Category Archives: Displays

September 14, 2012 – Now that the initial dust has settled after Apple’s debut of the new iPhone 5, industry watchers are taking a tally of which semiconductor suppliers stand to gain in the newest must-have smartphone.

Below is a quick tally of the key features and which suppliers likely benefit. (As usual teardown firms prepare their knives, TechInsights has cooked up a preliminary calculation of the iPhone 5’s bill-of-materials.)

— Dual-band WiFi. 4G LTE connectivity, which dramatically accelerates speeds vs. previous models This technology (similar to what the Kindle Fire now uses) increases test times at the module test level, which is a sweetspot for TER’s Litepoint business, points out Credit Suisse’s Satya Kumar. TER already indicated that this unit already saw a boost in 2Q12 attributable to both the iPhone 5 and Kindle Fire. Going forward, this likely means other smartphone vendors will adopt this technology, and eventually 802.11ac next year — both of which "are particularly test-intensive" and thus positives for TER, he notes.

Barclay’s CJ Muse, meanwhile, calls out Qualcomm’s 28nm 4G/LTE baseband and Broadcom’s 40nm WiFi combo chip.

— Upgrade to the A6 logic chip. Apple’s projections of nearly 300m iOS units for 2013 is such a sheer volume that "a seemingly benign metric like SoC die size for iPhone 5 [which is 95 mm2, 22% smaller than the A5] is actually meaningful enough to move the worldwide capex for semiconductor industry by 5% for every 10-sqmm variation," Kumar observes. He factors in 32nm capital intensity, Apple’s unit growth and die size, and determines that Apple’s chip partner Samsung could keep its logic capex spending flat in 2013 just to keep up with manufacturing the new A6 chips. (Apple also is using a dual-core ARM-A15 cores to run at 2× speed for the CPU, which Apple believes is better than Intel’s SoC core roadmap.

Barclays’ Muse points out that anything that means more 28/20nm chips means more litho-intensive processing, which "should benefit ASML disproportionally."

— More DRAM memory content, no extra NAND. DRAM content in the iPhone 5 is doubled to 1GB; Kumar actually had expected an increase in NAND content in the iPhone 5, but apparently Apple’s keeping it steady at 16-32-64GB, which underscores "the cautious commentary on wafer starts and capex from NAND companies," he writes. Among chip tool suppliers possibly affected, KLAC has higher exposure to logic/foundry and LRCX is more heavy into NAND than peers, but the extra DRAM content in the iPhone 5 likely makes up for that. Thus, the extra DRAM and no extra NAND means it’s "a wash" for suppliers.

— Upgraded to in-cell display technology. Putting touch sensors inside the panel, vs. adding a separate touch layer on top of the LCD panel, helps reduce the display’s thickness, which means the phone can be thinner or more features can be improved such as a bigger longer-life battery, explains Vinita Jakhanwal, director for small and medium displays at IHS iSuppli. LG, Sharp, and Japan Display are all potential suppliers of the in-cell display — if they can keep up with demand.

— Audio, antenna upgrades mean more sapphire. Sterne Agee’s Andrew Huang points to Cirrus Logic as a big beneficiary of a new "wideband audio" feature that can fill up more frequency spectrum to improve voice sound quality. Magnachip Semiconductor gets extra business tied to Cirrus Logic, points out Barclays’ Muse. Another winner is Corning, whose Gorilla Glass 2 is likely used as the cover glass for the iPhone 5, he says.

Huang also points out the iPhone 5’s increased used of sapphire, both as a camera lens cover and as the substrate (silicon-on-sapphire) for the antenna switch to automatically switch antenna connections, is a trend worth watching: "Within the next 12-18 months, we believe sapphire content per mobile phones could increase," he writes, suggesting eventually it might supplant the cover glass material. The silicon-on-sapphire trend likely benefits Rubicon (SoS wafer sapphire substrate supplier) and Peregrine Semiconductor (SoS switch component supplier). [Corrected 9/20: Soitec makes the actual SoS wafers for Peregrine.] "Our checks indicate that Rubicon supplies ~30-40% of the market for SoS wafers," he writes, and although a number of other ingot makers are currently getting qualified, "it is much more difficult to core, slice and polish SoS wafers, which suggests margins for SoS wafers are comparable, maybe even lower than those of LED wafers." Muse adds that Magnachip gets a foundry-biz boost from Peregrine, too.

