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Strong downstream demand for OLED key materials and components ushers in a golden development period.
Release time:
2017-05-12
Downstream demand is strong, and the explosion of key materials and components for OLED is imminent. In addition to smartphones and televisions, AMOLED screens have huge development potential in emerging AR/VR near-eye devices, automotive applications, smart wearables, and home appliances. According to UBI Research data, the growth rate of the AMOLED market size before 2020 will not be less than 20%.
The principle of light emission has changed, and the composition of material costs has adjusted significantly. Compared to LCD screens, the principle of light emission in OLED panels has fundamentally changed, eliminating many optical structures, liquid crystal layers, and backlight groups, while increasing fluorescent organic materials. In LCD panels, material costs account for about 70% of the total cost, while in OLED panels, material costs only account for about 30%. After solving the yield issues of OLED products, the cost of OLED will significantly decrease, and it will be only a matter of time before it is lower than that of LCD panels. According to UBI Research data, of the $13 billion total global OLED market size in 2015, organic materials accounted for about 8%, approximately $1 billion, and are expected to grow at a high annual compound growth rate of 35%, exceeding $2.5 billion by 2020.
The upstream key materials for OLED are entering a golden development period. The materials for OLED panels and LCD panels have technical commonalities. The key materials for OLED panels mainly include: glass substrates, organic light-emitting materials, polarizers, and packaging materials. The biggest difference between OLED and LCD in terms of materials lies in organic light-emitting materials, which are mainly monopolized by foreign companies. Domestic companies mainly participate in the supply of OLED material intermediates and monomer crude products, undertaking outsourcing orders from foreign monomer production companies. In addition, glass substrates, photoresists, polarizers, and packaging materials are also very important, and in these areas, the market is mainly monopolized by foreign companies, while domestic companies have certain competitiveness in some fields. We believe that with the rapid rise of domestic mobile brands, domestic mobile supply chain companies are growing at an unprecedented speed, and the situation where core component companies are controlled by foreign enterprises is changing, ushering in a golden development period for upstream key materials of OLED.
Key components of OLED: The upstream assembly parts of OLED mainly include driver ICs, circuit boards, and passive components. Compared to LCD, the biggest difference in OLED driver ICs is that the driver IC is placed between the control circuit and the active glass panel, making it the core of the entire driving circuit. According to CINNO's forecast, with the support of national integrated circuit industry policies and funding, the domestic panel driver IC matching rate is expected to increase to 35% in 2018. Amid the accelerated wave of domestic OLED production line construction, driver IC design is undergoing adjustments, and domestic driver IC design companies are expected to welcome historic development opportunities.
Against the backdrop of the domestic OLED panel construction wave, upstream key materials and components will usher in historic development opportunities. In terms of photoresists, Strong New Materials (300429) is actively laying out OLED material research and development; in terms of polarizers, New Fiber Technology is laying out polarizer materials and is expected to benefit from the great development of the panel industry; in terms of driver ICs, Zhongying Electronics (300327) is deeply engaged in driver IC design, waiting for the volume production of AMOLED.
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