Sharp makes long-awaited foray into Oled market

Sharp has said a shift from conventional LCD screens to more flexible Oled screens has been slower than expected due to high prices, making it cautious about near-term aggressive Oled capacity expansion.
Sharp has said a shift from conventional LCD screens to more flexible Oled screens has been slower than expected due to high prices, making it cautious about near-term aggressive Oled capacity expansion.PHOTO: REUTERS

Its Oled smartphones will debut in Japan but it is wary of fast growth as demand for their screens slows

TOKYO • Japan's Sharp Corporation unveiled its long-awaited move into the organic light-emitting diode (Oled) market yesterday as the Apple supplier looks to challenge rival Samsung Electronics.

Sharp will offer Oled panels in its new smartphones later this year and plans to sell the screens to other manufacturers, although it has signalled it is wary about a rapid expansion in Oled as momentum for the thinner but more expensive screens slows.

The move comes as the Osaka-based electronics maker, a major supplier of iPhone liquid crystal display (LCD) screens, continues its recovery after being bought two years ago by Taiwan's Foxconn.

Sharp's Oled smartphones will initially go on sale in Japan, by far its major market after it slashed its overseas smartphone business.

The company has not yet reached any deals for sales to other smartphone makers, a spokesman said.

Sharp has so far invested 57.4 billion yen (S$693 million) to produce Oled panels in western Japan, less than a third of the planned 200 billion yen investment that was announced by Foxconn at the time of its acquisition in 2016.

Sharp executives have said a shift from conventional LCD screens to more flexible Oled screens has been slower than expected due to high prices, making the firm cautious about aggressive Oled capacity expansion in the near term.

"The momentum for Oled panels is waning compared with a year ago and is unlikely to pick up immediately," senior Sharp executive Katsuaki Nomura told reporters in July.

Sharp has so far invested 57.4 billion yen (S$693 million) to produce Oled panels in western Japan, less than a third of the planned 200 billion yen investment that was announced by Foxconn at the time of its acquisition in 2016.

The slower acceptance of pricier Oled panels has also offered some relief to Japan Display, another iPhone LCD screen supplier lagging behind Samsung and LG Display in Oled technology.

Japan Display has said it may push back the start of Oled commercial production, currently scheduled for next year, while seeking a partner to help finance the launch of a mass production line.

Analysts say it typically costs more than 200 billion yen to start a mass production line.

South Korea's Electronic Times reported earlier this year that Apple has decided to use Oled screens in all three new iPhone models planned for next year, compared with two Oled models this year.

But industry sources have told Reuters that Apple would not entirely abandon low-cost LCD screens at least for next year.

Still, analysts say the Oled panel market could pick up again if improvements in production efficiency at South Korean and Chinese panel makers lead to lower costs. Oled panels offer richer colours than LCDs and allow for foldable phones.

REUTERS

A version of this article appeared in the print edition of The Straits Times on October 04, 2018, with the headline 'Sharp makes long-awaited foray into Oled market'. Print Edition | Subscribe