Researchers at the Norwegian University of Science and Technology in Trondheim (NTNU)  have patented and are commercializing GaAs nanowires grown on graphene. The technology underpinning their approach has recently been described in a publication in the American research journal Nano Letters.

The new patented hybrid material offers excellent optoelectronic properties, says Professor Helge Weman, a professor at NTNU’s Department of Electronics and Telecommunications, and CTO and co-founder of the company created to commercialize the research, CrayoNano AS. "We have managed to combine low cost, transparency and flexibility in our new electrode," he adds.

The patented method of growing semiconductor nanowires on atomically thin graphene uses MBE (Molecular Beam Epitaxy) to grow the nanowires. "We do not see this as a new product," Weman says. "This is a template for a new production method for semiconductor devices. We expect solar cells and light emitting diodes to be first in line when future applications are planned."

Check out the video to see the process in action.

"Graphene is experiencing tremendous attention worldwide," Weman said, adding that the new invention “fits perfectly” with existing production machinery.  

One possible device with very large market potential is a nanowire solar cell. This type of solar cell has the potential to be efficient, cheap and flexible at the same time. The invention also makes it possible to imagine a future with self-powered nanomachines and advanced 3D integrated circuits built on graphene and semiconductor nanowires, enabling smaller and more efficient electronics.

Weman envisions flexible self-powered consumer electronics integrated into everything from clothes to notepads, and of course traditional cell phones, tablets and exercise accessories.

"Semiconductors grown on graphene could become the basis for new types of device systems, and could transform the semiconductor industry by introducing graphene as a preferred substrate for many applications," he said.

The research underpinning this development has been strongly supported by the Research Council of Norway since 2007. The project is embedded in the NTNU NanoLab, MBE Lab and Nano-Photonics Laboratory. The technology has been patented by NTNU Technology Transfer, of which CrayoNano is a spin-off company. The founders, Professor Helge Weman and Professor Bjørn-Ove Fimland, are both responsible for important research groups and labs at NTNU.

The article "Vertically Aligned GaAs Nanowires on Graphite and Few-Layer Graphene: Generic Model and Epitaxial Growth" was recently published in Nano Letters, which reports on fundamental research in all branches of nanoscience and nanotechnology.

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September 7, 2012 – Intel is lowering its 3Q12 outlook citing sluggish demand amid challenging macroeconomic conditions. The chipmaker says 3Q12 sales will come in about a billion dollars short of expectations, in a range of $12.9-$13.5 billion instead of $13.8-$14.8B, and gross margins will be about a point lower than projected (62% instead of 63%). The firm also said its capital spending for all of 2012 will be on the low end of its $12.1-$12.9B guidance, as it "accelerates the re-use of existing equipment to the 14nm node." Notably, the company also pulled back its full-year forecasts, which it will update in its 3Q earnings report due Oct. 16.

"[We are] seeing customers reducing inventory in the supply chain versus the normal growth in third-quarter inventory, softness in the enterprise PC market segment, and slowing emerging market demand," Intel said in a statement.

Analysts have for weeks been pointing out warning signs about how a variety of macroeconomic concerns are impacting the semiconductor sector. Both Intel and AMD have been predicting a slowdown in 3Q12. "We anticipate the worst 2H for PC sales since inception," warns Citigroup’s Glen Yeung, citing not just the macroeconomic factors but also increasing tablet competition and undetermined Windows 8 timing. "Multiple challenges in the PC space, with slower ultrabooks, weaker OEM commentary and Win8 pricing [are] affecting a more cautious OEM-ODM outlook," adds Vijay Rakesh from Sterne Agee.

Intel’s downgrade though, provides new clarity on just how dismal the environment is becoming. "It

September 7, 2012 – Intel is lowering its 3Q12 outlook citing sluggish demand amid challenging macroeconomic conditions. The chipmaker says 3Q12 sales will come in about a billion dollars short of expectations, in a range of $12.9-$13.5 billion instead of $13.8-$14.8B, and gross margins will be about a point lower than projected (62% instead of 63%). The firm also said its capital spending for all of 2012 will be on the low end of its $12.1-$12.9B guidance, as it "accelerates the re-use of existing equipment to the 14nm node." Notably, the company also pulled back its full-year forecasts, which it will update in its 3Q earnings report due Oct. 16.

