Samsung formally introduced the Galaxy S9 and S9+ on Sunday February 25th during the opening of 2018 Mobile World Congress and the Closing Ceremonies of the 2018 Winter Olympics. As shown in Figure 1, relative to the iPhone X it features higher resolution, a higher screen to body ratio, lighter weight despite a larger battery and a significantly lower price. Hardware differences between the S9 and S8 appear to be limited to the S9 being slightly shorter and thicker and heavier than the S8. Relative to the 8+, the S9+ appears to have a slightly higher screen to body ratio of 84.2”, a second 12MP camera and is slightly shorter, wider, thicker and heavier. It is also $10 cheaper.
Figure 1: Samsung’s Galaxy S9/S9+/S8/S8+ vs. Apple’s iPhone X
Figure 1 demonstrates the pricing power that Apple has over Samsung as from a display and form factor standpoint, you can certainly argue that the S9 is a better value. However, there is a time and content compatibility cost to switch the iPhone to the Galaxy, which many uses are unwilling to incur.
Other features introduced on the S9 include a new Super Speed Dual Pixel Camera, which some reviewers are calling the best smartphone camera on the market. It includes dual apertures with one f/2.4 aperture for crisp pictures of well-lit scenes and a second f/1.5 aperture for clear low light photos. It also embeds a DRAM chip in the camera to process data right away rather than use the phone’s main RAM, which reduces noise. It also features a Super Slow-mo feature so slow that it can take 6s to play 0.2s worth of content. It captures 720p vide at 960fps. The clarity of the Super Slow-mo videos are reportedly amazing.
Samsung also introduced its take on the iPhone X’s Animoji’s through its AR Emoji’s. It is quite similar as you can select a character or you can scan your own face to create your own 3D avatar and it will mimic your expressions, head gestures, mouth movements, etc.
There is a fingerprint sensor on the back of the phone as well as built-in iris scanning which Samsung claims results in only a 1 in 10 million change of someone other than you unlocking your phone with an iris scan. They claim it is 10 times more secure than Apple’s Face ID.
Reviewers also claimed that the S9/S9+ displays were noticeably brighter than the S8/S8+ versions. We will have to wait for Ray Soneira to measure them. Despite the higher brightness, reviewers also claimed that the Snapdragon 845 chipset provided more efficient power consumption and faster speeds. The S9+ is reportedly able to last a day and a half of usage on a single charge. Just imagine what it will be when there is a high efficiency blue OLED material available.
Will the S9 and S9+ improve Samsung’s fab utilization issues? We will quantify its shipments and utilization in our next Quarterly OLED Shipment and Fab Utilization Report.
Several reports this week indicated that Samsung may be contemplating a new effort to make OLED TV, but a statement late in the week seemed to dispel these rumors, at least for now. The world’s biggest TV maker will continue to push for innovative technologies in TV displays, and since Samsung is the dominant player in OLED displays for phones, rumors about their participation in OLED TVs are about as common as Russian athletes doping at the Olympics.
A few years ago, Samsung had announced that OLED was the future of TV. At the CES show in January 2012, Samsung revealed their plan to introduce OLED TVs, starting with a 55” Full HD (1080p). While both Samsung and LG were pursuing OLED TV at that time, their approaches were fundamentally different in their display architecture, in several aspects:
Samsung’s push for TV innovation via Quantum Dots and Micro-LED is not without its problems. Although Samsung remains the #1 brand for TV worldwide and in the US, its position in the US has slipped a little in terms of market share, especially among the premium segment over $1000 (“TV Shopping on Christmas Weekend – No Deals”, DSCM 12.26.2017). In that premium segment, Samsung faces not just LG but also Sony brand TV sets using LGD OLED panels, and both Sony and LGE have consistently achieved higher operating margins in their TV business than Samsung (see Figure 1).
