In the battle for high-end TV, OLED has secured a top spot, driven by outstanding picture performance and innovative features from LGE, Sony, Panasonic, and other brands. While these TV makers are enjoying their premium position, the business battle to make OLED TV panels profitably has a long way to go. While OLED TV may capture the top spot for prices, the amount of premium that OLED TV brands can charge is limited because the best LCD TVs are quite close in performance. Therefore, the profitability of LGD in making OLED TV panels will be determined by their ability to reduce cost. A new report from DSCC, the Quarterly Advanced TV Panel Cost Report, describes the efforts LGD is making to bring OLED panel costs down.
Some of the contents of the Advanced TV Cost Report will be presented by DSCC’s Yoshio Tamura at this week’s sold out DSCC Japan Seminar #1: Roadmap to Display OLEDization, to be held on October 27th in Tokyo. The Japan seminar will include material in Japanese.
The Advanced TV Cost Report will cover both OLED TV panels and advanced LCD TV panels including such technologies as Quantum Dots, UHD (4K) and 8K. This week in the DSCM we will discuss four methods that LGD is trying to reduce OLED TV panel costs: Multi-model Glass (MMG), Top Emission, Inkjet Printing (IJP) of OLED stack materials, and China manufacturing.
Multi-model Glass (MMG) has been used intermittently in the LCD industry for years, as a way to broaden the product portfolio from a limited manufacturing base. One of the reasons for the great success of the flat panel industry has been its ability to scale to a wide range of screen sizes, driven by successively larger generations of substrate mother glass. In OLED TV, though, LGD has a single Gen 8.5 fab, which is highly efficient at making 48” and 55” panels, but much less efficient at making the larger panels that are required for the premium TV market today. The competitive situation will get worse in 2018 when Gen 10.5 LCD fabs from BOE and CSOT will ramp up, with the capability to make 65” panels at 8-up and 75” panels at 6-up with high efficiency at great volumes.
With MMG the substrate is divided into multiple product configurations, efficiently using the entire mother glass as shown in the figure below. One of the reasons that MMG has seen limited use in the past was that it required multiple exposure settings, and thus the panel maker sacrificed capacity for effective material utilization. For LGD’s OLED fab, new exposure equipment provided by Canon will allow these configurations starting in 2019 without such a sacrifice in capacity.
MMG Configurations for Gen 8,5 vs. Standard Modes for Gen 8,5 & Gen 10.5
As a way to estimate the impact of MMG, consider the metric of viewable display utilization, defined by the equation:
Total Viewable Display Area / Total Substrate Area
The viewable display utilization of 55” 6-up on Gen 8.5 is 90%, certainly an efficient cut, but for both 65” and 75” on Gen 10.5 the viewable display utilization is 93%. Since almost all of the cost of a flat panel display, especially an OLED display, are incurred across the entire substrate, the cost of the display is directly related to the inverse of this utilization. The cost of 65” on Gen 8.5 in a standard configuration of 3-up is driven substantially higher because the viewable display utilization is only 63%, so the effective cost compared to an efficient Gen 10.5 is (93% / 63%) = 148% of the efficient Gen 10.5 cost.
By use of the MMG as shown above, the configuration of 3-up 65” combined with 2-up 55” allows for a viewable display utilization of 93%. Therefore, using MMG LGD will be able to make 65” panels at a cost close to the equivalent cost on a Gen 10.5.
The second improvement area is driven partly by cost reduction but also by requirements for performance improvement. The switch from Bottom Emission currently used for OLED TV panels to Top Emission will be required for making 65” 8K panels. Because Bottom Emission loses the light output blocked by the sub-pixel circuit, the shift to top emission allows for a 10% improvement in aperture ration (and therefore light output, all else being equal). Glass makers will be pleased when LGD shifts from the metal encapsulation used in their bottom emission systems to a color filter glass substrate encapsulation.
DSCC estimates that LGD has a pilot capacity of 3k / month of top emission capacity as of today, with plans to increase that to more than 10k / month, and mass production on E4-2 starting in 2019.
The current method for deposition of OLED stack materials in both smaller sizes for smartphone displays and larger sizes for TV displays is Vacuum Thermal Evaporation (VTE); in smaller sizes the material is deposited through a fine metal mask (FMM) and in larger sizes LGD’s White OLED system uses an open mask (which masks only the non-viewable-display portion of the substrate). Since VTE requires expensive equipment and uses expensive OLED materials wastefully, many companies in the industry are trying to develop soluble OLED materials to allow deposition via Inkjet Printing (IJP).
As part of the Advanced TV Cost report, DSCC has developed a cost model for OLED TV panels including both VTE and IJP depositions. The cost advantages of IJP are shown below.
55" UHD OLED TV Panel Costs on Gen 8,5, WOLED vs. IJP
Source: DSCC Quarterly Advanced TV Panel Cost Report
By depositing the Red, Green, and Blue OLED layers at the sub-pixel level, IJP allows for the elimination of the color filter required for WOLED, and the lower equipment costs for an IJP line allow for a reduction not only in the depreciation costs, but also in the indirect expenses such as water and electricity. The result is a 17% reduction in OLED panel cost. The simpler side-by-side RGB stack significantly reduces the number of OLED depositions while eliminating the color filter significantly boosts brightness.
In many industries, shifting production to China has been associated with lower wages. For this reason, most LCD module and TV assembly is done there. More recently in the display industry, however, the shift has been made to take advantage of government subsidies for flat panel display manufacturing. In the case of OLED, DSCC estimates that such subsidies can make the difference between continuing negative margins for OLED panels and achieving positive profits, as shown below.
55” UHD OLED TV Panel Costs, Korea vs. China
Source: DSCC Quarterly Advanced TV Panel Cost Report
Because of the government subsidies, depreciation cost can be reduced by 65%; DSCC estimates that only in this scenario can 55” OLED TV panels be made profitably by 2022. This scenario, although it is planned by LGD, may be prevented, as the Korean government has not approved the transfer of OLED technology to China.
OLED TV has achieved some notable successes in the last few years, but in order for OLED TV to grow beyond a high-end niche product, it needs to be made profitably. LGD and others are working hard on many different concepts to reduce the cost of OLED displays. Subscribers to DSCC’s Advanced TV Cost Report will continue to have insight on how these concepts will be brought to reality.