"[We are] seeing customers reducing inventory in the supply chain versus the normal growth in third-quarter inventory, softness in the enterprise PC market segment, and slowing emerging market demand," Intel said in a statement.

Analysts have for weeks been pointing out warning signs about how a variety of macroeconomic concerns are impacting the semiconductor sector. Both Intel and AMD have been predicting a slowdown in 3Q12. "We anticipate the worst 2H for PC sales since inception," warns Citigroup’s Glen Yeung, citing not just the macroeconomic factors but also increasing tablet competition and undetermined Windows 8 timing. "Multiple challenges in the PC space, with slower ultrabooks, weaker OEM commentary and Win8 pricing [are] affecting a more cautious OEM-ODM outlook," adds Vijay Rakesh from Sterne Agee.

Intel’s downgrade though, provides new clarity on just how dismal the environment is becoming. "It’s worse than everyone expected […] Their consumer PC business is getting whacked," noted Patrick Wang from Evercore Partners. Adds Barclays’ CJ Muse: "While we believe cuts were clearly in order, the magnitude of the cut came as a surprise (implies ~9M fewer units) and this clearly speaks to the severity of the challenging macro environment, uncertainty in supply chain as to what SKUs will sell, and PC cannibalization by tablets."

Barclays’ Muse also points to the capex cutbacks as another worrisome sign. That Intel is actively seeking to reuse equipment, particularly lithography tools, isn’t a surprise; it’s done so for several nodes now. Nevertheless, "this announcement likely provides a few seeds of doubt as to [the] capex outlook for 2013." And industry watchers are counting on a big bounceback in 2013 semiconductor equipment demand after a flat year in 2012.

What’s still not clear is how much of the sluggishness now acknowledged by Intel is attributable to macroeconomic factors, and how much is attributable to the company’s own product strategy. Outside of its advantages in manufacturing (soon pushing into 14nm) and technology development (see its investment in ASML), Intel isn’t getting much oomph from any non-x86 PC areas (e.g. tablets/handsets). FBR Research’s Craig Berger explains:

In order to grow, Intel needs to ramp ARM solutions into handsets and tablets. Intel’s traction outside of its core x86 processor market seems limited. Intel does not have 4G LTE solutions today (why not??). It does not seem to be pushing highly integrated ARM-based baseband/application processors to effectively compete against Qualcomm and Broadcom (instead saying discrete processors are fine for high-end smartphones…what about the other 1.5 billion handsets?). Intel does not have in-house connectivity solutions that it could eventually bake into its basebands (WiFi and Bluetooth) or RF transceivers necessary to produce a platform solution. If Intel was not going to go all the way with its cellular strategy, then why did it spend multiple billions of dollars to acquire Infineon Wireless?

And then there’s the exploding demand for tablet computers. Berger reminds of the math that roughly 2.5 tablet shipments equals one PC. If Apple and dozens of competitors could ship 85M tablets this year, translates to -9% lower PC unit growth. "In order to grow, Intel needs to ramp ARM solutions into handsets and tablets," Berger concludes. Right now, though, "Intel [is] not taking necessary steps to be [a] real player in ARM-based handsets and tablets," he writes.

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September 5, 2012 – Despite the gloomy economy and softness in consumer LCD products, suppliers of thin-film transistor liquid crystal displays (TFT-LCD) expect moderate growth in both sales and shipments in 2012, according to DisplaySearch. The analyst firm projects sales of TFT-LCD panels to increase 13% to $85.3B, and shipments to rise 8% to 757M units, triggered by strong demand for mobile PCs and LCD TVs.

"The growth in shipments and revenue this year shows that the TFT LCD industry is recovering from price declines and supply chain inventory adjustments, although the recovery looks very modest," stated David Hsieh, VP of the greater China market for NPD DisplaySearch. "Panel makers are quickly adapting to the shifts in demand and developing new technologies, features, and sizes. Chinese LCD makers are rapidly increasing production, and Korean, Japanese, and Taiwanese manufacturers are restructuring and deploying new technologies and processes to improve costs and display performance. It is clear that the TFT-LCD industry has not yet reached maturity but is simply entering a new chapter."


