iSuppli has raised some concerns about Google’s ability to further grow the Android base simply because the display type virtually all Android phones are based on are in short supply. If Android phone vendors stay with their current choice of AMOLEDs – most Android phones use this display type today - they will not be able to compete with the iPhone, which uses the incumbent AMLCD type, the market research firm suggests.
Google Nexus One
iSuppli predicts that there will be about 47.8 million AMOLEDs for cellphones available this year, 74.8 million next year and 184.5 million in 2014.
“Starting with the Nexus One introduced in January, Android-based smart phones have aggressively adopted high-quality AMOLED displays as a competitive differentiator against the advanced-technology AMLCD screen used in the iPhone,” said Vinita Jakhanwal, principal analyst for small and medium displays at iSuppli. “However, rising demand – combined with a limited supply base – has led to the constrained availability of AMOLEDs.”
The iPhone, in comparison, uses the more common AMLCD type, which is available in nearly 1.49 billion units this year, which will grow to 1.75 billion in 2014, iSuppli predicts. Given the enormous growth of smartphone demand, it appears that Android vendors will have to make a choice – either they find a way to stimulate AMOLED production, which are currently only produced by Samsung Mobile Displays (SMD) and LG Displays, or they switch to AMLCDs.
AMOLEDs offer a number of advantages compared to AMLCDs, according to iSuppli: “First, AMOLEDs use no backlights, so they offer potential power-savings benefits compared to AMLCDs – a particular advantage in battery-powered smart phones. Second, the elimination of backlights also makes AMOLEDs very thin relative to AMLCDs. Finally AMOLEDs also offer superior performance, with better fast motion display and a richer color gamut compared to AMLCDs.”
iSuppli said that SMD is investing $2.2 billion in its AMOLED facility by 2012 to ramp up production, while shipments now are limited at LG as the company has yet to increase production. In addition to the South Korean players, Taiwan-based AU Optronics Corp. and TPO Display Corp. are planning to introduce AMOLED products at the end of 2010 or early 2011, but both companies are not shipping any significant quantities at this time, the market research firm said.
The strong demand for AMOLED would mean a strong incentive to ramp up production for the technology, but AMOLED is a newer technology compared to the well-established AMLCD, whose fabs are mature and mostly depreciated in full. As a result, AMLCD has fixed-cost advantages compared to AMOLED fabs that have been around only for the last few years, iSuppli explained. And, of course, newer technologies tend to have higher yield losses in manufacturing, which creates an economic problem on multiple layers: AMLCDs can put significant price pressure on AMOLEDs.
To increase supply, iSuppli said that Samsung is heavily investing in AMOLED and plans to have an additional Gen 5.5 fab up and running at the end of 2011. For its part, LG is starting a new Gen 4.5 fab that will manufacture both LTPS and AMOLED panels.
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