The OLED Market Will Keep Penetrating And That's Good For Apple

Credit Suisse’s Keon Han mentioned that Samsung currently dominates OLED usage, with a market share of 95 percent. He added that an increasing number of Chinese brands are adopting the technology and Apple Inc. AAPL is expected to do so too, resulting in suppliers enhancing their capacities.

The reasons Apple is likely to adopt the OLED technology include a positive experience through its Watch, easy availability of the technology and the OLED’s superior performance in comparison to LTPS TFT-LCDs, despite similar costs and addressing the form-factor design limitations, breakage and battery life issues, analyst Keon Han mentioned.

Samsung is expected to continue dominating the OLED segment over the next three years, with a market share of 90 percent, besides focusing on advancing flexible OLEDs while increasing external sales.

“LGD will drive WOLED for TVs, but will also become a key supplier of small OLED. JDI has the potential, but no experience, so becoming a supplier for AAPL by 2018 is critical,” Han wrote.

The analyst pointed out that initial OLED investment is high and players like LGD, JDI and AUO will witness “deep losses on the initial OLED investment requirement before recovering on OLED growth.”

TFE equipment methods will play a key role in improving the productivity and lowering the costs for OLED suppliers. “LCD panel and component suppliers with slow transition and adaption to the OLED era risk becoming marginalized,” Han added.

Only those producers who supply flexible OLED panels and the supply chain that enables advancement are likely to grow, the Credit Suisse report noted, while adding, “OLED is still a developing industry with rapid technological changes still to come, and stock calls based on the pure OLED growth theme remain.”