Large-area TFT panel shipments, in millions. (Source: NPD DisplaySearch)

Notebook PC panel shipments are forecast to grow 13% in 2012 thanks to strong promotions for existing models and the recently introduced ultrabook models championed by Intel, according to DisplaySearch. Total tablet PC panel shipments are expected to rise 61% Y/Y. Tablet PC panel makers are targeting shipments of 72.8M units of 9.7-in. panels, including the iPad 2 and new iPad, and private-label tablets. Shipments of 10.1-in. tablet panels are expected to exceed 17M in 2012, while shipments of 10.6-in. panels — most notably Microsoft’s Surface tablet — are ramping strongly in 2H12.

After declining for the first time ever in 2011, LCD TV panel shipments have been expected to swing back to around 6% growth in 2012, due to stronger demand in China: replacements, new models, and the country’s energy subsidy program. LCD TV panel prices rebounded in 2Q12 and prices for some panel sizes are still rising due to tight supplies. New TV panel sizes (28-in., 29-in., 39-in., 50-in., 58-in., 60-in., and 65-in.) also are playing a key role in shipment growth. LCD panel revenue growth will help improve overall large-area LCD panel revenues in 2012, notes DisplaySearch.


Large-area TFT panel revenues, in US $B. (Source: NPD DisplaySearch)

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Three leaders in their respective fields have formed a technology alliance to bring a new glass cutting technology to market. InnoLas Systems GmbH licensed process technology developed by FiLaser LLC and will use ultra-short pulse lasers produced exclusively for InnoLas by LUMERA LASER GmbH. This complete turnkey system designed for glass, sapphire and brittle materials cutting will be available exclusively through InnoLas’ worldwide sales network.

Conventional laser cutting is based on rapid heating leading to vaporization and material removal. This process is not only slow, but it also leads to unwanted micro-cracks and a rough surface finish. Material cut with conventional laser processes require post-processing in order to remove the unwanted damage. These subsequent grinding and polishing steps are costly and time consuming. Filament cutting, on the other hand, uses ultra-short laser pulses in the picosecond range that cut brittle materials via plasma dissociation. This new process ensures lower surface roughness, high bend strength, and faster processing speed. This new laser cutting technology works especially well on chemically strengthened glass and sapphire, which have been difficult to cut with conventional methods. Filament cutting thus enables a higher quality, throughput and yield in the production of touchscreen displays for smart phones and tablet PCs. Further areas of application include Si, SiC, and GaAs at very high speeds.

Richard Grundmüller, CEO InnoLas: “This innovative laser cutting technology gives us access to new markets, where we can leverage our core competencies in laser machining and glass handling in order to offer our customers a clear competitive edge.”

Jeffrey Albelo, CEO FiLaser: “We have created a novel laser process technology that is at the nexus of physics and materials science. It is purely disruptive and will provide our customers with a compelling motivation to acquire this capability. We believe the combination of these leaders in their respective fields will produce world-class results and will aid in putting this capability into the hands of our customers with speed and 24/7/365 reliability. Looking ahead, we have great expectations as the application potential spans far beyond glass, sapphire, and wafer singulation."

Dr. Achim Nebel, CEO LUMERA LASER GmbH: “LUMERA LASER is delighted to be part of this new partnership. LUMERA has been the leader in ps-laser systems for quite some years and our lasers’ capabilities are a perfect fit for this new application. Up to now the field of glass cutting had mostly been the domain of high average power CW lasers. The FiLaser technology utilizes unique aspects of our ultra-fast lasers providing a fast and high quality solution.”

August 23, 2012 — Massachusetts Institute of Technology (MIT) researchers are building various electronic components out of a 2D form of molybdenum disulfide (MoS2).

Compared to limited results with 2D graphite — graphene — the MoS2 research is a starting point for walls that glow, clothing with embedded electronics, glasses with built-in display screens, and other applications.

This is the start of a “new realm” of research into 2D materials for electronic materials and devices, according to Tomás Palacios, the Emmanuel E. Landsman Associate Professor of EECS.

Large sheets of MoS2 were fabricated by Yi-Hsien Lee, a postdoc in associate professor Jing Kong’s group in EECS, via a chemical vapor deposition (CVD) process. Lee came up with this method while working with Lain-Jong Li at Academia Sinica in Taiwan and improved it after coming to MIT.

