Mid Or End Game For Universal Display?
Esekla • 26 Comments
Esekla • 26 Comments
Universal Display Is A Bet On The OLED Market
Alpha Gen Capital
Alpha Gen Capital
Dec. 30, 2015, 10:02 AM
- Korea's Electronic Times reports Samsung (OTC:SSNLF) and LG Display (LPL -0.6%) are close to final deals with Apple (NASDAQ:AAPL) to supply OLED displays for iPhones.
- It adds the companies plan to spend a combined KRW15T ($12.8B) in capex over the next 2-3 years to expand their OLED capacity, and that (in-line with past deals with suppliers) Apple will likely provide some funding to help the companies with their investments. Samsung will likely get bigger order volumes than LG.
- The report follows one from Japan's Nikkei a month ago stating Apple will launch iPhones featuring OLEDs in 2018, and that the company will work with suppliers "over the next year or so" to see if it can obtain enough displays and eliminate technical issues such as performance degradation.
- OLED IP/materials supplier Universal Display (OLED +5.1%) is rallying once more, after having previously done so on the Nikkei report. Shares are within $3 of a 52-week high of $57.93, and up 99% YTD.
Dec. 15, 2015, 10:49 AM
- TheStreetSweeper, no stranger to providing downbeat commentary on Universal Display (NASDAQ:OLED), argues today the company's "fundamental" OLED patent is due to expire in 2017, with other patents set to expire in the following years. Universal has filed for dozens of patents since the '90s at the USPTO and other patent agencies.
- TheStreetSweeper also notes Universal's 2011 OLED material supply deal with Samsung expires in 2017 - Samsung has been buying from both Universal and subsidiary Cheil Industries - that Samsung has considerable OLED IP of its own, and that the SEC launched a 2014 inquiry into Universal's revenue recognition practices.
- The firm, meanwhile, is skeptical of recent reports Apple is planning to use OLEDs in future iPhones, and highlights a JPMorgan report suggesting Apple is more likely to use OLEDs in niche products. Bloomberg just reported (in a story about a Taiwanese Apple display R&D facility) Apple (NASDAQ:AAPL) is "keen to move to [OLEDs]," while continuing to develop more advanced LCDs.
- Universal has sold off on a morning the Nasdaq is up 1.1%.
Dec. 2, 2015, 2:10 PM
- Universal Display (NASDAQ:OLED) has surged to new 52-week highs after CFO Sidney Rosenblatt presented this morning in London (webcast) at the Nasdaq 33rd Investor Program.
- Shares are up over 15% since the Nikkei reported last week Apple plans to use OLED iPhone displays starting in 2018. Cowen followed up by reporting Apple is seeking 2018 OLED capacity commitments.
Nov. 27, 2015, 10:26 AM
- A piece in the Nikkei Asian Review says Apple "plans to introduce organic light-emitting diode displays for iPhones starting in 2018," though no sources are cited.
- Cowen's Robert Stone - who has Outperform ratings on both Universal Display (OLED +6.1%) and LG Display (LPL +1.1%) - expects Apple to eventually adopt an AMOLED display, subject to establishing sufficient capacity. "Capacity commitments are apparently being sought for 2018, by which time we expect the technology of choice is likely to be on flexible substrate."
- In the meantime, he says, look for AMOLED's (both rigid and flexible) to continue taking market share from LCD displays with other smartphone OEMs in China and elsewhere.
- Source: Barron's
Nov. 25, 2015, 3:09 PM
- Japan's Nikkei reports Apple (AAPL -0.5%) will launch iPhones sporting OLED displays starting in 2018. To date, the company has exclusively used LCDs for its retina displays.
- The paper adds securing enough OLEDs to meet Apple's needs (the company sells over 200M iPhones/year) could be difficult, and that Apple will "work over the next year or so" with suppliers to see if it can obtain enough displays and eliminate technical drawbacks such as performance degradation.
- iPhone LCD supplier LG Display (LPL +6.9%), which has already unveiled plans to invest ~$8.5B in OLED manufacturing through 2018, is said to be "planning capacity upgrades." OLED materials/IP provider Universal Display (OLED +5.2%) have caught a bid on the Nikkei's report; LPL was already higher on the day.
- OLEDs have long been a staple on Samsung's Galaxy S and Note lines. Supporters of the technology praise its high contrast/deep blacks and potential thickness and power consumption advantages. Apple, however, has argued its LCDs provide superior color accuracy.
