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post #12241 of 12253 Old 07-26-2015, 01:50 PM
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Quote:
Originally Posted by slacker711 View Post
The transcript will probably be out tomorrow but LGD reiterated their 600,000 unit target for the year on their quarterly conference call. They expect 80% of their OLED units to be sold in the 2nd half so it sounds like the 1st half was around 120,000 units. They did add the caveat though that the mix of 65" and 77" units could impact the unit target.
From the transcript:

"We anticipate 7-1/2K, yes. It is the first phase of our plastic OLED to support [inaudible] display. So if we are -- we will have foundry [ph] migration, we will consider another place, but it's not decided yet.

Rob Stone - Cowen & Co.
Okay. And then with respect to the capacity expansion that was planned for OLED TV this year, can you provide any update on how that's progressing from the 14,000 towards the 34,000 substrates?

Hee Yeon Kim - Head of IR Department
Yes. It is in line with our previous communication, another 20K will be added in second half. The production will be starting in the middle second half this year. Totally our OLED TV capacity 34K."

Translation: Q3 will be another quarter like Q2 as far as production output (meaning ~87.5K units) and then output in Q4 may increase to as much as 2.4 times that level (to ~212.5K

This would mean (assuming all 55"):
Q1 35K
Q2 87.5K
Q3 87.5K
Q4 212.5K
2015 422.5K (best case with no significant 65" or 77")

Quote:
They expect yields for 4K to hit 1080p levels by the end of the year. There were a variety of questions about future OLED television fab plans but they were deferred for the future. I dont expect an announcement on a fab expansion until early next year.
From the transcript:

"Andrew Abrams - SCMR
Got it. And is there any way you can discuss your yield? I realize that you're in the process of ramping up, which is going to affect yield no matter what the circumstances are. But is there some guidelines you can give on where you would be in terms of OLED 55-inch TVs on yield?

Hee Yeon Kim - Head of IR Department
In case of 55-inch full HD OLED last year, it was already hit over 80%. Now it is a bit higher than last year. And in case of ultra-high definition, we are on the progress to increase our yield ratio to the similar level of full HD. So we believe ultra-high definition ratio should be similar at the end of this year with the full HD."

Translation:

55EC9300 FHD yields are now 'abit higher' than 'a bit over' 80% - so let's take a stab and say that they are near 85% today.

UHD yileds will not approach the 80% level before the end of 2015, meaning the earlier shipment forecast for Q4 is an absolute best case and is not likely to materialize (since it assumes FHD yield levels from the beginning of Q4).

In terms of worst-case, it seems as though LG should be able to ship at least 300,000 OLEDs in 2015, which would be an achievement in any case (10X year-on-year volume growth).

And if they get the yields on the UHD OLEDS and including the increased capacity up into the 80-85% range by the end of this year, the 1.5M production target for 2016 seems very doable.

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On a more general note, the Korean newspapers have had nearly daily stories about the threat of Chinese LCD vendors. The question on how to compete in the future is usually answered with OLED. LGD is suffering large losses with their OLED television expansion right now but I think that they see it as a necessity if they want to compete with Chinese display vendors.
There was a section near the end where LGD would not commit to ASPs being no more than double those of like-sized premium LCDs.

That (as well as the 'dark edge' quality issue) is a concern...
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post #12242 of 12253 Old 07-26-2015, 03:30 PM
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What's happening with the 77" bendable EG9600 that was shown at CES?
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post #12243 of 12253 Old 07-26-2015, 05:08 PM
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Quote:
Originally Posted by fafrd View Post
Translation: Q3 will be another quarter like Q2 as far as production output (meaning ~87.5K units) and then output in Q4 may increase to as much as 2.4 times that level (to ~212.5K)
LGD isnt supply constrained. They are demand constrained so the price cuts we have seen and the increased distribution should increase Q3 sales over Q2. The price on the 55EC9300 fell from $3500 to $2500 on April 22nd and more recently fell to $2300. The 55EG9600 fell from $5000 to $4500 in the last few weeks and I expect we will see further price declines as we move through the quarter.

Combine that with at least some sales of the new flat models and I do expect some increase in Q3 sales over Q2.


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There was a section near the end where LGD would not commit to ASPs being no more than double those of like-sized premium LCDs.
I think it is impossible tell what LCD ASP they are referring to. If it is the premium segment then the question makes little sense as LGD is already less than twice the ASP of Samsung's offerings (and they dominate the high-end).