Palacios, Han Wang and Yu then produced building blocks of electronic circuits on the sheets, as well as on MoS2 flakes produced by a mechanical method. Wang and Palacios were able to fabricate a variety of basic electronic devices on the material: an inverter, which switches an input voltage to its opposite; a NAND gate, a basic logic element that can be combined to carry out almost any kind of logic operation; a memory device, one of the key components of all computational devices; and a more complex circuit called a ring oscillator, made up of 12 interconnected transistors, which can produce a precisely tuned wave output.

Wang found the material easier to use than graphene, since graphene lacks a bandgap. Graphene must be precisely modified to create a bandgap for transistors. This is not a problem with MoS2.

MoS2 is widely produced as a lubricant, and thanks to ongoing work at MIT and other labs on making it into large sheets, scaling up production of the material for practical uses should be much easier than with other new materials, Wang and Palacios say.

The material is so thin that it’s completely transparent, and it can be deposited on virtually any other material. Palacios says one potential application of the new material is large-screen displays such as television sets and computer monitors, where a separate transistor controls each pixel of the display. Because the material is just one molecule thick — unlike the highly purified silicon that is used for conventional transistors and must be millions of atoms thick — even a very large display would use only an infinitesimal quantity of the raw materials. This could potentially reduce cost and weight and improve energy efficiency.

In the future, it could also enable entirely new kinds of devices. The material could be used, in combination with other 2D materials, to make light-emitting devices. Instead of producing a point source of light from one bulb, an entire wall could be made to glow, producing softer, less glaring light. Similarly, the antenna and other circuitry of a cellphone might be woven into fabric, providing a much more sensitive antenna that needs less power and could be incorporated into clothing, Palacios says.

A report on the production of complex electronic circuits from the new material was published online this month in the journal Nano Letters; the paper is authored by Han Wang and Lili Yu, graduate students in the Department of Electrical Engineering and Computer Science (EECS); Tomás Palacios, the Emmanuel E. Landsman Associate Professor of EECS; and others at MIT and elsewhere.

In addition to Palacios, Kong, Wang, Yu and Lee, the work was carried out by graduate student Allen Hsu and MIT affiliate Yumeng Shi, with U.S. Army Research Laboratory researchers Matthew Chin and Madan Dubey, and Lain-Jong Li of Academia Sinica in Taiwan. The work was funded by the U.S. Office of Naval Research, the Microelectronics Advanced Research Corporation Focus Center for Materials, the National Science Foundation and the Army Research Laboratory.

Courtesy of David Chandler, MIT News Office. Learn more at www.mit.edu.

August 23, 2012 – BUSINESS WIRE — Rambus Inc. (NASDAQ:RMBS), a technology licensing company, will undergo a restructuring and related cost saving measures to cut its expenses by$30-35 million annually. The majority of the reduction in expenses are being made in general and administrative, while the company continues to invest in strategic businesses.

 “After reviewing our expenses in detail, we have concluded that the support infrastructure can be reduced to improve profitability,” said Dr. Ronald Black, Rambus CEO. This includes a 15% cut to its workforce and a new, 3-business organization structure around memory and interfaces, lighting and display technologies, and Cryptography Research Inc.

Rambus recently partnered with the Industrial Technology Research Institute (ITRI) in Taiwan on the development of interconnect and 3D packaging technologies.

“While we have refined some of our R&D investments, we are preserving all of our strategic initiatives as we believe they will drive significant growth in the future,” Black added. The engineering design teams, Rambus Labs, and other strategic initiatives will be consolidated under Dr. Martin Scott, who will take the new role of CTO.

The reductions in expense and associated workforce will be completed in 2012. Satish Rishi, Rambus CFO, stated: “We expect to take a charge for severance, on a cash basis, of approximately $6 million over the next two quarters. We are also reviewing our assets, businesses, and other contractual obligations and may take additional charges by the end of the year. Excluding these charges, and including additional investment in strategic initiatives, we expect significant net cash savings of approximately $30-$35 million annually.” Jerome Nadel will be joining Rambus as chief marketing officer, responsible for repositioning the company and creating closer relationships with customers.

