Electronics Production | May 24, 2006

Competition intensified in the OLED business

Competition intensified in the Organic Light-Emitting Diode (OLED) panel business in 2005, causing market share among the major players to become more diversified, according to iSuppli Corp.
Samsung SDI retained its position as the number-one OLED supplier in 2005, with a 27.3 percent share of worldwide unit shipments. This put Samsung SDI less than 1 percentage point ahead of number-two supplier RiTdisplay Corp., which accounted for 26.9 percent of unit shipments. In
contrast, Samsung in 2004 shipped 43.7 percent of all OLEDs, giving it a 19 percentage point lead over RiTdisplay Corp. The table below and attached presents iSuppli's estimate of OLED unit
market share in 2005.

iSuppli Table: Top-Five OLED Display Suppliers in 2005 (Ranking by Share
of Worldwide Unit Shipments)

2005 Rank, 2004 Rank, Company, 2005 Unit Market Share, 2004 Unit Market Share
1, 1, Samsung SDI, 27.33%, 43.69%
2, 2, RiTdisplay, 26.87%, 24.62%
3, 3, Pioneer, 15.08%, 20.18%
4, 4, Univision, 10.13%, 6.35%
5, NA, LG, 6.12%, NA

Others 14.47% 5.16%

Source: iSuppli Corp. May 2006

While RiTdisplay closed the unit market-share gap with Samsung, it remained well behind its South Korean rival when it comes to OLED revenue.

"RiTdisplay's increase in unit shipments was due to rising demand for low-end OLEDs for MP3 players," said Dr. Kimberly Allen, director of technology and strategic research for iSuppli. "The company and its Taiwanese competitors-accounted for by the 'other' category in the table-specialize in these types of displays, explaining their rise. Meanwhile, Samsung continued to sell its line of higher-end OLEDs, which caused its unit market-share lead to dwindle-but allowed it to retain its dominance in revenue."

Samsung SDI accounted for 36.1 percent of OLED revenue in 2005, compared to 21.5 percent for RiTdisplay, according to iSuppli. Pioneer retained its third-place position in OLEDs in 2005. The company managed to avoid fluctuations in mobile-phone subdisplay and MP3 demand that were caused by Chinese OEMs. Rather than selling to the Chinese, Pioneer mainly serves Japanese and Korean customers.

Despite the rise in unit sales, 2005 was a disappointing year for OLED suppliers.

The 2005 OLED market reached 53 million units, up 58.9 percent from 33.2 million in 2004. While this may appear to be prodigious growth, suppliers had expected a more robust rise in shipments.
OLED panel sales dipped at the end of 2005, especially for products used for MP3 players and for screens employed as subdisplays in mobile phones.

Sales of OLED panels for MP3 players fell short of the panel makers' expectations. One reason is that the Apple iPod spurred a shortage in flash memory, decreasing sales of other manufacturers' MP3 players, which typically use OLED displays. Other reasons this market faltered included the dramatically declining price, which is down to as low as $4 per panel, and the instability of Chinese OEMs.

In 2006, the market is expected to rise to 88 million units, up 66.8 percent from 2005. The worldwide OLED market will grow to 195 million units in 2009, and 364 million units in 2012, iSuppli predicts.
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