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Samsung, LG 'lose confidence' in OLED TV tech

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Don’t expect reasonably priced OLED TVs to hit the market for a fair few years yet. Do, however, expect 4K x 2K Ultra HD LCD TVs to be all the rage in 2013.

So suggests David Hsieh, an analyst at NPD DisplaySearch, a market watcher. He claims to have detected a change in the mood of those two major display manufacturers, Samsung and LG, the world’s number one and number two telly makers, respectively. Both were, until very recently, dead keen on OLED TV technology.

A year ago, for example, both were aggressively promoting prototype 55in OLED TV sets, first at January’s Consumer Electronics Show (CES) in Las Vegas and, later in the first half of 2012, at dedicated events in Europe and Asia.

However, come September’s IFA show in Berlin and then November’s US Thanksgiving holiday sales period, and, according to Hsieh, “Korean panel makers lost some confidence in OLED”. These manufacturers “began to feel that they could not justify a further investment in [production] capacity expansion”, he says.

Two factors have caused this shift from the early part of the year’s enthusiasm to this end-of-year gloom. First, TV sales over the last few months have demonstrated punters’ clear preference for larger but cheaper televisions. Both Samsung and LG were pitching 55in sets, big by most markets’ standards, but priced in the region of $10,000. A fraction of that will buy you a colossal Full HD LCD.

Then there are the lessons Samsung and LG have learned while trying to make big OLED screens: yields are poor. Very poor, in fact. According to Hsieh, fewer than 10 per cent of the OLED panels either company punches out are up to snuff to be used in TVs.

Some glitches that cause picture and colour distortions can be fixed physically and with extra electronics, but even these bandages and Band-Aids only take the total yield to less than 30 per cent of the panels rolling off the production lines.

It doesn't help that both Samsung and LG are suing each other for allegedly stealing their OLED-related intellectual property.

Worse, the process of bonding the layers within OLED panel using glass "solder" - a process called "frit encapsulation" in the trade - introduces fragilities that reduce each finished panel’s effective lifespan. To what degree, the manufacturers can only guess, making it hard to predict the ongoing cost of servicing the few $10,000 OLED TVs they do manage to sell.

Making LCD panels with four times as many pixels per unit area as a 1920 x 1080 set is tricky too, of course, but it’s much more straightforward than making a Full HD OLED TV. Yields are higher and, because they are using the same basic manufacturing process as that employed for existing LCD TVs, it’s easier for vendors to work on increasing that yield.

That, plus punters’ ability to see the clear benefit of an Ultra HD TV over a Full HD TV, says Hsieh, has forced Samsung, LG and others essentially to delay the mass production of OLED TVs until they can punch out big numbers of (working) 4K x 2K versions.

By his estimation, that won’t happen until 2014 at the earliest. In the meantime, OLED TVs will be used largely for demonstration purposes while consumers will be sold 4K x 2K LCD TVs. Those, that is, who don't choose to wait even longer for a decent-size OLED TV than they have already. ®

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