Originally Posted by ynotgoal
As for the longer term, there is an interesting discussion at the end of the call in the link you provided where they talk about costs compared to LCD. Some of the key words were marked as "indiscernible" but they say the back light unit of the LCD display is 40-50% of the cost of materials in an LCD which, of course, is not in an OLED TV. The cost of materials in OLED is significantly less than LCD.
I can't tell if this is intentionally facile, naive, or just dumb. The cost to produce a product is not merely a function of the cost of materials. It's the cost of materials + the "cost" of the processes involved in terms of throughput, yield, etc.
A good way to understand this is to create a synthetic example.
Let's take good A. It has 3 parts. They all snap together and cost $1 each. The assembly takes basically no time and so it essentially costs $3 to make an "A." (Near zero labor costs)
Now let's look at good B. It has two parts. They cost $1 each too. They, however, need to be gently fitted together. It takes several minutes to fit them together and sometimes you break the part putting them together. How much does it cost us to make a "B"? This isn't a quiz by the way. We don't know, except that it isn't $2
. In fact, it could easily be more than $3.
Every time LG explains OLED as "good B" and neglects to talk about anything other than the components cost $2 and ... cheaper, they honestly come across as fools. I'm not going to quote anyone directly here, but when I've spoken to other OLED players, I get a much more realistic perspective on OLED TVs than this kind of nonsense.
The fixed cost of OLED is currently higher due to the high cost of manufacturing equipment (they are in effect paying to develop the equipment). They note that as they (and I would say also others) buy more equipment those costs decline. In the next round of investment they expect OLED equipment to be not much higher than LCD equipment.
And, again, equipment -- which has a cost association through depreciation, amortization, etc. with each display -- matters. And so the discussion of it makes me confounded because it sounds like someone is
taking the conversation seriously. That makes me further question the nonsense above. Every time they said "no backlight" I half expect some LCD manufacturer to scream out from Taiwan, "Yeah, well no ridiculously expensive OLED material being vapor deposited where tons of it are wasted, so shut up.""
So, analysts expect the 55" OLED to be about $2,000 at the end of 2015 or start of 2016 when M2 is fully ramped. Once an M3 line starts OLED will probably be priced similar to LCD.
So you're suggesting OLED will get to $500 once M3 is up? Because that's what an LCD costs
So, volumes will grow next year but it will still be high end of the market. There isn't a requirement to meet this or that price or volume by Black Friday or Super Bowl or whatever. It will take time to get into the market in a big way but it will happen.
What's your projected time frame for that? I'm having a tough time seeing this $500 OLED (or really even it's ~$800 retail variant from the "because it's a branded product and good" files) before 2017-18.