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Seriously, there is an OLED shortage



I’ve mentioned this in passing a couple of times, but there is an OLED shortage. Samsung is taking the lead in addressing the problem, but building a new state-of-the-art factory takes more than a couple of months. In the meantime, there is an OLED shortage.

The reason I bring this up directly is because I’ve read a few blog entries asking why recent smartphones, like the Droid X and HTC EVO, are in such short supply. (Not picking on them, but the most recent I read was from ZDNet’s The Mobile Gadgeteer.) Maybe it’s because, as ZDNet’s The ToyBox put it, “cell phones are being designed with [OLED] screens quicker than the displays can actually be produced.

This, I’m sure, was a primary reason behind Apple’s decision to stick with LCD, one that has paid off since they are able to supply millions of devices while competitors are running out after a few hundred thousand. Apple is backlogged, but they’re still moving units out the door. I don’t think I have to explain why this is a severe problem for iPhone competitors. No matter how much better your product, you simply can’t outsell a competitor if you don’t have product to sell. Motley Fool estimates Samsung’s entire AMOLED output could only supply half of Apple’s display needs. Thus, the industry cannot rely solely on OLED if they intend to sell more than half what Apple does. They can either let the shortages of individual models continue, or switch to LCD for some future models. Expect one or the other for the foreseeable future.

A nightmare scenario for the iPhone competitors would be if Apple decided to utilize OLED in a product line. Much like Apple is gobbling up the world’s supply of flash memory, triggering shortages for everyone (including themselves, which is why flash storage wasn’t doubled for the iPhone 4), if they stepped into the OLED market with cash in hand, the effect would be incredibly disruptive for their competitors.

Update: Sorry, as Charbax points out, I’m a couple devices behind on this. Both the Droid X and HTC EVO sport LCD displays, so the switchover has already happened. The OLED shortage explains why those went with LCD, but doesn’t explain their supply shortages. Could be the flash memory shortage. Could be they just aren’t planning on selling more than a couple hundred thousand at launch.



  1. Drew

    07/22/2010 at 8:47 am

    Wow. For such a largely needed component I wouldn’t expect a shortage. Samsung to lead the way in making more I guess. Go Samsung go. We can’t live without em. :D

  2. Charbax

    07/22/2010 at 8:53 am

    Droid X and HTC EVO are using LCD not Super AMOLED.

    Samsung doesn’t seem to be having troubles shipping millions of Galaxy S these past few weeks. Samsung Galaxy S has an amazing 4″ Super AMOLED screen, it seems to be available wherever you want to buy it, it’s not out of stock yet they are selling many.

    Though it is true Samsung for now is only supplying enough Super AMOLED screens for their own phones. I guess HTC, Dell and others have second priority access to their 4″ Super AMOLED screens. But those devices with Super AMOLED screens made by other manufacturers then Samsung will surely be released in the next couple of months.

    • Sumocat

      07/22/2010 at 10:25 am

      Apparently I am a couple devices behind on my assessment that device makers will need to switch to LCD. Thank you for the correction.

  3. Charbax

    07/22/2010 at 8:58 am

    Not to mention there has been several millions of normal AMOLED Android phones that have been sold these past 6 months.

    Anyways, LCD is available for any Android manufacturer that doesn’t want to use the more expensive AMOLED screens. And LCD is not bad at all. Most of the sub-$300 unlocked Android phones that are coming out are going to be using LCD screens. There are several major LCD screen manufacturers that can provide mobile phone sized capacitive screens, while AMOLED is only made by Samsung for phones.

  4. Charbax

    07/22/2010 at 7:14 pm

    Droid X and HTC EVO shortages are simply that Android phones are being sold at a rate of 200’000 units per day worldwide. That’s 1.4 million Android phones per week, 6 million Android devices per month.

    Manufacturing requires an advance payment for whole bill of materials and manufacturing costs, that’s about $1 Billion per month.

    Just in case there is some manufacturing fault that doesn’t get noticed until launch (like the defective iPhone 4 antenna) it is normal for the first batches to be manufactured in lower quantities then followed by much larger quantities once the launch hardware revision is checked to have a good yield, low number of defective units being returned and once the consumers interest at launch has been measured.

    Usually though, a manufacturing batch takes 2 months to get from upfront order to delivery in stores. But I guess for second batches that come after launches, the factories have some kind of way to speed things up and deliver the units as fast as possible. Probably something like $20-30 fee for “express production and delivery”. Maybe the Chinese workers are even paid $0.50 extra an hour as a bonus for working late hours and longer shifts.

    • Charbax

      07/22/2010 at 7:18 pm

      By the way, HTC for example makes less than $100 Million in profits per month. So investing hundreds of billions per month to manufacture unlimited amounts of their latest phones, may just not be worth the risk. Especially since newer and better Android phones seem to be released every other week so who knows, if HTC ordered 3 million of those HTC EVO phones, and Samsung Galaxy S Epic turns out to be much more attractive to consumers, they could be in a lot of trouble. So the only way to go is to order not more than you are sure that you can sell.

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