industry.