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SDC’s Earnings Fell Sequentially Due To Weak Seasonality For Mobile Products
On a Y/Y basis, however, SDC earnings improved significantly led by a higher demand and OLED utilization rates. In the Mobile business, earnings improved significantly both sequentially and Y/Y as sales of flagship and mass market smartphone models grew considerably and its contributions of products in the Device Ecosystem lineup such as tablets, PCs and wearables also grew. Outlook – 2Q21 expect mobile panel sales to decline due to weak seasonality for smartphones and the effects of some component shortages. In Mobile business, revenue and profitability are likely to decrease as flagship new product effects decline. And some components experienced supply issues, but we will work to minimize the impacts of the component issues by actively managing our local SCM capabilities. Outlook 2H21 we will continue our efforts to increase adoption of OLED panels while also establishing a foundation for QD display in the large panel business. The mobile business will strive to secure a solid profitability by further popularizing foldable models, expanding our lineup of mass market 5G models and bolstering growth of tablets, PCs, and wearables.
In the first quarter, although the mobile display business posted a declining earnings sequentially due to shortages for some smartphone components and weak seasonality, growing adoption of OLED displays by flagship right to entry-level models is driving growth Y/Y. For the large display business, demand increases triggered by the expansion of contactless services and increasing VOD viewing hours led to positive changes in market factors, such as increase in ASP. However, earnings declined sequentially as Samsung continue to convert manufacturing lines in preparation for the next-generation TV market.
Outlook for the second quarter, the mobile display business will see a slowdown in sequential growth due to the prolonged impact of the weak seasonality and component shortage in the first quarter. And latent demand for the new smartphone model (Z Fold 3 and Z Flip 2 is scheduled for release in the third quarter. However, the goal is to raise utilization rates and secure profitability by securing key display components and further collaborating with customers. The large display will continue to pave the way for a smooth transition to new business model based on QD-OLED display technology. Outlook for second half of 2021. The smartphone market will recover in the second half thanks to rising 5G smartphone demand and economic recoveries.
They expect to increase OLED market share in the mobile display market by diversifying within new application areas including IT devices, such as tablets, laptops and foldable phones, as well as automobiles.. For the large display they are preparing for mass production of QD-OLEDs.
Mobile Communications: In Q1 2021, market demand decreased on sequentially, but increase Y/Y as the market was significantly impacted by COVID-19.
Mobile business, flagship smartphone sales increased sequentially as the Galaxy S21, which launched in January was well received by customers. The Galaxy A series equipped with innovations and price competitiveness continued its solid sales performance. They experienced material growth in tablet, PC and wearable businesses.
Q221 outlook. Market is expected to decrease sequentially due to component shortages amid continued seasonally weak demand. Mobile business, sales to ramp up for A72 and A52, for the first four A series models and the new notebook PC Galaxy Book. Expect robust sales of tablets and wearables to continue. Second half and annual outlook. Expect market demand to recover to a pre-COVID level on annual basis or meet a gradual economic recovery and full-fledged expansion of 5G market. Mobile business, expect continuing sales momentum of Galaxy S series and by popularizing the affordable category A Series, plus introducing the Z Fold 3 and Z Flip 3. TV demand in second quarter should increase Y/Year due to the Europe Cup and Olympics that were postponed last year. Market uncertainties exist as several countries have a resume lockdown policies following additional waves of COVID-19. Expect to strengthen advanced TV leadership with the launch of Micro LED for home.
In Q121, the Display Panel Business, the OLED portion of sales was in the high 80% range and OLED sales volume declined by 1% in the late teens. The Mobile business in the first quarter sales volume was around 81 million units for handsets and 8 million units for tablets. The blended ASP, including tablets was US$243. And the smartphone portion of handset sales volume was in the mid-90% range. For the second quarter, expect sequential shipment decline for handsets, but rise for tablets. And the blended ASP is likely to decline sequentially. The smartphone portion of handsets will be in the low-to-mid 90% range. In the TV business, in the first quarter, sales volume declined by mid-20% range, and shipments in the second quarter will decline by a mid-teen percentage. There are some shortages of key components including LCD panels and semiconductors. This trend will remain for some time going forward.
