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Recently, I wanted to buy a TV.
After going to the mall, I found that OLED 4K HD has become one of the main selling points of sellers. After returning to the survey, it was found that in the case of a decline in global TV shipments this year (expected to be 232 million units, down 7.1% year-on-year), OLED's TVs showed a situation of rising sales, and shipments are expected to reach 6.6 million units this year, an increase of 85% year-on-year.
Nurturing opportunities in a crisis is another wave of structural opportunities.
In the track of OLED TVs, LG and Sony firmly locked in the top two (LG occupies more than 60% of the market share, Sony about 20%), far ahead. Other players such as Xiaomi and other domestic manufacturers must catch up.
Image source: Review Ape
Today, the author will take you to a handful, OLED with what dare to compete with the liquid crystal display (LCD)? As an investor, there are opportunities in the industrial chain of OLED. Will OLED be able to sit back and relax in the future?
First, OLED has sprung up, relying on hard power
The old rule is to give non-electronic enthusiasts OLED (organic light-emitting diode) first. OLED has the characteristics of self-illumination, and does not require support for a backlight (a light source behind the liquid crystal display that directly determines the visual effect of the liquid crystal display). To put it bluntly, it is bright as soon as he is electrified, and the more electricity is passed on, the higher the brightness. And it can be bent, much thinner and lighter.
Image: OLED flexible screen
Only by standing on the shoulders of giants can you see farther. Speaking of OLED, it is necessary to mention its predecessors: the picture tube (CRT) and LCD. As a second-generation display technology, LCD gradually became the first choice for consumer electronics at that time with its excellent performance of thin and light. I remember when I was in school, if anyone could have an LCD TV at home, the whole class was eager to go to his house to enjoy it.
Image: Shows the evolution of technology
Technological change is always ongoing. The hegemony of LCD has not yet sat for 20 years, and the third generation of OLED has already launched a counterattack war against LCD. There is quite a bit of a change of dynasties in the ancient history of our country. Tang, Song, Yuan, Ming, Qing, and five dynasties have a history of more than 1,000 years.
Then again, what is OLED's weapon to defeat LCD? There are three main points:
1// Screen Reminder.
For example, when the OLED mobile phone lock screen, you can display some important information through low brightness and low refresh rate. As mentioned above, the LCD screen must have the entire backlight as a support, so the function of the screen reminder is difficult to achieve. Screen reminders to save power on your phone at minimal cost.
Image source: Hardware Tea Talk
2// Response time.
The response time directly determines how you feel when you look at a moving object, and if the response time is too long, there will be a residual shadow on the screen (just like the video is stuck).
Image source: OLED response time is faster
3// Stronger contrast.
We all know that the higher the contrast, the more vivid and intense the picture, just like oil painting, and the low-contrast image is like a watercolor painting, as if adding a layer of hazy filter (often P-chart friends must know what I am talking about). The contrast of OLED is theoretically infinite, so this is also one of the weapons of OLED.
Image source: Difference in oled and LCD contrast
In addition, thinner thickness, no light leakage, and bending are also extremely significant advantages of OLED.
When one technology crushes the other in all dimensions, it is bound to be the trend of the times. It can be said that olED's first war against LCD was already divided into winners and losers on the day OLED walked out of the lab. This is also the reason why the OLED TV shipments mentioned at the beginning showed an 85% growth rate this year. Even if the olED cost is generally more than 1.5 times that of the LCD, it cannot withstand the layout of various players.
But then again, which breakthrough technology was born when the cost was not high?
Second, the industrial chain is open, and there is a lot of potential
Since OLED was the victor of the first war, we have to conduct a study of the industrial chain.
The upstream of OLED includes raw materials, production equipment and assembly components;
The midstream is OLED panel manufacturing;
Downstream are a variety of smart electronic products.
Photo: OLED industry chain
Let's look at the midstream first, let's look at the competitive landscape. OLED module production, at this stage Samsung and LG occupy the market of small size and medium and large size panels, each occupying their own subdivision track, but last week, the author saw Samsung achieve QD-OLED mass production, breaking LG's exclusive supply pattern of medium and large size OLED panels.