- There have long been rumors Apple is thinking of adopting OLEDs. The company recently filed a patent application for an integrated OLED display and touch panel, with a fingerprint reader located underneath.
- Earlier: Apple buys Star Wars motion capture tech developer Faceshift
- Five months ago: Apple reportedly working on iPhone design that eliminates home button
Nov. 19, 2015, 12:36 PM
- Universal Display (OLED +9.6%) is up 17% over the last two days. Possibly helping: The USPTO has published a patent application from Apple (has long been the subject of rumors it's testing/thinking of using OLEDs) for an integrated OLED display and touch panel, with a fingerprint reader underneath.
- In the application, Apple (NASDAQ:AAPL) states integrating an OLED stack and touch sensors on a silicon substrate "can allow for an extremely high number of pixels per inch," and that arranging OLED sub-pixels side-by-side with touch sensors "can also lead to a wider viewing angle display with a higher contrast ratio, higher brightness, and more vibrant colors without compromising touch sensitivity."
- Also: Reuters has published an article highlighting LG's recent OLED TV price cuts, made possible by recent production improvements and plant investments. Two sets now sell for less than $2K. LG Display (LPL +3.2%) recently promised to invest at least KRW10T ($8.5B) in OLED manufacturing through 2018.
- Universal jumped two weeks ago after beating Q3 estimates and narrowing its full-year guidance. Shares are at their highest levels since August.
- Update: Also of note: Korea's Digital Times reports LG Display plans to invest (perhaps using the funds previously allocated for OLED expansion) up to $4.2B to build a new OLED plant in Paju, South Koirea. The plant is expected to go into production in the 2017-2018 timeframe.
Nov. 5, 2015, 5:26 PM
- Following its Q3 beat, Universal Display (NASDAQ:OLED) forecasts 2015 revenue of $200M with potential upside or downside of 3%. The company previously guided for 5% downside and 15% upside.
- OLED material sales rose 24% Y/Y in Q3 to $34.1M, with an $11.3M increase in emitter sales offsetting a $4.6M drop on host material sales. With Samsung making licensing payments in Q2 and Q4, royalty/license revenue totaled $5.2M, down $200K Y/Y.
- Material gross margin (closely watched) rose to 79% from 75% in Q2 and 73% a year ago (boosted EPS). Costs/expenses rose 16% Y/Y to $31.1M.
- Shares have risen to $38.20 after hours.
- Q3 results, PR
Nov. 5, 2015, 4:09 PM
- Universal Display (NASDAQ:OLED): Q3 EPS of $0.13 beats by $0.05.
- Revenue of $39.42M (+19.9% Y/Y) beats by $1.27M.
Nov. 4, 2015, 5:35 PM
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Oct. 16, 2015, 10:48 AM
- Goldman has downgraded Universal Display (NASDAQ:OLED) to Neutral, and cut its target by $10 to $40. Shares have fallen below $36 in response.
- A week ago, Universal jumped as Cowen reiterated an Outperform, while noting LG OLED TV price cuts - LG's cheapest model is available for $1,799 while supplies last - and Korean government plans to offer fresh incentives (tax benefits, tariff cuts, etc.) for local OLED manufacturing as Chinese and Japanese competition grows.
Oct. 9, 2015, 10:43 AM
- Cowen has reiterated an Outperform rating and $60 target for Universal Display (NASDAQ:OLED). Shares have rallied towards $39.
- Earlier this week, Cowen argued Samsung's Q3 pre-announcement boded well for Universal, given Samsung's better-than-expected numbers appeared to stem from OLED and logic IC strength. "When we visited Seoul in September, Samsung noted rising [OLED panel] shipments to other OEMs along with better Y/Y compares for Galaxy models. We note recent [OLED-supporting] models including Google Nexus 6P, and Microsoft Lumia 950/950 XL."
- Short-covering could be helping out: Universal had 3.7M shares (nearly 10% of the float) shorted as of Sep. 15.
Sep. 29, 2015, 12:35 PM
- As expected, Google (GOOG +0.5%) has refreshed its Nexus phone lineup with two models - a smaller device from LG known as the Nexus 5X, and a phablet from Huawei known as the Nexus 6P. (live blog)
- The 6P sports a 5.7" 2K OLED display - a moderate positive for Universal Display (OLED -0.7%), which still depends heavily on Samsung phone sales - and the 5X a 5.2" display. Both devices support 4K and slow-motion video recording, come with fingerprint sensors and reversible USB Type-C ports (said to charge twice as fast as the iPhone 6+), sport 12MP rear cameras with large 1.55-micron pixels (good for low-light photography), and run on stock Android 6.0 (Marshmallow).
