this is from a DOW web page:
Dow is a technology leader in active matrix OLED (organic light emitting diode) emissive materials, and has been involved in their development for the last decade. Dow has two OLED facilities in Cheonan, Korea and global research and development activity at the Dow Seoul Technology Center.
Carrier transporting layers
That tells me that they have been selling Fluorescent emitters that are being swapped out for Phosphorescent (ie UDC) ones
don't know the number, but I DO know that the S5 was a dud...and of course that played into less than maximum capacity utilization which led to disappointing emitter sales by UDC (and of course the change of host supplier didn't help either). I think we can confidently predict that emitter sales to Samsung will be SIGNIFICANTLY higher in 2015 than they were in 2014
pretty sure DOW is in the fluorescent OLED biz...so when Samsung moved from Green fluorescent to Green phosphorescent that could be a big swing in sales from DOW to UDC. If LG is doing (or has done the same) then that is another big swing. Not sure if they (DOW) are in the host biz, but they probably are....
according to Bloomberg: "Samsung Display Co. is expanding sales of its organic light-emitting diode, or OLED, panels from Galaxy devices to Chinese device makers, including Lenovo Group Ltd."
This is the first time I have heard Lenovo mentioned as a OLED screen purchaser...obviously a large player.
I think this is GREAT news! After all, OLEDWorks is a single focus company, and if they are successful then UDC will be successful with them. If a conglomerate had purchased the Phillips biz, then capital might have been available, but OLED could have eventually become an afterthought. WIth OLEDWorks, it is priorities #1, 2 and 3! It also sounds like Phillips will have a "carry" on future sales, which probably means that OLEDWorks paid less upfront. Again that is great news, since it means that OLEDWorks preserves capital for expansion, and can sell under the Phillips brand name..again if a competitor to Phillips had been the buyer, perhaps the Phillips brand would have been taken off the table....and brand names matter!
I guess professional investors would rather sell at $35 and pay short term gain taxes than tack on another 37% and have deferred any tax liability...or he is merely a self described POS.
we need to remember that their guidance wasn't really 190-230 but rather "$200 million with 5% downside and 15% upside" SO while that translates into the numbers you cite, there must be a reason why they changed the nomenclature...and how they will adjust it. Basically, now they have 3 numbers that can change...the baseline of $200, and the downside and upside percentages (and/or both). Given that last year they adjusted guidance after Q1 and then ended up "missing" those upped numbers, I think they will be VERY reluctant to change numbers unless they think its in the bag. My sense (from parsing their words for years) is that we get the downside risk eliminated this CC. So they are not really upping guidance, but rather reinforcing their confidence that we won't be worse....having said all that...if they DO in fact up guidance (whether it be the baseline or the upside % or both) I think we should all pop champagne, because they will NOT do that unless they have some really strong visability!
Samsung's flexible AMOLED delivers Quad HD picture clarity at 1440 by 2560 pixels with a pixel density of 577ppi. It can deposit more than 3.6 million RGB organic subpixels on its PI substrate, allowing the user to see fine image detail.
The flexible AMOLED display can drive each of its pixels individually. This helps it to reduce power consumption. Its pixel control allows for the use of "partial operation technology" permitting a smartphone to make use of only 7mm of each column of the curved display at any one time -- therein reducing power consumption today by about 20% and possibly more in the future. Comparatively, note that in an LCD mobile display, a simple widget or pop-up message uses the entire backlight unit to illuminate the screen.
In light of growing demand for Samsung Display's flexible AMOLED technology, the company has recently released reports regarding some of its latest flexible display technology used in new Galaxy S6 Edge models and has also announced it will continue to evolve from curved, to bended, foldable and even rollable designs.
Flexible AMOLED substrate material
Samsung Display's Flexible AMOLED uses polyimide (PI), an advanced type of plastic, as the substrate material rather than hard glass used in rigid AMOLED panels. PI is a high polymer material with characteristics of exceptional flexibility, resilience and shock resistance. Samsung has been able to make an extremely thin film out of it - less than a millimeter thick (thinner than a human hair). With the thickness of the AMOLED substrate being less than half the thickness of glass substrates in conventional mobile LCD displays, Samsung has been able to deposit an electronic circuit onto it and evaporate a luminant RGB organic device, making it potentially more bendable than a human hair.
I think the beauty of a royalty agreement is that it is a win win for both sides. Let's assume that LG had the option of a license agreement that would pay UDC $80 million in 2020 (with no royalty). If LG is able to ramp to $10 billion by then, then they have a good deal, but if by chance AUO or some other firm takes the leadership position, they don't want to be on the hook for the $80 million. They know, however that if OLED biz explodes, they may have to pay $160 million..
