Sony and Panasonic recently announced their decision to terminate OLED Organic Light-Emission Diode Television (OLED) businesses. Panasonic also announced that it will sell the whole OLED TV business to Japan Display.

The television has been the staple in the consumer electronics market since broadcasting started on cathode ray tube TVs during 1934 in Germany. The TV has seen several enhancements and breakthroughs in technology throughout the years - color TV in the 1960s, VCR (VTR) in the 1970s and flat panel TV in the 1990s. Large-size LCD screens are now in almost every home.

Electronics manufacturers eliminated production of the CRT TV. The market was slow to switch over to flat panel TVs because of the high costs; however, the rapid decline in prices caused a flood in the market of flat panel TVs. Unfortunately, margins have shrunk dramatically for manufacturers who continue to search for new products and ideas in the television industry.

Japanese and Korean electronics companies introduced a couple of new concepts for the next generation TV over the last few years. They include 3D TV, 4k HDI TV and OLED TV. The industry was extremely optimistic with 3D TV when they introduced it five years ago, unfortunately, the boom in business never blossomed and went by the wayside before it even took off. Now, they are focused on making 4k TV the next “must have” high definition TV. However, the market is still soft even with an aggressive advertising campaign and promotions. OLED TV is not a very new technology, but the incredible technical advances provide a higher resolution and brightness and the addition of a bendable panel. The industry expects (hopes) it will create another major business source because of its unique technology. Several major TV manufacturers in Japan, Korea and Taiwan have thrown their hats in the ring and will expand into this technology.

The decision from Panasonic and Sony surprised the industry because they may miss out on a potentially large market. One of my business associates who is an expert in this industry explained that Sony developed OLED TV a long time ago and was hoping it would be the next generation TV since the LCD panel. About 8 years ago, Sony commercialized the first 11” OLED TV. Since then, they decided to temporarily shut down this department because they could not reduce manufacturing costs enough to provide a retail price that was not ridiculously high. Sony tried to enter the OLED TV market again and introduced large panelTVs a few years ago. Unfortunately, they terminated operations because they were not profitable.

Panasonic has a little bit different story. They dominated the plasma TV segment and built a huge plant to support manufacturing. However, they decided not to compete in the LCD segment, and had to terminate the plasma business after consecutive yearly losses (that’s what happens when you put all you eggs in one basket).

For these reasons, the OLED TV segment could be a promising candidate for the company. But, Panasonic decided quickly to exit from this market. Neither Panasonic nor Sony could explain their reasoning, but I guess the manufacturing yields were very low and the company could did not have any solutions to improve the manufacturing process and reduce costs. Now, they have to think about new technologies for the next generation TV business.

Korean electronics giants Samsung Electronics and LG Electronics continue to explore the OLED TV business. They too have similar yield issues with the production process. If they can’t find a way to lower costs, they should cut and run as fast as Sony and Panasonic did – there is no sense in throwing good money after bad.

Dominique K. Numakura

DKN Research Newsletter #1414, June 1, 2014 (English Edition)

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Headlines of the week (Please contact This email address is being protected from spambots. You need JavaScript enabled to view it. for further news.)

1. Taiyo Yuden codeveloped high-speed optical telecommunication equipment (50Mbps) for under sea applications with Toyo Denki.

2. Toshiba commercialized a new image capture device with small package size (11mm x 11mm) for small size camera modules.

3. Toyota Motors codeveloped a new high efficiency power semiconductor device based on new material of SiC for the applications of hybrid automobiles.

4. Fuji Film demonstrated recording/replay on a magnetic tape with the world-highest recording density of 85.9Gbpsi. It will make a 154TB cartridge available.

5. Murata started volume production of a 0603 size high frequency chip inductor “LQP03HQ Series” with the world highest Q value.

6. AIST has clarified the growing mechanisms of the carbon nanotube forest using SPring-8, Super Photon ring-8GeV.

7. Tohoku University has codeveloped a new paper-like white reflection type LCD introducing a new polarization film.

8. RIKEN developed a thin glass base micro chip fluid pump. It is very stable chemically and physically, therefore it works for various biochemical subjects.

9. Mitsubishi Heavy Industry codeveloped desktop OLED lighting panels for office use. They will reduce the energy costs of the office buildings.
10. Mitsui Chemical's OLED sealing material “Strike Bond XMF-T” was adopted for the curved displays of the smartphones commercialized by LG Electronics.