OLEDs are potentially a dream come true to the smartphone industry, enabling manufacturers to raise prices by improving display performance, increasing display sizes and enabling innovative form factors like curved, flexible, foldable, rollable, etc. We expect OLEDs to enable greater differentiation in the smartphone industry for years, which should keep prices high. OLED panel suppliers should be major beneficiaries, as smartphone brands will be clamoring for OLED panels for years until the market is saturated with OLEDs, and even then there will be opportunity to differentiate and create strong demand for more advanced form factors. With OLED demand expected to be tight until the market is saturated, which panel suppliers and brands are likely to benefit?
Figure 1 shows smartphone shipments in 2016 and 2017. As indicated, the top 5 players are Samsung and Apple and Chinese brands Huawei, Oppo and Vivo with the Chinese brands enjoying the fastest growth. As shown in Figure 2, in 2016, Samsung consumed most of the OLED smartphone panels at 264M or 72%. Oppo and Vivo each accounted for 11% of the OLED volumes. 0% of Apple’s panels were OLED with Huawei at just 2%.
Figure 1: Smartphone Shipments by Brand
Figure 2: 2016 Smartphone Display Procurement by Brand
In 2017, OLED smartphone panel shipments are expected to grow 42% to 525M. Samsung is expected to consume 55% of smartphone panel shipments in 2017 or 290M as shown in Figure 3. Apple is expected to consume 75M or 14% of OLED smartphone panel shipments followed by Oppo at 63M and a 13% share and Vivo at 55M and a 10% share. Oppo and Vivo have secured supply with Samsung. Conversely, Huawei’s share of OLED panel shipments is insignificant and is expected to remain behind that of Oppo and Vivo. Huawei is not engaged sufficiently with Samsung and will likely need to wait until BOE ramps from 2020 to capture significant OLED volumes. As shown in Figure 4 we believe it will take until 2020 for Huawei to secure enough OLED capacity to enable OLEDs to account for a majority of their panel procurement. We expect Apple to quickly ramp to 100% OLED, following Samsung, which will limit the number of OLED panels available for other brands as the OLED smartphone market climbs to over 1.2B units in 2021 as shown in Figure 5. In fact, we show Apple and Samsung accounting for 72% of 2016 OLED smartphone panel shipments, 70% in 2017, 72% in 2018, 64% in 2019, 57% in 2020 and 51% in 2021. Thus, the OLED smartphone market will basically move from a monopoly to a duopoly with Samsung and Apple controlling at least a 50% share through 2021. But what does the panel supplier situation look like? Can any panel suppliers disrupt this duopoly and who will be the 3rd OLED supplier to Apple?
Figure 3: 2017 Smartphone Display Procurement by Brand
Figure 4: 2016 - 2021 OLED Smartphone Panel Procurement Forecast
Figure 5: 2016 - 2021 OLED Smartphone Panel Procurement
In our Quarterly OLED Supply/Demand and Capital Spending Report, we track and forecast OLED fab glass input, yield and output by fab by application. This enables us to track each panel suppliers’ shipments by application. Mobile OLED output share is shown in Table 1. As indicated:
Table 1: Mobile OLED Output Share by Panel Supplier