Originally Posted by stas3098
The big question here is: where is the dramatic and unexpected price reduction going to come from?
My guess is that it is going to come straight from LGD's pocket.
This seems correct to me.
It's not like the components costs are going to start radically dropping (because most components like TFTs are similar with LCDs' and LCD's components prices are at the end of their rope as they are) nor material manufacturers, who got into the OLED material thing for high margins, are going to engage into margin-cutting.
We'd been told for a long time oxide at volume was going to cheaper than a-Si at volume. Whether we're (a) supposed to believe that (b) whether that accounts for more than a few $ per display even if we do are different matters.
On a M2 ramp-up note, I am pretty sure it will be full-blast on by the middle of the year with the noticeable price drop coming in the fall. Also, I am sure LGD is going to have to allow whatever price the street sets for their OLED TVs if they are serious about supplanting LCD. They are going to have to need a near 100 percent sell-through if they are to feel the need for expanding capacity.
That last sentence is again the chicken/egg thing. Without selling out, they can't even justify making more. Without pricing to sell out, they can't possibly sell out.
Originally Posted by darinp2
Does whether a low volume can be sold for say $5k, $6k, or $8k in 2015 tell a company that much about how much they could sell millions of units for in 3 years?
I doubt it matters much. I just don't think they sell more than tiny quantities at $8K. So they learn next to nothing about most of everything.
Originally Posted by slacker711
A few points.
1) I dont think that OLED's can become the dominant display technology from a unit standpoint with vapour deposition. I think they are on course to become the dominant display technology for the high-end of the television market and for the vast majority of AVS readers. An M3 fab with 75,000 substrate capacity would nearly achieve that goal. The mid-tier of the market will open up as capacity is added and prices follow the cost curve.
So you mean 50+% of this mythical high end. But let's be clear on something. With M2 + M3, that's still 100K substrates a month, 6M TVs a year. The distance between that demand and today's pricing is measured in astronomical units.
2) LG Display is not run by Elon Musk or Steve Jobs.
And that's partly why LCD will dominate the TV market well into the next decade. (n.b. Of course, so will gas-powered vehicles, but such is the peril of analogies.)
3) The torrent of capacity that you are looking for will come if/when other vendors start adding OLED capacity. No single vendor would be taking a bet the company kind of risk but the combined addition would get to the kind of numbers that you are looking for.
Waiting... waiting... Waiting on the world to change.
4) The key indicator of LG Display's cost structure with mature yields is not current 4K pricing but the 55EC9300 which is selling for between $2000 and $3000. That represents the vast majority of their current sales and gives an idea as to the revenue per substrate that will give them an acceptable return. Of course, I am assuming that 4K yields eventually converge with 1080p yields but I dont think that is unreasonable considering the recent commentary on yields and the fact that 4K adds little in additional bill of materials.
So $2000 is somewhere near where they need to be. I'm still very skeptical there's a worldwide market for 6M TVs where the 55-inch models are even $2000, unless you make share assumptions approaching 100% (illogical) and assume expansion of the high-dollar category (also illogical).