Kodak Exits OLED Business After 30 Years; LG Poised to Compete with Samsung

By Paul Semenza - Senior Vice President, Analyst Services, DisplaySearch

After three decades of fundamental research, materials and device development, display manufacturing, materials sales and licensing activities, the first developer of organic light-emitting diode (OLED) displays is exiting the business. On December 4, Eastman Kodak announced that it was selling its OLED business to “a group of LG companies.” Kodak did not specify which LG group companies purchased the business or the financial terms.

Kodak kicked off the OLED industry with its reports of the first working devices in 1987. Within a few years, they had demonstrated active-matrix OLED displays, and in 1997, Pioneer shipped the first commercial OLED displays. Other fundamental OLED approaches and materials were developed at Cambridge University, which developed light-emitting polymers (commercialized by Cambridge Display Technology, now owned by Sumitomo) and Princeton and USC, which developed phosphorescent materials (commercialized by Universal Display Corporation).

These and other OLED technologies may well have greater promise for future development. But Kodak’s “small molecule” technology, in the form of materials and intellectual property, enabled OLED to become a mass-production display technology, with numerous display developers licensing Kodak technology and manufacturing using vapor deposition through fine metal masks. The vast majority of OLED displays produced to date use Kodak’s technology and/or materials in some form. This has enabled what will be a billion-dollar industry next year, according to our Quarterly OLED Shipment and Forecast Report.

Kodak’s technical successes resulted in licensing revenues, but their efforts to capture a larger portion of the value of the OLED market mostly failed. The biggest was its joint venture with Sanyo, called SK Displays, which involved an unsuccessful effort to utilize existing LTPS technology to mass-produce AMOLED displays. Kodak also tried selling cameras with OLED displays, and more recently portable TVs and digital picture frames. The company also developed manufacturing equipment and technologies around its chosen approach to producing full-color displays: white OLED with color filters. Most recently, Kodak has been pursuing OLED lighting.

LG has been working on OLED since the 1990s, at LG Electronics, at LG.Philips LCD and now LG Display. The acquisition of the Kodak technology portfolio will certainly substantially increase LG Display’s OLED technology portfolio, but the overall impact on LG Display’s position in OLED manufacturing is less clear, as Kodak’s technology portfolio is not likely to have a direct impact on the transition to manufacturing facilities higher than Gen 4, which is required in order for AMOLED to compete with TFT LCD in large-size (>10″) markets. Likewise, it is not clear how the Kodak technology will help LG Display compete with Samsung Mobile Display, which had a 73% share of the global market in Q3′09.

At the same time, this acquisition meshes with LG Display’s plans to rapidly move up in AMOLED screen sizes, after announcements at FPD International that it will produce 20″ panels in 2010, 30″ in 2011, and 40″ in 2012. Clearly this will require billions in advanced-generation AMOLED fabs. Perhaps the biggest issue for the industry raised by this acquisition is what will happen to the existing Kodak licensees, who are LG Display’s competitors. Will LG continue to license small-molecule technology to them?