It could be the average 4K 55" LCD. That includes any number of sub-$1000 offerings so they are a long way from getting to 2x that ASP.

Absent more clarity on the question, I dont worry much about the response.
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post #12244 of 12253 Old 07-26-2015, 06:14 PM
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Quote:
Originally Posted by slacker711 View Post
LGD isnt supply constrained. They are demand constrained so the price cuts we have seen and the increased distribution should increase Q3 sales over Q2. The price on the 55EC9300 fell from $3500 to $2500 on April 22nd and more recently fell to $2300. The 55EG9600 fell from $5000 to $4500 in the last few weeks and I expect we will see further price declines as we move through the quarter.
When you consider that 14K substrates per month X 6 55" OLEDs per substrate X 80% yield = 67K 55" OLEDS per month or 200K OLEDs per quarter, it sounds like you are right.

On the other hand, the transcript contained this tidbit:

"Unidentified Participant

Hello. Thanks for taking my question. I just wanted to check if your OLED television production goal is still 600,000 for this year and 1.5 million for next year?

Hee Yeon Kim - Head of IR Department
Yes, that's our target number.

Unidentified Participant

Okay. Thank you very much.

Hee Yeon Kim - Head of IR Department
However, if our customers' response for bigger screens such as 65 and 75, it is to be adjusted below. But that's great impact for us.

Combine that with at least some sales of the new flat models and I do expect some increase in Q3 sales over Q2."

Reduced output because of a shift in mix to larger screen sizes only makes sense if they are capacity constrained (and the reference to Q3 over Q2 makes it clear that his comment regarding reduced production numbers is in reference to 2015, not 2016.

Also, some increase in Q3 over Q2 does not sound anything like double (or even 150%).

The math on this equation has never added up...



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I think it is impossible tell what LCD ASP they are referring to. If it is the premium segment then the question makes little sense as LGD is already less than twice the ASP of Samsung's offerings (and they dominate the high-end).

It could be the average 4K 55" LCD. That includes any number of sub-$1000 offerings so they are a long way from getting to 2x that ASP.

Absent more clarity on the question, I dont worry much about the response.
I agree that the recent price moves on the 65" OLED are encouraging (but they are still going to have to go quite a bit lower to drive the kind of Q4 demand LG is hoping for). We're finally back to that magical $6000 price that LG leaked a year ago...

It will be very interesting to see where Panasonic's OLED ends up being priced

Last edited by fafrd; 07-26-2015 at 06:18 PM.
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post #12245 of 12253 Old 07-26-2015, 06:53 PM
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Quote:
Originally Posted by fafrd View Post
Reduced output because of a shift in mix to larger screen sizes only makes sense if they are capacity constrained (and the reference to Q3 over Q2 makes it clear that his comment regarding reduced production numbers is in reference to 2015, not 2016.
Yes, you are right that only makes sense in a capacity constrained environment. There is simply no way that makes any sense when I look at the numbers so my assumption is that this is simply management's attempt to give themselves a little wiggle room on the unit shipment numbers.
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post #12246 of 12253 Old 07-26-2015, 07:38 PM
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Originally Posted by slacker711 View Post
Yes, you are right that only makes sense in a capacity constrained environment. There is simply no way that makes any sense when I look at the numbers so my assumption is that this is simply management's attempt to give themselves a little wiggle room on the unit shipment numbers.
M1 has always been the mysterious part of the equation to me.

M2 phase I is 6000 substrates per month, or 36,000 raw 55" 4K panels per month. At 80% yield (which they are still apparently below), that amounts to a little over 85K 55" 4K OLEDs per quarter (about the estimated total units shipped in Q2). M2 is only producing 4K OLED TVs (and is the only fab producing 4K OLED TVs), so the 'reduced production output for larger panel mix' carries a certain logic for M2. And since the 'size trade off' only applies to 4K OLEDs, it makes sense for M2 (assuming they get 4K OLED sales close to 85K/quarter).

The problem is that LG is not selling anywhere near that number of 4K OLEDs right now. The vast majority are stil the 1080p 55EC9300s.

Those are being produced on M1 and it's never been clear to me how much of M1s 14K sheets/month capacity is dedicated to OLED TVs. Obviously not all, or they would be way over supplied (as you noted) - about 67K per month or 200K per quarter.

