SDC Makes $11B QD-OLED Investment Official – What We Learned
On September 30th, we published that SDC would spend around $11B on its QD-OLED fabs. On October 10th, they made it official at an agreement ceremony held at its Asan 2 campus. It was announced that:
- 13.1 Trillion KRW or $11.0B will be spent from 2019-2025 on QD OLED R&D and production. 10 Trillion KRW or $8.4B will be spent on capex with 3.1 Trillion ($2.6B) spent on R&D according to South Korea’s Ministry of Trade, Industry and Energy.
- The T8-1 line converted for QD-OLED production will be renamed Q-1.
- 125,000 substrate/month worth of a-Si LCD production capacity will be converted to 30,000 QD-OLED substrate per month capacity for the first phase of Q-1. The large differential is the result of:
- 12 mask oxide TFT backplane vs. 4 mask a-Si TFT backplane
- Additional space required for OLED frontplane equipment including open mask evaporation, IJP for QDs and encapsulation.
- The fact that color filters will still be required initially on top of the QDs.
- SDC’s G8.5 LCD capacity will eventually be completely converted to QD OLEDs and will result in at least 100,000 QD-OLED G8.5 substrates per month. It was also reportedly said that SDC expects to convert or shut down all its LCD capacity by 2025.
- Engineers currently working on LCDs will also begin working on QD-OLEDs.
- 81,000 new jobs are expected to be created on QD displays over this period.
- SDC will not cut the G8.5 substate in the frontplane process.
- Thin film encapsulation is expected to be implemented after the OLED evaporation step. With the QD color conversion layers produced on a separate substrate, the glass to glass cell will serve as encapsulation for the QDs.
- Production is expected to begin in 2021 with commercial products expected from 2022.
- The biggest priority will be improving yields. At 85% yields, they expect to be able to produce 1M panels per year from the 30K line.
- South Korea’s Ministry of Trade, Industry and Energy is also expected to support LGD and SDC’s OLED investments with 400B KRW ($340M) into next generation displays over the next 7 years.
- Samsung Visual Display has yet to comment on their adoption plans for QD-OLEDs. As we indicated in our 9/30 article, VD is enjoying controlling the supply chain for QDEF panels, but QD OLEDs gives them no such advantage. They will just be another customer for a completed module.
- With its top emission structure, we expect SDC to focus on 8K QD-OLEDs, which may increase VD and others interest in it. We also expect Sony to be an early customer.
- The Q1 and future fabs will adopt MMG to produce 65” and 55” at the same time.
- Now that the Q1 line has been officially announced, we expect SDC to issue POs to its equipment suppliers with deliveries in October 2020.
- At the moment, the company is not planning on switching its G7 line from LCDs to QD OLEDs.
Samsung Display CEO DH Lee indicated, “Quantum dots are our future growth vision of the large display industry.” With this investment, the company hopes to “create more jobs and become a company that can present hope, and not despair, to the younger generation, and to share growth.”
South Korean President Moon Jae-in attended the agreement ceremony and said, “The display industry is Korea’s manufacturing backbone. It is important to maintain the top spot of the global display market with game-changing technologies. Following LG Display’s 3 trillion-won investment in large OLED panel production in July, Samsung Display’s latest investment plan brightens prospects further. This ceremony will be the starting point for us to become the powerhouse in display and manufacturing that will be so far ahead of other countries while maintaining the world’s top competitive edge in display and being self-reliant on key materials, parts, and equipment.”
Samsung Vice Chairman JY Lee said, “Displays are our ‘dream platform’ that connect us from home to office, and are used anywhere for industries, education and medicine. We will invest over 13 trillion won only for next-generation displays and make new jobs for young people despite the difficult economic situation.”
To ensure they are not dependent on overseas equipment and materials suppliers, Samsung is expected to try and internalize core technologies from the onset of this project. It was said that Samsung is going to raise the level of collaboration with South Korean companies and ensure there is a Korean supplier even when there is a dominant overseas supplier. It is also going to strengthen industry-university collaboration by establishing a ‘Display Research Center’ with South Korean universities to train students so that they can specialize in displays in the future.
Costs and lifetime will be the biggest challenges for SDC with 3X as many masks on the backplane, limited oxide and IJP experience and the use of thin film encapsulation. Relative to LGD’s WOLED process, there will initially be around 50% more masks on the backplane, the OLED frontplane process will have one less OLED deposition step but a more complicated encapsulation process and the color converter and color filter process will be more challenging. A color filter will likely be required initially to prevent color mixing, maximize gamut and help unplanned QD emissions from the front of the display which will reduce its brightness advantage. The QD emissions also need to be redirected forward since 62% of the light emits to the side or backwards according to Samsung. Although the top emission structure and use of QDs should result in a brightness advantage and easier implementation higher resolution displays than LGD’s WOLEDs, the use of the lowest lifetime OLED material, blue, will require Samsung to implement compensation schemes to minimize the aging process. Unlike LGD, Samsung won’t have to deal with differential aging of the OLED materials however since only blue is used. Our latest assumptions regarding equipment spending and timing for each phase can be found in our Quarterly Display Capex and Equipment Report.
Samsung’s Asan Campus Where Q1 Will Be Located