UDC and Samsung Kick the Can Down the Road
January 08, 2018
The OLED Patent License Agreement between Samsung Display and Universal Display expired on December 31, 2017, as well as the material purchase agreement signed at the same time (August 22, 2011). Despite the worldly report earlier in December by Goldman Sachs that the Agreement would be signed before the end of the year, UDC issued a carefully worded press release stating, “The Registrant and SDC are engaged in on-going discussions regarding a formal long-term extension of these agreements. The Registrant expects the parties to continue to conduct business during these discussions. The Registrant intends to provide an update once a resolution to these discussions is completed. No time frame has been established for the completion of these discussions.”
Moving forward, UDC and SDC must now work through not only the details of a new long-term contract that faces some of the same issues indicated above, but a number of new factors are now present, some of which we present here.
In contrast to the note by Goldman Sachs, which claimed that either a new agreement or an extension would be signed by the end of the year, Samsung and UDC will continue to operate under the auspices of the previous agreement. However, when a new agreement is made, Samsung will be obliged to pay any gap between the previous and the new agreement. Neither company wants to terminate the contract permanently, which means that a new contract is inevitable.