Apple spurs industry shift to low-power display technology
KOTARO HOSOKAWA and MISCHA SENF, Nikkei staff writers
TOKYO -- The electronics industry's shift from LCDs to next-generation panels is gaining momentum.
The Japanese unit of South Korea's LG Electronics on Wednesday took the wraps off five new TVs with organic light-emitting diode displays, including a 65-inch model. The picture is formed by a thin, bendable layer of organic compounds that shine without the need for a backlight.
Lee In-gyu, president of the LG unit, said the OLED era "has already started." But with Apple planning to adopt OLED panels for a new smartphone as early as 2017, this is just the beginning.
One selling point of the new panels is their ability to produce clear, vibrant colors and deep blacks. In this respect they beat liquid crystal displays, which create images by sending light through a color filter. Companies are increasingly commercializing OLED-related products, from materials and panels to manufacturing equipment.
When it comes to OLED panels for smartphones, South Korea's Samsung Electronics holds a virtual monopoly. It produces the panels in bulk for its own handsets.
In the TV market, LG Electronics has been using the technology in its high-end models, which are attracting converts. LG aims to boost global sales of OLED sets to 1 million units this year, Lee said.
Going OLED would allow Apple to build a thinner, lighter smartphone that would consume less electricity, thanks to the absence of a backlight. There is talk that the iPhone maker will use the technology to create a bendable handset.
OLED technology has been held back by high costs, which stem from the difficulty of making them at a good yield rate. But the industry has the know-how to take the next step: With Samsung having started mass production six years ago, companies have been accumulating expertise in producing OLED materials and manufacturing equipment. Now that Apple is set to embrace the new displays, industry players are building up capacity.
South Korea's LG Display plans to invest about $9 billion in the technology over the next few years.
Behind the curve
Right now, Japanese panel makers are at a disadvantage. Their strategy has been to focus on high-quality LCDs while expanding their shares of the market for small and midsize panels.
The Apple factor, however, prompted them to step up their OLED programs at the end of last year.
Japan Display has increased its research and development efforts and will soon set up a trial production line at its plant in Ishikawa Prefecture. It hopes to start mass production in 2018.
Sharp hopes to catch up by taking advantage of the Taiwanese company's financial muscle. The plan is to invest 200 billion yen ($1.82 billion) to start an OLED production line in 2018.
Lagging behind Samsung and LG, Japanese manufacturers' only shot is to establish large-scale production at a stroke.