Growth of OLED TV Market ‘Signal’

Starting in 2H, Samsung Display’s OLED TV is expected to begin mass production. LG Display recently increased production volume of OLED TV panels at its Guangzhou plant in China, and Samsung Display is expected to convert its existing LCD TV plants to QD-OLED TV lines for several years from this year.

In fact, Samsung Display has suspended part of its existing LCD TV panel plant in the third quarter and plans to begin mass production of QD-OLED TV panels from the end of this year, taking advantage of the space. Samsung Display’s facility investment is also expected to increase significantly from 2019, and sales volume of QD-OLED TVs is expected to increase from 2021 when the new factory A5 is completed.

Both LCD and OLED panels consist of RGB pixels that produce color, a switch (TFT) to drive the pixels, and a semiconductor (DDI) to drive the switches.

The DDI is connected to all the TFTs of the panel through the bonding pads. The larger the size of the display, the more DDI is used. As such, they benefit directly from the growing volume of TV sales.

5 to 7 switches (TFT) per pixel. Due to the use of OLED correction circuit
Another feature is that DDI is used more in OLED TV than LCD. OLED TVs have more switches per RGB pixel than LCDs. In fact, in the past by Samsung Display at the Society for Information Display (SID), a total of five switches (TFTs) are used for OLED TVs. As the number of switches per panel (TFT) increases, the use of DDI to drive them must also increase. Calculating this, the number of switches in a 65-inch OLED TV panel is eight times that of an LCD TV, and the use of DDI to drive it is nearly three times higher.

Domestic DDI Industry Supply Chain Analysis: Opportunities for SK Hynix 8-inch Foundry Business
As DDI for OLED TV uses 8-inch CMOS process, DRAM makers such as SK Hynix and Samsung Electronics can have strength in 8-inch process competitiveness. Samsung Electronics is expected to proceed with its own design and production, but it is necessary to expect SK Hynix’s 8-inch foundry strategy related to LG Display.

The growth of the OLED TV market is also positive for the DRAM market. OLED TV is a field in which TV makers such as Samsung Electronics and LG Electronics lead the premium product market. This means that OLED panels can be located in the center of the 8K TV market, which has been opened in earnest from this year. 8K OLED TVs are expected to enter the market in earnest from the end of this year, and the content resolution is expected to improve from 4K to 8K with time lag.

In addition, in order to support 8K real-time streaming and upscale functions of OTT companies such as Netflix, more DRAM will need to be installed in the TV. 4K TVs are equipped with 4 ~ 8GB of DRAM, slightly exceeding the current average amount of TV DRAM (3.5GB as of 4Q2019) .When the expansion of 8K TV sales and 8K content spread in earnest, Payload is expected to increase to 14GB. Considering this, the total demand for TV DRAM is expected to exceed the PC DRAM demand, which used to account for most of the past.

This article is based on the author’s subjective opinion by using reliable data and information from Kiwoom Securities Research Center. Decisions on securities trading should be made entirely at the investor’s own discretion and responsibility, and Kiwoom Securities Research Center will not take any responsibility for the results of any investments in accordance with the contents of this article.

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Summary

Starting in 2H, Samsung Display's OLED TV is expected to begin mass production. LG Display recently increased production volume of OLED TV panels at its Guangzhou plant in China, and Samsung Display is expected to convert its existing LCD TV plants to QD-OLED TV lines for several years from this year.

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