OLED Makers Target Active Matrix Displays at New Apps

Active matrix is set to open up newer application segments for OLED makers. So far used in MP3 players, watches and as mobile phone sub-displays, makers are now looking at a much broader market, bigger size displays and newer application segments as they develop active matrix OLED displays. While the initial target for most companies is the main display in mobile phones, these displays are expected to find their way into a slew of application segments from automobile displays, medical equipment and for special applications such as displays to be used in extremely cold conditions (where crystals in TFT-LCDs tend to freeze).







Strong demand for the product has become the prime motivator for a number of TFT-LCD display makers to set up OLED production lines. Display Search analyst Jane Hsu says, “The number of OLED suppliers has gone up from six in 2003 to 21 in 2004. I expect the number of makers to double by 2006 as more traditional display makers enter this line.” Auo Optronics and Topoly are among the major TFT-LCD makers now setting up OLED lines. Both Auo and Topoly have already demonstrated pilot active matrix displays. Commercial production of these displays is expected to commence from the second half of 2006.







Display Search estimates OLED shipments to grow from 17.7 million pieces by the end of this year to around 23.3 million by 2006. According to Hsu, much of this growth will be driven by the increasing availability and adoption of active matrix displays. The market for passive displays—the current best seller—is expected to slowdown to the extent that there might be an overcapacity of passive displays.





The key consideration for growth in the OLED market over the next two quarters will be MP3 players. This is currently the largest application segment for passive matrix OLED displays. However, intense price competition among MP3 players is having a similar impact on the price of passive displays. The displays are already the biggest component in the MP3 bill of materials and MP3 makers are pushing for lower OLED prices. The fact that TFT-LCD prices are falling is also putting pressure on passive OLED displays. Overall passive makers believe that there is already an overcapacity in this line.







The problem of falling prices is exacerbated by makers continuing to increase production capacity. RitDisplay and Univision lead manufacturers in passive displays. They produce monochrome, area and full color displays, used in MP3 players and as sub-displays in mobile phones. Says Bert Hsia, manager of global marketing department Univision, “We have set up a second manufacturing line here. This will take our capacity from 60 to 150 k each month.” The new line will become active by the forth quarter of this year. In terms of display size, the mainstream size is 2”. This is expected to remain till the end of 2006. However, manufacturers by then should begin rolling out larger display sizes in the active matrix configuration. A company spokesmen for Auo and Toppoly estimate that 2.5” active matrix displays will be the main market driver by Q4 2006 and into the early part of 2007.