Business units:

 -Memory and Interfaces, led by Kevin Donnelly

 -Cryptography Research Inc., led by Paul Kocher

 -Lighting and Display Technologies, led by Jeffery Parker.

Rambus is a technology licensing company. Additional information is available at www.rambus.com.

Technologies, Business Models, Applications and Materials Management Strategies in Transition — SEMI reports.

August 22, 2012 — The $100B+ electronics materials industry is undergoing rapid metamorphosis as technologies, markets, business models, and materials management practices are all being restructured to meet the needs of a profit-hungry, environmentally-conscious and innovation-dependent world. The $50 billion semiconductor materials industry alone, for example, needs investment in new lithography resists, novel device architectures, and advanced interconnect and packaging while trying to maintain margins in a consolidating industry where manufacturers know how to leverage buying power. At the same time, advanced electronics materials markets in displays, LED, PV and power semiconductors — collectively larger than traditional semiconductors — are providing new, potentially higher-profit opportunities for suppliers. Both manufacturers and suppliers are responding to these dynamics through joint development agreements and other collaboration models, increasingly important resource recovery strategies, and capitalizing on the synergies between advanced materials requirements among different industries.

These and other issues will be the focus of 2012 Strategic Materials Conference (SMC) to be held on October 23-24 at SEMI headquarters in San Jose, CA. For more information on the conference, visit www.semi.org/en/node/41386. SMC is the only conference dedicated to exploring the synergies, trends and business opportunities in advanced electronic materials. Many of the developments, trends and collaboration in one industry are applicable to other industries, creating potential valuable synergies across the materials spectrum. With presentations by leading market analysts, academic researchers, industry consortiums, leading manufacturers, and top suppliers, SMC will serve as a valuable forecasting tool and accelerator for advanced materials usage in the electronics industry.

To provide a broad reach, the 2-day SMC will feature four 2-hour tracks in semiconductors, carbon-based materials for energy storage and ICs, LED/Power devices, and OLED/printed electronics. Each of these areas are characterized by significant opportunities and challenges. In LEDs and power semiconductors, for example, dramatic increases in solid state lighting and emerging markets for electric vehicles, Smart Grid, solar inverters and other areas have a driven a race in Si, GaN on Si, GaN on GaN, SiC, and sapphire-based technologies. In organic and printed electronics, OLED displays are quickly emerging as a replacement for LCDs even in large format displays, potentially creating opportunities for leveraged technologies in OLED lighting, thin film batteries, printed logic and memory.

Other portions of the conference will be devoted to critical trends and issues in materials usage and materials development, including rare earth supply dynamics, materials recovery, collaboration models and joint development strategies, investment opportunities, and more. Leading industry analysts will also provide market forecast and insights into application trends. Significant networking opportunities including a dinner reception will be included in the conference.

Figure source: SEMI Materials Market Data Subscription May 2012

One of the collaboration strategies explored in the conference will discuss how equipment OEMs, materials suppliers and major manufacturers can work more effectively together. Today, frequent R&D efforts can be distributed at research consortia, manufacturer process development labs, and at materials suppliers, each in conjunction with key equipment suppliers who have their own development programs. Speakers from Intel, Micron, Air Liquid and Applied Materials will discuss common development strategies and ways they can be improved.

Materials refining, recycling and recovery is also becoming a critical issue for many industries due to regulatory compliance and as a cost reduction imperative, with implications for fab design, intellectual property protection, onsite materials infrastructure and other areas. Experts from Envirodigm, Sachem, Intel and Air Products and Chemicals will discuss this “paradigm shift” in manufacturing and how it provides both opportunities and challenges.

SMC has provided valuable information and networking opportunities to materials and electronics industry professionals since 1995. SMC 2012 builds on that legacy, expanding the reach and focus of the conference to examine advanced electronics materials for the semiconductor and adjacent industries. SMC is organized by the Chemical and Gas Manufacturers Group (CGMG) is a SEMI Special Interest Group comprised of leading manufacturers, producers, packagers and distributors of chemicals and gases used in the microelectronics industry. For more information on the conference, visit www.semi.org/en/node/41386.