Therefore, it’s quite natural to think that Samsung will return to OLED technology to boost its fortunes in TV. The Korean site ETNews reported last week that Samsung’s Display division (SDC, not the TV division which is Visual Display) is restarting OLED TV research and development. SDC is organizing 300-400 researchers for its OLED TV R&D, under a large TV business unit led by a large-size LCD TV Vice President. ETNews reported that the researchers would be pursuing oxide TFT technology as well.
The ETNews article also introduced an intriguing new concept, the QD OLED. This new technology approach combines the benefits of quantum dot technology with those of OLEDs and has an interesting roadmap. One implementation includes the use of the blue OLED as the light source with red and green added through a quantum dot color filter. The idea of a quantum dot color filter has been made more realistic by the recent announcement of a breakthrough in quantum dot printing (“Nanosys and DIC Announce Breakthrough on Quantum Dot Printing”, DSCM 12.03.2017).
The attractiveness of QD OLED can be seen by comparing its structure to that of LGD’s White OLED approach, shown in Figure 2. The White OLED stack includes 17 layers deposited on the substrate (p/n Charge Generation Layers represent 2 layers each time), plus four sub-pixels.
Figure 1: Quarterly Operating Margins of TV Divisions of Top Three Brands
Source: Company earnings releases, DSCC Analysis
Figure 2: LGD White OLED Stack Structure
Source: DSCC/OLED-A Quarterly OLED Material Report
In contrast, the hypothetical QD OLED product architecture includes only ten layers in the OLED stack (see Figure 3). With the expectation that quantum dots can efficiently convert blue light to red and green, the QD OLED offers the promise of better brightness efficiency than white OLED, and better color saturation at peak luminance.
There’s just one big problem with the QD OLED approach: it relies on blue OLED, which is the weakest link in OLED displays. Commercially available OLED displays for both TVs and smartphones use fluorescent OLED blue emitter material, which is substantially less efficient than the corresponding red and green phosphorescent emitters supplied by Universal Display Corporation (UDC). Therefore, this Samsung QD OLED rumor was coupled with a related UDC rumor, that UDC would announce a commercially available phosphorescent blue material in its earnings call on February 22nd. Unfortunately for UDC investors (see "UDC Completes Terrific 2017, but Has Trouble in 2018," DSCM 02.26.18), the company made no such announcement, and phosphorescent blue does not seem to be imminent.
Figure 3: Representation of QD OLED
It should be noted that the blue OLED with a red and green QD color filter is not likely the only implementation of OLEDs and QDs. In terms of manufacturing, the blue OLED can either be put down with an open mask VTE system or ink jet printed. Since no patterning is required in the implementation in Figure 3, we would expect an open mask VTE system to be used as a VTE system is still needed for the common materials and it would just require an extra chamber for the blue OLED. In addition, the red and green color QD color filters can be deposited via photolithography or ink jet printing. Photolithography would likely be the faster and high yielding solution while ink jet printing would have lower material costs. However, we heard rumors that Samsung may be looking at the implementation in Figure 3 as the first step towards ink jet printing QLEDs. So, Samsung may next explore printing blue OLED emitters and red and green QD emitters. Would such a system work? Soluble blue OLED emitters are well short of where they need to be from a lifetime perspective, but are making great progress. UDC’s organic vapor jet deposition could be a solution here, but would they use it for just one color? While Samsung depends on other companies for OLED materials, it is developing its own quantum dot materials and will likely to look to incorporate them into its TVs sooner than later. It would certainly look to incorporate a high efficiency blue OLED material from UDC or Cynora, but may also likely look to incorporate a blue QD material from its QD material group once its lifetimes have matured. At that point, Samsung will have developed a true QLED, which will create less confusion for its customers and from a branding standpoint. Will a true QLED TV outperform an OLED TV? It appears Samsung believes it will.
The ETNews article on QD OLED erroneously reported that Samsung demonstrated 55” and 65” QD OLEDs at the CES show in January 2018. DSCC’s Ross Young reported on the Samsung Display exhibit (“Inside the Samsung Display Suite – Foldable, OLEDs and QDs Impress”, DSCM 01.15.2018), which included an 18” QD OLED prototype, not the larger TV sizes. However, the ETNews article has enough information to make the rumor credible, and it gained credence by a similar article from Business Korea saying that the restoration of OLED TV activity was ordered by Samsung Electronics Vice Chairman Lee Jae-yong after his departure from prison.
