OLED at D. Bank notes - 9/9/14
Q&A format with Sid after brief intro
- Confirmed Customer C in their 10-K is LG. Said he believes LG sold 100K OLED TV's in 2H2014, using DisplaySearch as a source.
- LG license agreement - Said LG does not have access to all of UDC's IP in their current agreement, they have the right to use Phosph. emitters in a device. Highlighted the current 55" OLED is selling for $3500 and said he has already bought one.
- Said his kids, who have iPads, saw the new OLED Galaxy S tablets and said they want one of those now.
- LG fab capacity - Highlighted if LG adds a second Gen8 line in the near future their total capacity would approach Samsung's total at EOY2013. This is the second time I've heard Sid almost look past the current Gen8 line and talk about the next one. He expanded on this by saying he can see LG signing a LT agreement and becoming a customer on par with Samsung, I took the timeframe to be EOY2016.
- 4K OLED TV's use the same amount of UDC material(s) as 1080P sets, with some deviation for differences in materials wasted.
- UDC is the sole supplier of phosp. emitters. There is nobody else.
- One gram of emitter makes 5K 5" screens. The current mixture for red is 3-5% emitter.
- Highlighted the phosph. architecture patents run through 2020, phosph. materials patents are much newer and the current ones have 16-17 years left. They have 1500 'other' architectural patents, beyond the 60 or so that expire from 2017-2020, and expect those patents to allow for their licensing business to continue well beyond 2020.
- They received architectural and material composition patents in the Fuji purchase. The new red & green emitters use a combination of legacy UDC & Fuji patents.
- Does not believe LG is running at full capacity(yet), but thinks they expect to soon, and expects there will be a big push entering the holiday season. He expects the trend of LG making up a greater percentage of their revenue to continue in 2H2014.
- Provided a good discussion of current and new manufacturing techniques, a good tutorial for anyone interested, around 28:00 mark.
- Said the Note4 has a plastic, conformable screen. Said truly flexible screens require a lot of advancements in the non-OLED parts of a device.
- Host material going into Japan and then exported back out will continue to have a 10% VAT added to UDC's revenue number. Confirmed Customer B is the host business at Nippon Steel.
- Expects to generate $50M in free cash flow in 2014.