August 22, 2012 — LG Display (LGD) more than doubled its tablet display sales revenue sequentially in Q2, thanks to panel shipments for Apple Inc.’s iPad, according to the IHS iSuppli Small and Medium Display Service. LGD is also moving forward on a plan to convert some amorphous silicon (a-Si) production to low-temperature polysilicon (LTPS) fab, despite a yield loss inherent in the change.

During its most recent results announcement with industry analysts, LGD said its tablet panel revenue reached $610 million in Q2, indicating tablet panel sales performance was up 126% from $270 million in Q1.

Table. LG Display tablet display sales revenue. SOURCE: LG Display results announcement, August 2012.
  Tablet Sales % in Total LGD Product Line LGD Total Sales Revenue (Billions of US Dollars) LGD Tablet Sales Revenue (Millions of US Dollars)
Q1 2012 5% 5.48 270
Q2 2012 10% 6.12 610

LGD also said the sales percentage of tablet panels in the firm’s overall product line doubled between the two quarters — from 5 to 10%, as shown in the table. By the end of Q2, LGD’s total sales revenue stood at $6.12 billion, compared to $5.48 billion in Q1, according to the company.

“LGD can credit Apple for its outsized presence in the market for small- and medium-sized display panels, defined as those sized less than 10.X”, and used in products like smartphones and digital still cameras, in addition to tablets,” said Vinita Jakhanwal, director for small and medium displays at IHS. “The company started volume shipment for the higher resolution, new iPad panels — the third iteration of Apple’s best-selling media tablet device — during Q2, IHS believes, on top of furnishing panels for the older iPad 2 version. This amplified LG’s presence in the Apple supply chain, in addition to the company already supplying tablet panels in Q1 to other tablet players such as Amazon, Barnes & Noble and Research In Motion.”

Overall, LGD commanded a 38% share of the tablet display market sized smaller than 10” during Q1, when total industry shipments reached some 21 million units. LGD’s share is estimated to come at 37% in Q2, based on that period’s total shipments of 32 million units. The company said it expects its tablet panel sales to increase in Q3 by anywhere from 40 to 50%, which would mean a corresponding rise in LGD’s tablet panel revenue to between $850 million and $920 million.

Also read: The iPhone 5 bottleneck of in-cell touchscreens — Can Sharp, LG, and Japan Display meet demand?

LGD also said during its results announcement it would move forward with a plan to partially convert its a-Si liquid crystal display (LCD) fab into making LTPS LCD panels suitable for high-resolution, high-end displays that are more likely to be used in smartphones. LTPS LCDs can also be used as backplanes for organic light emitting diode (OLED) displays, and the company could have the option of adding its converted G6 LTPS line to active matrix organic light-emitting diode (AMOLED) capacity if it elects to do so.

The current conversion plan calls for keeping 60% of the G6 fab output still dedicated to making a-Si LCDs for tablets, mobile phones or other such applications. The remaining 40% of capacity, however, will now be devoted to producing the high-resolution LTPS LCD displays.

The conversion process will entail an 80% loss in yield as is inherent with the process, LG Display indicated. But despite the capacity loss, the G6 LTPS LCD line will give LGD access to a larger size and more efficient LTPS fab in order to address the fast-growing, high-end smartphone panel market characterized by higher average selling prices. Apple and LG Electronics are currently LG Display’s main customers for smartphone display panels.

The G6 LTPS LCD line will also prove beneficial as Apple continues the evolution of the iPhone display, and as other smartphone original equipment manufacturers (OEMs) also keep improving the display resolution specifications. Given current manufacturing and performance guidance, more than 60 million 4.1” LTPS LCD panels can be produced in a year from a G6 LTPS LCD fab.

The LGD fab conversion move could prove prescient, especially since the company could be competing with Japan’s Sharp Corp. and Japan Display in supplying panels for the new iPhone. By initiating its fab conversion, LGD not only will be able to help support Apple, it will also allow the company to cater to the ever-growing panel needs of the smartphone market.

The conversion is expected to take place in stages over a yet unspecified number of quarters, but its effects will most likely be seen starting in H2 2013 at the earliest.

IHS (NYSE: IHS) provides information and insight in critical areas that shape today’s business landscape, including energy and power; design and supply chain; defense, risk and security; environmental, health and safety (EHS) and sustainability; country and industry forecasting; and commodities, pricing and cost. For more information, visit www.ihs.com.

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