- Traditionally, Google hasn't aimed for Nexus devices to become mass-market hits, but rather to serve as proof-of-concepts for its vision of what Android hardware and software should be. The company unveiled its Project Fi mobile phone service (only works with the Nexus 6 phablet for now) in April.
- Google has also announced Android now has over 1.4B active users, and Google Play over 1B active users. The company stated in June 2014 Android's user base had topped 1B.
- Update: Google states the Nexus 6P and 5X will join the Nexus 6 in working with Project Fi when they go on sale in October. Pricing has also been disclosed: The 6P will start at $499, and the 5X at $379.
- Update 2: Some more hardware launches: The Pixel C, a 10.2" Android tablet that starts at $499 and has a $149 detachable keyboard accessory; a new Chromecast HDMI dongle with an improved Wi-Fi radio; and Chromecast Audio, a $35 Wi-Fi streaming device that plugs into existing speakers.
Sep. 4, 2015, 6:48 PM
- Digitimes (citing Japanese media) reports Mitsubishi Chemical and Pioneer have begun sampling "the first blue light-less OLED lighting module made with a wet coating process for the light-emitting layer." The modules are expected to enter mass-production in early 2016, and help cut production costs by over 60%.
- OLEDs enable thinner lighting products than LEDs and other alternatives, and also provide energy efficiency and temperature benefits. However, high prices have limited adoption. Universal Display (NASDAQ:OLED) formed a partnership with Mitsubishi Chemical back in 2006, and struck a licensing deal with Pioneer in 2011.
- Separately, Panasonic exec Masahiro Shinada predicts OLED TVs will be cheap enough for average consumers in 2-3 years. "I'm very confident panel cost will go down ... Last year, the panel suppliers' yield was very, very low level. But currently this ratio is now growing." OLED TV prices currently start in the ~$2,000 range.
Aug. 17, 2015, 6:19 PM
- LG Display (NYSE:LPL) plans to invest at least KRW10T ($8.47B) in OLED manufacturing through 2018, aiming for a bigger chunk of a growing market in which Samsung is still easily the biggest player. The investments will go towards both large-screen OLED panels for TV sets and signs, and smaller panels for phones/tablets, wearables, and cars.
- Could some of the capacity go towards panels used by Apple? LG currently supplies OLEDs for the Apple Watch, and there's speculation Apple will use OLEDs in future iPhones/iPads.
- Universal Display (NASDAQ:OLED) is seven months removed from striking a licensing deal with LPL that lasts until 2022. Universal's shares rose 5% today to $40.67.
Aug. 6, 2015, 5:14 PM
- Universal Display (NASDAQ:OLED) CFO Sidney Rosenblatt: "During [Q2], dynamic shifts in market strategies resulted in numerous new product introductions that utilized our new red and green emitters. At the same time, these shifts also negatively impacted demand for established products that used our existing host material, which led a customer to significantly reduce its forecast for this host material."
- A $33M inventory write-down has been taken, largely related to host material. Universal's host sales also took a hit last year, after Samsung opted not to use them in certain new phones.
- In spite of the Q2 miss, Universal is reiterating 2015 revenue guidance of $200M, with upside potential of 15% and downside potential of 5%. Consensus is at $212.1M.
- An $11.7M Y/Y drop in host material sales led total material revenue to fall 32% Y/Y to $24.3M. Royalty/license revenue rose 20% to $33.7M, with Samsung paying $30M vs. $25M a year ago.
- Excluding the write-down, material gross margin was 75%, improved from 68% in Q1 and 67% a year ago. Operating expenses (non-GAAP) fell 16% Y/Y to $29.6M. Universal ended Q2 with $356M in cash, and no debt.
- Shares have dropped to $42.72 in AH trading.
- Q2 results, PR
Aug. 6, 2015, 4:08 PM
- Universal Display (NASDAQ:OLED): Q2 EPS of $0.41 misses by $0.04.
- Revenue of $58.09M (-9.4% Y/Y) misses by $5.24M.
Universal Display Corp. is engaged in the research, development and commercialization of organic light emitting diode (OLED), technologies and materials to display displays for wearables, smartphones, tablets and televisions, as well as solid-state lighting applications. The company develops and... More
Industry: Computer Peripherals
Country: United States
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