In response to these rumors, Yonhap News reported that Samsung Visual Display’s Vice President Han Jong-hee denied the story, saying that Samsung is sticking with its two-track strategy for the premium TV market, developing both QLED and MicroLED TV displays. Although such a statement would seem to dispel the idea of QD OLED TV, those who watch Samsung closely know that its business divisions are fully independent. The denial came from Visual Display, but the rumored QD OLED activity was not in Visual Display but in Samsung Display, a different division.
It should also be pointed out that Samsung had no choice but to deny the OLED TV development efforts because if it acknowledged them they would be conveying to consumers that OLED TVs are superior and encouraging customers to buy from LG now and delay purchases from Samsung. Any acknowledgement would certainly minimize claims by their TV group around their 2018 TVs, which look to be a significant improvement over their 2017 line with the adoption of local dimming backlights producing higher contrast ratios and darker black levels.
Samsung Visual Display will hold a special product launch event in New York City on March 7th, and Bob has received an invitation to the event which will launch Samsung’s US product line, to be led by Han Jonghee. I look forward to reporting on this event to DSCC subscribers
By Ross Young
I recently gave a talk at the 2018 Flex Conference where I discussed the current utilization challenges faced by Samsung’s flexible OLED fab. Of course, many of these challenges have been caused by the introduction of full-active or bezel-less LTPS LCDs. Until full-active LCDs were introduced, it was easy to tell which smartphones were flexible OLEDs. They were the ones without a bezel. The whole front of the smartphone was the display. Samsung even called the display on their Galaxy S8 an infinity display and it used a flexible OLED. As another speaker pointed out, the flexible OLED can be bent behind itself, as shown in Figure 1, and allow the electronics such as the display controller to be located behind the display rather than creating a bezel at the bottom of the display. This capability can result in a smaller and lighter smartphone. On the other hand, it worsens the panelization and therefore can increase the cost of producing this display. The 5.85” flexible OLED that the user sees, may really be a 6.1” OLED with 0.25” not viewable which increases the cost by the number of displays lost per substrate which can result in a 10% cost increase. In addition, the chip on film (COF) packaging used to connect the flexible display to the electronics is also more expensive. So, part of the reason why Apple’s iPhone X flexible OLED is more expensive is due to the desire to minimize the bottom bezel. Other brands do not waste the active area of the flexible display by bending it behind itself. But, is this capability observable to the average user? Do they care? Are they willing to pay a large premium for it? Do they recognize that only flexible OLEDs can achieve a no bezel look at the bottom of their smartphone? Does it really translate to a weight and thickness advantage?
Figure 1: Bending the Flexible iPhone X to Save Space
In fact, if you compare the 5.85” iPhone X flexible OLED with the 6.0” Oppo F5 LTPS LCD as shown in Figure 2, the Oppo F5 is actually 22g or 13% lighter and has the same thickness despite a larger viewable display, a larger battery (3200 mAh vs 2716 mAh) and a larger camera (16 MP vs. dual 12MP sensors). It has nearly as large of a screen to body ratio as Apple at 78% vs. 83%. Its resolution isn’t as high and of course its contrast isn’t as good, but the iPhone X costs more than 2X as much. The Oppo F5 looks like a great phone. The iPhone demonstrates the additional cost to deliver near perfection from a screen to body ratio, but is the extra mile really worth a 152% higher price? In price sensitive markets like China, which approach will do better? While there is only one iPhone X, there are many phones similar to the Oppo F5, making it difficult for flexible OLED smartphones to succeed there.
