China looks to break into small screen AMOLED market in 2015

A Shanghai company, EverDisplay Optronics, has announced plans to start mass-producing active matrix (AM)OLED panels later in 2014.

EverDisplay
EverDisplay demonstrated prototype OLED displays in 2013. These were for 5.5-inch/6-inch (140mm/152mm) smartphone screens and made on a gen 4.5 (730mm x 920mm) scale.

EverDisplay has now taken the decision to develop this lead into a mass-production line capable of making 15,000 units per month. The company leads a pack of Chinese firms aiming to capitalise on this display technology. According to the Export Import Bank of Korea the initial market will be in smartphones made for domestic Chinese consumers.

Visionox
Closely following EverDisplay is Visionox, a company spun-off from Beijing's Tsinghua University. On 16 April, it announced the development of a 4.3 inch OLED display using an RGB sub-pixel arrangement structure, to achieve a resolution of 570ppi. The company states: '[This] technology has laid a solid foundation for mass production and

application

of AMOLEDs.'

Visionox is reported to be recruiting experts in OLED production from Korea, the US and Taiwan to help establish a new manufacturing line, which it may run in conjunction with BOE Display. Another company based in the capital, BOE has been pursing small AMOLED screens for several years.

Domestic smartphones
Analysis says that the new Chinese OLEDs will initially be used by domestic smartphone producers like Huawei, to produce low and medium-priced units - principally for Chinese users. Digitimes Research predicts that out of 422 million smartphones sold in the country in 2014, 278 million (66%) will be locally made.

As production is stepped up, reduced Chinese labour costs will be translated into lower price panels - provided production quality can be assured. Thus OLED panels from companies like EverDisplay will enjoy a competitive advantage over Samsung, which currently accounts for 90% of world OLED supply. This threatens the Korean firm's dominance as a supplier to both the smartphone and burgeoning wearable electronics markets.

Challenging Samsung
Samsung will likely be forced to look to other display innovations to maintain a technical lead for the screens it supplies into its own brand and other high-end smartphones. It has already announced plans for a gen 6 (1,500mm x 1,850mm) production complex at Asan for flexible screens. This, like EverDisplay's line for rigid OLED sheets, is scheduled to come online in the second half of 2014. Samsung's own Galaxy S6 will be one of the first handsets to carry the display.

Over-investment risk
At least three other Chinese companies are reported to be investigating AMOLED production as they aim to position themselves in a booming market for the future. UBI Research predicts that the global market for OLED materials will undergo 50% growth each year until the end of the decade - rising from $7 billion (€5.1 billion) in 2014 to hit a $75 billion in 2020.

UBI estimates that there will be a transformation in the market as it grows making too tight a focus on smartphone displays a liability. Although they account for 93% of today's OLEDs, by 2020 increased use in large television screens and other products mean smartphone displays will command just 21% of demand.
Concentrating on the low to medium-price handsets from Chinese producers is attractive for now; but if domestic consumers choose to more technically sophisticated foreign models in the future, there is a risk that too much investment will lead to an oversupply as demand for the devices shrinks. This would be similar to the glut, created by aggressive Chinese moves into LED lighting manufacturing at the beginning of this decade.