But they look at that as a "high class problem" (like owing taxes on your winning $50 million lottery ticket) As for UDC, sure certainty is good, and they needed certainty for the 2011 Sammy deal, but with a pristine B/S that is only going to get better, they would rather trade certainty for upside!
believe what you will...we will get our answer in a few weeks...
I think people need to understand that there is a fundamental difference between a "license agreement" ala Samsung and a "royalty agreement" ala LG. While the license agreement provides certainty with regard to cash flows, it provides little upside. So in the event that in 2020 LG is selling $10 billion worth of OLED panels UDC will be getting between $100 and $200 million in royalty payments, in addition to the monies from the sales of emitters etc. Clearly if LG falls on its face, UDC would have been better off with a higher license fee, but from all of mgt's comments in the past they wanted a ROYALTY agreement.
Perhaps we will get more clarity on the next earnings call, but the inference I have heard from the 3 or 4 analysts that I have spoken with, is that the license fee will be "modest" and since it is amortized over the life of the agreement, the quarterly (and annual) impact will not be substantial. Lets just assume that the license fee is $16 million (I think that is high but it makes the math easy), that means that $2 million will be recognized each year, or $500k/quarter...neither of which will drive rev growth much.
I say "yes" but do not expect a blow you away kind of number. It will be more interesting to see what the company says about '15 royalty payments form LG.
As people try and predict Q1 15 revenue for UDC/OLED they have to weigh the pluses and minuses vs Q1 of 2014. In simple terms revenue was $37.8 million in Q1'14 while estimates for Q1'15 are $32.1. In Q1 of last year not only was Samsung ramping up their use of green emitters, but they also bought a fair amount of green host. In Q1 of this year, the host sales will be dramatically less, but given that the Galaxy S6 production was occuring AND the company had a few quarters to sell screens to other OEMs, then I think we can confidently predict that Samsung emitter sales will be the same if not better than last year.
LG was purchasing product in Q1 '14 but not to the extent that they will be in Q1 of this year...so the volume of product LG will have purchased (for both TV and Watch sized panels) will definitely have increased, but the price paid/gram will have dropped. As noted by many (including the company) in the past LG was paying an effective royalty on every gram purchased; regardless of whether the panel was sold or junked. Under the new agreement, the price/emitter paid by LG will surely be lower, and there will be little if any royalty "booked" in Q1. WHile there might be a modest amount of license fee recognized, most analysts have concluded that the license fee is a ONE-TIME event (as opposed to the semiannual structure of the Samsung agreement) and the recognition of the license will be spread over the 7 years of the deal...so don''t count on more than a few $100k of LG license fee in Q1.
While estimates are already banking on a drop of $5.7 million YOY we know that host materials made up $12.7 million of Q1'14 results. Host dropped to $6.3 million in Q4'14 and will probably drop down to about $5 million in Q1. That leaves an additional $2 million "hole" to be filled in order to match consensus.
So the question is: will Samsung emitter order strength and LG emitter volume strength be enough to offset the LG price discount and no royalty?
This is a quote from the recent NFLX release: "As we’ve said, our plan is to run around break-even globally through 2016, and to then deliver material global profits in 2017 and beyond."
Hastings has taken a page from the Bezos Book....gather revenue (and no profits) but promise profits for the future. In the case of AMZN, the future keeps getting pushed out...will be interesting to see about NFLX.
But back to comparing NFLX to OLED, given the market penetration NFLX already has in the US (40%ish?) even tho there is a lot of headroom in the Intl area, at some point growth stops (and slows way before then). So how much larger could NFLX rev get? 10-15 times? When the majority of TVs are OLED and virtually every new construction building has OLED lighting installed (and retrofit lighting is even larger) and every car has OLED screens in it (and of course every mobile device has OLED) ...what is the multiple of out-year revenue for OLED?...100 times ...more?...and UDC/OLED has hefty operating margins already; and they are only going to get larger..sooner...
why do people buy cars with fancy wheels and other glitz when the car doesn't perform any differently? Because they want to be seen with the newest and coolest version...same with the S6 Edge...does the S6 Edge perform any miracles vs the regular S6? No...but when you pull that phone out of your pocket (17 times a day) people around you will notice...and its a mere $100 more than the reg version...a lot cheaper than fancy rims and low profile tires for your car!
I have an S4 that needs to be replaced...my anniversary with ATT isn't unitl the first week of May...hopefully I will be able to get an Edge by then, cuz for an extra $100...why not?!