AU Optronics Corp (AUO, 友達光電), the nation’s No. 2 LCD panel maker, yesterday said it has signed an agreement with Japanese display material supplier Idemitsu Kosan Co Ltd to jointly develop next-generation OLED displays and patents in an attempt to catch up with rivals making the high-resolution panels for smartphones and TVs.
The Hsinchu-based company has repeatedly postponed its timetable to mass-produce OLED panels and industry analysts question whether AUO will be able to catch up with market leaders, even with Idemitsu’s help.
Rival Samsung Mobile Displays has started manufacturing active matrix OLED displays in a fifth-generation factory and has unveiled its plan to build an eighth-generation factory, according to a report by market researcher NPD DisplaySearch.
AUO plans to start production of the first batch of OLED panels for mobile devices next quarter, company spokesperson Hsiao Ya-wen (蕭雅文) said by telephone yesterday. That is two quarters behind the company’s original schedule of starting commercial operation at the end of last year.
“This [deal] will accelerate business growth in AUO’s small-sized OLED displays for smartphones and tablets, which have emerged as a new growth area in the display industry, and that of large-sized OLED displays for TVs,” AUO said in a statement.
Shipments of OLED TVs are expected to grow to more than 11 million in 2017, from 113,000 units this year, NPD DisplaySearch forecast. By revenues, OLED displays were expected to contribute more than US$4 billion to panel makers last year and to increase to more than US$20 billion by 2018, the US research firm said.
Despite potential growth in the OLED market, “AUO probably will not be able to enjoy the price premium delivered by OLED displays as it has lagged far behind its competitors,” Roger Yu (游智超), a LCD industry analyst with Polaris Securities Co (寶來證券), said.
Yu expects AUO to begin large-scale manufacture of OLED displays in the second half of next year, meaning the Taiwanese company would be at least one-and-half years late in supplying such high-resolution thin displays.
“The strategic alliance with Idemitsu will be of very limited help to AUO in speeding up its production of OLED displays,” Yu said.