Organic light-emitting diode (OLED) displays will replace liquid crystal display (LCD) screens as the leading smartphone display technology in 2020, research firm IHS Markit (INFO) predicted in a report issued Monday.
Samsung Electronics has already adopted OLED displays in its flagship smartphones, such as the Galaxy S7, and there is increasing demand for OLED displays from Chinese vendors Huawei, OPPO Electronics, Vivo, Meizu Technology and others.
Apple (AAPL) is expected to switch to OLED displays for next year's iPhone 8.
"Apple's upcoming adoption of OLED displays will be a milestone for OLED in the display industry," David Hsieh, senior director of IHS Markit, said in a statement.
Universal Display (OLED), a supplier of materials and technology for OLED products, is expected to benefit from the rising demand. Its stock has risen more than 40% in the past 12 months. But on Tuesday, Universal Display stock closed 1.4% at 67.33 on the stock market today.
IBD'S TAKE: Universal Display stock is benefiting from excitement around the adoption of OLED display technology. The stock is on the IBD 50 list of leading growth stocks. The IBD 50 is IBD's flagship screen of growth companies showing strong relative price strength and top fundamentals.
LCD screens have dominated mobile-phone displays for more than 15 years, but OLED displays are flexible, thinner and more power efficient.
AMOLED displays with a low-temperature polysilicon (LTPS) backplane will account for more than one-third (36%) of all smartphone displays shipped in 2020, becoming the most-used display technology in smartphone displays, IHS said. It will surpass a-Si (amorphous silicon) thin-film transistor (TFT) LCD and LTPS TFT LCD displays.
"While OLED is currently more difficult to manufacture, uses more complicated materials and chemical processes, and requires a keen focus on yield-rate management, it is an increasingly attractive technology for smartphone brands," Hsieh said. "OLED displays are not only thinner and lighter than LCD displays, but they also boast better color performance and enable flexible display form factors that can lead to more innovative design."
Samsung Display leads in OLED display production today, but rivals are ramping up their manufacturing capabilities. They include LG Display (LPL), Sharp, JDI, BOE, Tianma, GVO, Truly and CSOT, IHS said.
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