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Smaller Japan firms booming in OLED market while giants struggle

Smaller Japan firms booming in OLED market while giants struggle

By BizLED Bureau

Apr 10, 2017: As giants such as Sharp Corp and Japan Display struggle to keep up with South Korean rivals in organic light emitting diode (OLED) market, some smaller Japanese firms are booming in niche areas adding up the OLED manufacturing procedure.

The swing towards OLED has been provoked chiefly due to Apple’s expected acceptance of the OLED technology for its upcoming iPhone series. OLED displays are normally thinner and facilitate more flexibility as compared to LCD screens.

Strong OLED orders

Small Japanese equipment manufacturers such as Canon Tokki Corp and Dai Nippon Printing Co have already received strong OLED orders from Samsung Display as well as other global panel manufacturers.

READ ALSO: Japan Display will produce OLED panels in mass capacity by 2018

The success of such smaller firms indicates a broader drift in Japan’s customer electronics segment. Previous giants like Sharp and Sony Corp have struggled to keep up with their Asian opponents, while smaller manufacturers have emerged by developing niche technologies.

Smaller Japan firms booming in OLED market while giants struggle

According to industry experts, Tokki, a Canon Inc unit which manufactures vacuum evaporators used in manufacturing OLED panels, has an order book of several years.

Teruhisa Tsugami, the CEO of Tokki said that the company is planning to double production capacity in 2016 in order to meet strong demand from clients taht include South Korean, Japanese and Chinese panel manufacturers. The OLED market is abruptly blooming on news that Apple is likely to implement the technology, Tsugami added.

Supply chain

Japanese manufacturers started to invest in OLED technology in the 1990s, headed by Sony and Pioneer. Majority of them have since given up owing to the soaring costs and defect rates. However smaller firms in the supply chain have kept at it, mainly assisted by growing sales to Samsung and LG Display.

One of the OLED consultants at Tokyo-based Analysis Atelier Corp said that Samsung accounts for approximately 70% of orders for those suppliers. The present supply chain has been prepared for Samsung, he added.

Dai Nippon Printing has emerged as a leader in manufacturing evaporation masks that are used to coat light-emitting materials at specific locations on panels. The company has confirmed that will triple its production capacity by 2020.

As Sharp and Japan Display in addition to Chinese display makers such as BOE Technology Group and Tianma Microelectronics expand investment in OLED production, the market is seen increasing 16% yearly to $44 billion by 2020, the industry experts have predicted.

Nikon Corp is all set to receive orders from international panel manufacturers to drive up shipments of its lithography equipment by more than three quarters in the year to March. Shares of Ulvac jumped 64 % over the past year, as against a 22% decline in the wider market.

READ ALSO: Japan to convert all light bulbs, fluorescent tubes to LEDs

Whilst the OLED boom is drawing opponents and making competition more difficult, Japan still has an edge in OLED materials and equipment technologies, according to Junji Kido, Yamagata University professor and organic electronics specialist. It’s such a misuse that local panel makers have not tapped their technologies, Kido added.

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