Figure 2: iPhone X vs. Oppo F5 Specs
In looking at how Chinese smartphone brands market their displays on their smartphones, there is no differentiation between a rigid OLED and a flexible OLED. Yet, the flexible OLED carries around 23% higher capex costs, lower yields and significantly higher material costs from the polyimide, thin film encapsulation, more expensive cover glass and potentially more expensive packaging materials. As shown in Figure 3, the flexible OLED is priced significantly higher, more than 3X the price of a rigid OLED and more than 4X the price of a LTPS LCD. You would think that smartphone brands would try to differentiate the products they are paying such a premium for given their higher costs and higher prices. Maybe Samsung or the OLED Association needs to brand and differentiate flexible OLEDs in some way so they are perceived as greater value to consumers and smartphone brands.
If you look at Figure 4, it is quite difficult to determine which smartphones are the flexible OLEDs, which are the rigid OLEDs and which are the LTPS LCDs. With the advent of full-active LTPS LCDs, they all look alike. In fact, most people cannot tell which are which. Yet, the panel price differences are dramatic. The exact type of display for each smartphone is shown in Figure 5. As a result, it is riskier to go with the flexible OLEDs as it means brands must sell at higher prices against lower priced products that look similar and are not clearly differentiated. At a 40% gross margin, the $56 price difference between the flexible and rigid OLEDs translates to a $93 street price difference and the $64 price difference between the flexible OLED and LTPS LCD translates to a $107 street price difference. This significant price difference is an even bigger risk in price sensitive markets like China.
Based on the fact that there is some differentiation and premium assigned to OLEDs vs. LCDs and that the price difference between rigid OLEDs and LTPS LCDs is so small, one would think rigid OLEDs would be more popular in price sensitive markets in China. From what I have seen, rigid OLEDs were slower to adopt the bezel-less look in the 5.5” and smaller configurations and LTPS LCDs were available from multiple sources, so full active LTPS LCDs have taken some share from rigid OLEDs resulting in low utilization at Samsung’s rigid OLED fab. However, now that Samsung is employing bezel-less at 6” and even 5.5” and the price gap is narrowing, Samsung is likely to take some share back. Nonetheless, there is little rigid capacity coming online. A large majority of the new mobile OLED capacity coming online is for flexible displays as shown in Figure 6. This is due to the Chinese government willing to subsidize it and the promise of foldable OLEDs.
Figure 3: Flexible OLED, Rigid OLED and LTPS LCD Prices
Source: DSCC’s Quarterly OLED Shipment and Fab Utilization Report
Figure 4: Flexible OLED, Rigid OLED and LTPS LCD Smartphones – Which is Which?
Figure 5: Flexible OLED, Rigid OLED and LTPS LCD Smartphones – Which is Which?
Figure 6: Mobile Capacity Share – Flexible OLEDs Taking Over
Source: DSCC’s Quarterly Display Capex and Equipment Service
In my talk, I pointed out that the current flexible OLED utilization challenges at Samsung, shown in Figure 7, won’t be easily rectified as Samsung is overly dependent on a single model from a single brand and Apple is not likely going to lower its price. Few high volume, high-end new smartphones will be introduced in the 1H’18 other than the Galaxy S9/S9+ at the end of this month and the S9 is not expected to be aggressively priced. Therefore, 1H’18 will be tough for Samsung Display. As their capacity is rising (shown monthly in our Quarterly OLED Shipment and Fab Utilization Report), demand is falling, thus, costs will be higher and margins will be lower. This situation will likely be resolved in 2H’18 on better positioning due to lower prices resulting in more design wins and less dependence on a single customer and model. At the same time, the current weakness will result in Samsung pursuing other OLED applications and foldable displays more aggressively.
While the current implementation of flexible displays offers limited differentiation, the differentiation and value of foldable OLEDs will be obvious and enable flexible OLED suppliers to boost prices and margins. Let’s hope we see foldable OLEDs in 2018. We are currently working on a foldable report that discusses the challenges associated with producing foldable OLEDs at high yields. I have learned a lot so far and look forward to publishing it this quarter.
Figure 7: Samsung's OLED Fab Utilization
Source: DSCC’s Quarterly OLED Shipment and Fab Utilization Report