On a Y/Y basis, however, SDC earnings improved significantly led by a higher demand and OLED utilization rates. In the Mobile business, earnings improved significantly both sequentially and Y/Y as sales of flagship and mass market smartphone models grew considerably and its contributions of products in the Device Ecosystem lineup such as tablets, PCs and wearables also grew. Outlook – 2Q21 expect mobile panel sales to decline due to weak seasonality for smartphones and the effects of some component shortages. In Mobile business, revenue and profitability are likely to decrease as flagship new product effects decline. And some components experienced supply issues, but we will work to minimize the impacts of the component issues by actively managing our local SCM capabilities. Outlook 2H21 we will continue our efforts to increase adoption of OLED panels while also establishing a foundation for QD display in the large panel business. The mobile business will strive to secure a solid profitability by further popularizing foldable models, expanding our lineup of mass market 5G models and bolstering growth of tablets, PCs, and wearables.
In the first quarter, although the mobile display business posted a declining earnings sequentially due to shortages for some smartphone components and weak seasonality, growing adoption of OLED displays by flagship right to entry-level models is driving growth Y/Y. For the large display business, demand increases triggered by the expansion of contactless services and increasing VOD viewing hours led to positive changes in market factors, such as increase in ASP. However, earnings declined sequentially as Samsung continue to convert manufacturing lines in preparation for the next-generation TV market.
Outlook for the second quarter, the mobile display business will see a slowdown in sequential growth due to the prolonged impact of the weak seasonality and component shortage in the first quarter. And latent demand for the new smartphone model (Z Fold 3 and Z Flip 2 is scheduled for release in the third quarter. However, the goal is to raise utilization rates and secure profitability by securing key display components and further collaborating with customers. The large display will continue to pave the way for a smooth transition to new business model based on QD-OLED display technology. Outlook for second half of 2021. The smartphone market will recover in the second half thanks to rising 5G smartphone demand and economic recoveries.
They expect to increase OLED market share in the mobile display market by diversifying within new application areas including IT devices, such as tablets, laptops and foldable phones, as well as automobiles.. For the large display they are preparing for mass production of QD-OLEDs.
Mobile Communications: In Q1 2021, market demand decreased on sequentially, but increase Y/Y as the market was significantly impacted by COVID-19.
Mobile business, flagship smartphone sales increased sequentially as the Galaxy S21, which launched in January was well received by customers. The Galaxy A series equipped with innovations and price competitiveness continued its solid sales performance. They experienced material growth in tablet, PC and wearable businesses.
Q221 outlook. Market is expected to decrease sequentially due to component shortages amid continued seasonally weak demand. Mobile business, sales to ramp up for A72 and A52, for the first four A series models and the new notebook PC Galaxy Book. Expect robust sales of tablets and wearables to continue. Second half and annual outlook. Expect market demand to recover to a pre-COVID level on annual basis or meet a gradual economic recovery and full-fledged expansion of 5G market. Mobile business, expect continuing sales momentum of Galaxy S series and by popularizing the affordable category A Series, plus introducing the Z Fold 3 and Z Flip 3. TV demand in second quarter should increase Y/Year due to the Europe Cup and Olympics that were postponed last year. Market uncertainties exist as several countries have a resume lockdown policies following additional waves of COVID-19. Expect to strengthen advanced TV leadership with the launch of Micro LED for home.
In Q121, the Display Panel Business, the OLED portion of sales was in the high 80% range and OLED sales volume declined by 1% in the late teens. The Mobile business in the first quarter sales volume was around 81 million units for handsets and 8 million units for tablets. The blended ASP, including tablets was US$243. And the smartphone portion of handset sales volume was in the mid-90% range. For the second quarter, expect sequential shipment decline for handsets, but rise for tablets. And the blended ASP is likely to decline sequentially. The smartphone portion of handsets will be in the low-to-mid 90% range. In the TV business, in the first quarter, sales volume declined by mid-20% range, and shipments in the second quarter will decline by a mid-teen percentage. There are some shortages of key components including LCD panels and semiconductors. This trend will remain for some time going forward.
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