And also never been clear to me whether the M1 capacity of 14K sheets per month is full sheets or half sheets. If it is only 14K half-sheets, that would mean 'only' 100K 55EC9300s per quarter - still quite a bit more than stated production shipments, but the gap is narrowing.

In any case, if the M2 expansion stays on schedule, one thing that is certain is that 4K OLEDs are going to become a great deal more affordable in Q4...
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post #12247 of 12253 Old 07-26-2015, 08:22 PM
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I'm wondering if the Korean government will, somehow, subsidize the manufacturing of LG's OLED program. The Korean LCD sets will not be able to be price competitive with the Chinese manufacturers in the future, and OLED is the Korean hope for continued participation in TVs.
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post #12248 of 12253 Old 07-26-2015, 09:10 PM
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Maybe they are banking on the upcoming flat 4K panels having unprecedented sales compared to curved? I guess that's possible given that most videophiles are waiting for the flat ones. But is there really pent up demand for half a million units in 6 months?
I'd suspect that "unprecedented sales" is generated only by one thing: pricing action of a significant nature.

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Originally Posted by fafrd View Post
I agree that the recent price moves on the 65" OLED are encouraging (but they are still going to have to go quite a bit lower to drive the kind of Q4 demand LG is hoping for). We're finally back to that magical $6000 price that LG leaked a year ago...
It seems like magic only starts happening for the 65" at $4000 or so. Samsung seems to be offering $3500 and $4500 right now for "SUHD" 65" TVs. Compare them on Samsung's own web site and they are basically the same. Rather than educate me about why one is $1000 more than the other, I'll just tell you the cheaper one outsells the expensive one by 5:1 based on what I can see and what I know to be true about pricing.

The top end model probably sells very little overall, despite Samsung's marketing might. It's the narrow sliver atop the narrow sliver of the 65"+ market, which starts +/- $1000 these days. I'd guess it's a 50K annual seller. At the same price, LG could sell 50K of those -- maybe. The "better" qualities of the set still won't match Samsung's distribution and marketing.

At $4000, it starts to matter much more. At $3500, it becomes a very interesting product at least against next year's target though we might then be looking at ~250K sales of it over a full year (and it could easily be fewer).

There is no difference in HDMI cables. If you can see the picture without visible dropouts or sparklies, the cable is working at 100%. No other cable will display a better version of that picture. You're simply wrong if you think there is a better digital cable than one that is already working. (Oh, and plasma didn't die because of logistics problems, nor does OLED ship in big boxes because it comes from Korea.)
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post #12249 of 12253 Old 07-26-2015, 11:00 PM
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Just found this: http://www.oled-info.com/lgd-plans-p...-oled-tvs-2020

3M OLED TVs in 2017 and 5M in 2018. Sounds ambitious but credible.

On the other hand, the forecast of a total of 86K 1080p OLEDs and more than 400K 4K OLEDs in 2015 does not...
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post #12250 of 12253 Old Yesterday, 04:40 AM
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LG has announced their new flat models in South Korea. The pricing below doesnt sound great in dollars, but they represent significant pricing cuts from what I can find for the current curved 4K models. For example, the 55EG9600 is selling for 7.1 million Won at a large Korean e-tailer.

http://www.koreaherald.com/view.php?ud=20150727001118

Quote:
In Korea, the company has started offering cash benefits for customers. With the benefits, a 65-inch flat Ultra OLED TV comes to 8.9 million won ($7,600), while both 55-inch flat and curved Ultra OLED TVs are priced at 5.4 million won.
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post #12251 of 12253 Old Yesterday, 05:24 AM
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From a Korean newspaper.

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post #12252 of 12253 Old Yesterday, 06:13 AM
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Quote:
Originally Posted by slacker711 View Post
LG has announced their new flat models in South Korea. The pricing below doesnt sound great in dollars, but they represent significant pricing cuts from what I can find for the current curved 4K models. For example, the 55EG9600 is selling for 7.1 million Won at a large Korean e-tailer.

http://www.koreaherald.com/view.php?ud=20150727001118
The best 65 inch tv ever made for $7600? Not too shabby. It's 2015, many people told us not to expect sub-10k 4K OLEDs before 2020, if then.

I guess we all know how that turned out. Predictions are like ____, everyone's got one.
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^Prices must become reasonable to achieve the manufacturing targets. Hopefully the 65" has no PQ issues of any kind.
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