Sharp Makes Long-Awaited OLED Foray, Wary of Significant Spending

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Sharp Makes Long-Awaited OLED Foray, Wary of Big SpendingJapan’s Sharp Corp unveiled its long-awaited move to the organic light-emitting diode (OLED) market on Wednesday as the Apple Provider looks to Grab rival Samsung Electronics Co.

Sharp provides OLED panels in its new smartphones after this year and intends to sell the screens to other manufacturers, though it has signalled it is wary about a rapid expansion in OLED as momentum for its thinner but more costly displays slows.

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

The business hasn’t yet reached any bargains for sales to other smartphone makers, a spokeswoman said in a launch function in Tokyo.

Sharp has thus far spent JPY 57.4 billion ($505 million) to make 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 anticipated due to high prices, making the company cautious about competitive OLED capacity growth in the near term.

The slower endorsement of pricier OLED panels has also offered some aid to Japan Display Inc, yet another iPhone LCD screen provider lagging behind Samsung and LG Screen in OLED technology.

Japan Screen has said it might push back the beginning of OLED commercial production, currently scheduled for 2019, while trying a partner to help fund the launching of a mass production line. Analysts say it typically costs over JPY 200 billion ($1.8 billion) to start a mass production line.

“To our surpriseour clients aren’t moving away from LCD panels,” Chief Financial Officer Takanobu Oshima said in August.

South Korea’s Electronic Times reported earlier this year that Apple has decided to use OLED screens in all three new iPhone models intended for next season, compared to 2 OLED models this year.

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

Still, analysts say the OLED panel market may pick up if improvements in production efficiency at Korean and Chinese panel makers lead to lower costs. OLED panels provide richer colors than LCDs and allow for foldable telephones.

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