Moreover, with our determination to break through the card neck technology in recent years, BOE (000725), Shentianma (000050), and TCL Huaxing are also actively expanding production capacity, striving to gain the favor of downstream manufacturers and break South Korea's monopoly on OLED panels. According to the latest news, the number of OLED screens that BOE will supply to Apple's iPhone next year is expected to be three times that of this year (about 10 million). China will also sit on the first position of OLED panel production capacity in 2024. Manufacturing power, worthy of the name.
Photo: Global OLED smartphone panel shipments (Samsung's small size is hard to shake)
Looking at the downstream, we look at the relationship between supply and demand. Downstream demand includes smartphones, smart watches, VR/AR devices, etc., and the demand growth rate will be as high as 38% in the next three years. Demand for smartphones accounts for about 70%. In the future, with the large-scale rollout of 5G base stations, 5G + flexible screens may become a must for high-end mobile phones. By 2025, the global OLED market size can exceed $40 billion, and the erosion of LCD market share is playing out year by year. Two years later, OLED will become the mainstream configuration in the mobile phone panel display industry (penetration rate of more than 50%).
Photo: OLED penetration in the global display market
Demand is good, but the overall market of OLED panels this year is in short supply, especially in the first half of the year. The reason behind this phenomenon is still because of the insufficient supply of upstream driver chips (ICs), the reasons we have analyzed in detail in the previous chip series, please make up for the forgotten lessons. But don't worry too much about the supply side. Entering the fourth quarter of this year, the supply of OLED has eased with the upstream chip supply, and a wave of market on the stock market can be reflected.
Image: OLED Sector Index
And in 2022, it is reported that LG's OLED shipments will exceed 10 million pieces, compared with more than 20% of this year's production capacity expansion.
The massive expansion of the absolute faucet is not a good thing for waist and bottom players.
Finally, looking at the upstream, we look at the domestic substitution of the single body. If there are many players in the middle of the stream, such as New Oriental and Shentianma, they are trying to break through the production capacity blockade in South Korea, while the upstream, especially the material side, the technology and production capacity of domestic players are still slightly insufficient, and the core patents are mainly in the hands of overseas manufacturers. Especially the OLED monomer in the following figure, the only one that can play in China should be 688378. Purification from coarse monomer to monomer sublimation (solid state gaseous state), because the purity requirements are high (6 9s after the decimal point), is the production link with the highest technical barriers, but from the gross profit margin index (70% of the monomer), it can be seen how much foreign manufacturers have the right to speak.
Image: Upstream OLED monomer production process and gross margin
We still have a long way to go in this link of monomers. The road is long and long.
The Second War is not far away
OlED's long-overdue life problem (OLED's organic diodes are more likely to age) makes OLED never sit back and relax. Especially for large-size TVs and laptop devices with longer replacement cycles.
With the advent of Apple's Mini-LED backlit Macbook, many industry experts have called out to the insider. More experts shouted that Mini-LED will be the biggest opponent of large-size applications in OLED.
Mini-LED is simply an upgraded version of a normal LCD. The principle is to cut a whole backlight layer in the LCD, divide hundreds of backlight areas, and better adjust and control. Compared with LCD, the contrast has been greatly improved, and the color performance is better. In addition, the problem of short OLED life is solved.
Image: The iPad Pro 12.9 uses mini-LED
The official commercial application of Mini-LED also opened this year. Annual shipments of MINI-LED-equipped TVs are about one-third of OLED TVs, or about 2 million units. According to gartner, research institute Gartner concluded that in the future, Mini-LED is expected to become the preferred backlighting technology. By 2024, at least 20% of medium and large size display devices will use Mini-LED backlighting.
But the popularity of a new technology has never been achieved overnight, but has been a spiraling process. Mini-LED is still in the stage of major players releasing the first generation of Mini-LED new products. Moreover, Mini-LED is not a perfect solution, and the problem of thickness and weight continues the problem of ordinary LCD.
For example, after the 2.9-inch iPad Pro introduced the Mini-LED backlight module, it increased the thickness by 0.5mm and the weight by 40 grams. This runs counter to Jobs's idea of lightweighting when he took his laptop out of his envelope at a press conference.
OLED faced the second war of The Mini-LED, and who killed the deer can still be concluded.
However, looking at the development process of science and technology in industrialization, it must be very certain that whoever has a more mature industrial chain and a more complete accumulation of technology will be able to play a good game of chess in the future and play a good active battle.
Note: This article does not constitute any investment advice. The stock market is risky, and you need to be cautious when entering the market. There is no harm in buying and selling.