Santa Clara, Calif.—The manufacturing cost gap between AMOLED and TFT LCD smartphone displays is closing as production yields improve, which should drive increased use in smartphone panels, according to a NPD DisplaySearch OLED Technology Report. Although manufacturing costs for AMOLED panels are currently 10-20 percent higher than for TFT LCD displays, they are expected fall below costs for LCD mobile phone displays within two years, according to the report.
Initially, AMOLED panels were forecast to cost less than LCD panels because they do not require backlighting, but production challenges kept AMOLED costs higher than equivalent LCDs, said NPD DisplaySearch. As a result, the AMOLED technology became a premium product due to its high color gamut, good contrast, and thin form factor.
“Until recently there have been few breakthroughs in the production of AMOLED displays, and the OLED industry seemed to be facing hard times,” said Jimmy Kim, senior analyst of display materials and LED at NPD DisplaySearch, in a statement. “If AMOLED costs fall below LCDs, as expected, it would lead to more opportunities for the OLED display industry, greater competition with LCD, and more choices for consumers.”
An example cited in the report indicates there is a 16 percent cost gap between 5″ AMOLED and LCD 1920 × 1080 mobile phone panels. “AMOLED panel costs are expected to fall below LCD panel costs when AMOLED production yields reach 90%, which is within sight,” according to Kim. “With cost reductions for OLED materials, the yield rate can be lower and still have a similar effect.”
Sales of AMOLED in the first quarter of 2014 grew 42 percent, reaching $2.3 billion, compared to the previous quarter, according to the UBI Research Q1 2014 Quarterly Report. However, the total growth is 78 percent considering the 36 percent sales decline in the fourth quarter of 2013 from the previous quarter, according to UBI. LG Display (LGD), which produces plastic AMOLED mobile phone panels, is expected to increase its market share for these panels in a market that is dominated by Samsung Display. However, LGD is said to be the only manufacturer that offers the 55” FHD AMOLED panel for TVs.