Universal Display (OLED) 1 Aug 24 2024 Q2 Earnings call transcript

In the latest earnings call, Universal Display Corporation (UDC) reported a solid second quarter performance, with revenue reaching $159 million, operating profit at $56 million, and net income at $52 million or $1.10 per diluted share. The company's strong results were attributed to the growing adoption of OLED technology across various consumer electronics, particularly in tablets and notebook PCs.

OLED Market Momentum Continues

The second quarter of 2024 marked a significant stride for the OLED industry, with leading OEMs such as Apple, Microsoft, Samsung, Dell, and others launching their first OLED tablets and notebooks. This shift towards OLED is expected to continue, with Omdia forecasting a tripling of OLED tablet panel shipments and almost double of OLED notebook panel shipments by the end of 2024. The trend is driven by the increasing demand for high-end notebook PCs and the rise of AI PCs, which are expected to fuel the growth of OLED mobile PCs.

Investment in New Capacity

To support this burgeoning demand, UDC highlighted Visionox's recent $7.6 billion investment in a new Gen 8.6 OLED IT plant, the first of many anticipated new OLED fabs and capacity expansions. This investment underscores the confidence in the future growth prospects of the OLED industry, particularly in the IT sector.

OLED in Televisions and Displays

The OLED market is not just limited to mobile devices. OLED TVs continue to gain popularity, with Dell, HP, Lenovo, Samsung, and other top-tier monitor brands incorporating OLED displays into their product lineups. According to Omdia, OLED TV panel shipments are forecasted to reach 7.1 million units in 2024, with sales growth expected to gain traction and reach nearly 10 million units by 2030. This growth is fueled by the superior picture quality and wider viewing angles offered by OLED technology.

R&D and Blue Phosphorescent Emissive System

UDC's commitment to innovation was evident in their showcasing of a printed red, green, and blue OLED device with 160 pixels per inch, equivalent to 8K resolution for a 55-inch TV. This achievement underscores the company's leadership in OLED technology and its potential for high-volume, cost-effective manufacturing of side-by-side RGB OLED TV panels.

Blue Phosphorescent Emissive System Development

Despite the progress, UDC acknowledged the need for more time to refine the commercial entry specs for their phosphorescent blue emissive system. While this delay is a departure from previous expectations, the company remains confident in the potential of phosphorescent blue and its promise for higher efficiency and performance across a broad range of OLED applications.

Financial Performance and Guidance

In terms of financials, UDC reported a revenue increase of 8% year-over-year, driven by strong demand for OLED technology. The company raised its annual guidance, now expecting revenues to be in the range of $645 million to $675 million. This increase reflects the company's optimism about the future growth prospects of the OLED industry.

Future Outlook

As UDC celebrates its 30th anniversary, it looks forward to pushing the boundaries of innovation, collaboration, and excellence. With a robust R&D program underway, the company remains focused on hitting the commercial entry specs for phosphorescent blue, a key milestone in the OLED industry's development.

In conclusion, Universal Display Corporation's second quarter results underscore the robust growth trajectory of the OLED industry, driven by the broadening adoption of OLED technology across various consumer electronics. The company's commitment to innovation, particularly in the development of phosphorescent blue, positions it well for future growth. With a strong financial performance and a positive outlook for the future, UDC remains a key player in the OLED ecosystem, poised to deliver cutting-edge technologies and materials for the industry, its customers, and its shareholders.