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Erik C. Astheimer
Research Analyst
(914) 921-5168
Organic Light Emitting Diode (OLED)


Source: Fortuno Doro Technology Corp.



































Gabelli & Company, Inc.



- 2 -
OLED A Primer
On May 23
rd
-28
th
, 2004, the Society for Information Display will hold its 2
nd
annual conference in Seattle,
Washington. In advance of the conference, we wanted to provide you with a brief primer on the current display
technology market as well as highlight the emerging technology of Organic Light Emitting Diodes (OLEDs). OLEDs,
which are considered by many to be a viable technology next to liquid crystal display (LCD), has been gaining interest
due to its unique characteristics versus other competing technologies. While commercialization of the technology is
still approximately 3-5 years away, there are some OLED displays that are being manufactured and incorporated into
small consumer electronic products such as cellular telephones and digital cameras. The market potential for OLED
material producers and LCD manufacturers will increase further as the limitations are addressed and the proliferation
of products involving these types of displays expand.

While OLEDs will not displace LCDs in the near future, the current research and commercialization trends are
increasing. We highlight one publicly traded pure-play OLED company in this report; Universal Display Corporation
(PANL $10.51 NASDAQ).

Liquid Crystal Display
Liquid crystal display technology currently dominates the flat panel display (FPD) market in terms of investment,
revenues, and mind-share. As we highlighted in our January 23rd, 2004 report LCD Bright Opportunities, the FPD
industry is poised for dynamic growth due to the increased penetration of notebook PCs and liquid crystal display
monitors in the PC market as well as the growing popularity of LCD-TVs in the consumer market. The worldwide
FPD market is roughly $40B with a 23% CAGR through 2006. In particular, the LCD market, which represents
approximately 75% of the FPD industry, is projected to grow at 26% to about $52B by the year 2006. LCD
technology functions through the use of pixels composed of liquid crystals that have the ability to polarize light in the
presence of an electronic field. Compared with conventional cathode ray tubes (CRTs), LCDs consume less
electricity, generate less heat, and have a better contrast ratio even when compared to plasma display panels.

Display Technologies What are they?
Today, there are many different types of display technologies in the marketplace, each with their own unique
characteristics to address specific applications. Below is a sample list of popular approaches used in display systems:
Cathode Ray Tubes (CRT) The technology used in most televisions and computer display screens. A CRT
works by moving an electron beam back and forth across the back of the screen.
Field Emission Displays (FED) FED is a flat cathode ray tube that uses a matrix-addressed cold-cathode to
produce light from a cathodoluminescent phosphor screen. The technical feasibility of the FED has been
demonstrated and various companies and institutions are in the process of developing cost effective
prototypes; however, constraints still exist.
Organic Light Emitting Diodes (OLED) Unlike LCDs, which require backlighting, OLED displays are
emissive devices that give off light rather than modulating transmitted light or reflected light. OLEDs possess
unique characteristics which will be discussed later in this report.
Plasma Display Panels (PDP) Technology that operates by controlling discharges from ionized gases.
Plasma displays are becoming an alternative to LCD as they can be easily manufactured in a large format.
Compared to conventional CRT displays, plasma displays are about one-tenth the thickness--around 4'', and
one-sixth the weight.
Light Emitting Diodes (LED) An LED is an electronic device that lights up when electricity is passed
through it. LEDs have been around for decades and are used in everything from car dashboards, to large
indoor/outdoor display systems, to portable electronics as indicator lamps
.

Liquid Crystal Displays (LCD) Quickly becoming the dominant display technology in the FPD market.
Function through the use of pixels composed of liquid crystals that have the ability to polarize light in the
presence of an electronic field. The core advantage to LCD is the usefulness, relatively low power
consumption, and high contrast.

Gabelli & Company, Inc.


- 3 -
Overview Organic Light Emitting Diodes (OLEDs)
Eastman Kodak developed the first OLED in the late 1980s, and since then, scientists have been making the necessary
strides to overcome limitations of the technology, positioning OLED to become commercially available over the next
3-5 years. OLEDs are currently produced in small quantities for initial applications in OLED displays found in a wide
variety of portable consumer electronics (ideal for cellular phones and portable electronics, car audio systems, and
potentially handheld TVs and notebook PCs). One of the most alluring characteristics of the technology is the ability
for it to be manufactured on plastic, thereby opening up the possibility for a flexible OLED display that could lead to
many disruptive display applications. DisplaySearch estimates the OLED shipments to grow significantly from $263
million to $3.5 billion by 2008. In 2002, approximately 3.5 million passive matrix OLED sub-displays were sold, and
over 10 million sold were sold in 2003.


OLEDs are extremely thin layers of organic material applied to a
substrate of glass or plastic. When the material is stimulated by an
electrical charge, light is emitted. In defining a simple OLED structure
in a more scientific way, it is constructed using two electrodes separated
by a conducive organic layer; when these electrons collide within the
organic layer, photons are emitted. OLED technology is solid-state,
uses lower voltages than plasma, and can be manufactured more thinly
than active matrix LCDs.

The Benefits of OLED:
OLEDs are possibly a more attractive alternative to LCD technology due to the following unique characteristics:
Thinner, lighter approximately 1.5 millimeters thick

Brighter OLEDs have a higher resolution, sharper contrast, and a larger lumination range. OLED is also a
light emitting technology that requires no backlight like an LCD
Wider viewing angle viewing area up to 180 degrees. LCDs have viewing angles of 160 degrees or less
Low power consumption OLEDs operate at fairly low voltages - can be battery driven. Depending on the
technology, required voltage can range between 1-20 volts. Requires approximately half the power
consumption of an LCD as liquid crystal displays always have their backlights on.
Flexibility

can be fabricated on plastic substrates, opening up possibility for flexible

displays

Limitations and Opportunity:
With every emerging technology, constraints arise creating roadblocks to commercialization. For OLEDs, much of the
technical hurdles relate to lifetime (durability) issues, the extreme sensitivity to moisture, and limitations with the color
blue. Since the technology revolves around the use of intricate pixels that tend to degrade over time, this leads to a
loss in brightness and possible shifts in color. OLED producers are also looking for ways to increase the size of the
viewable area, as the current technology is only suited for smaller applications. Lastly, one of the impediments to the
commercialization of OLEDs is addressing the high manufacturing costs associated with production. OLED
producers could ultimately benefit from lower capital investment costs stemming from the possible and relatively easy
conversion into existing LCD manufacturing facilities.

Conclusion
As OLED display technology matures, it will be better able to improve upon certain existing limitations of LCD and
other flat panel display technologies including: high power consumption, costly manufacturing, limited viewing
angles, and poor contrast ratios. While LCD penetration into major display applications is expected to be robust for
the next decade, a small and increasing portion of flat panel display growth could come from OLEDs. When this
occurs, materials producers and flat panel display manufacturers addressing the market today will be the prime
beneficiaries. After the 2
nd
Annual Society for Information Display Conference, we will share new opportunities in
the worldwide display market as well as highlight key advancements in the field that will drive growth and unlock
value of existing participants.



Source: Sanyo
Source: Samsung


Gabelli & Company, Inc.


- 4 -
Corporate Participants in advancement of OLED Technology:
The current market consists of just select number of pure-play companies, large multi-national players, and a plethora
of private companies. Existing LCD manufacturers are also positioned to partake in the possible commercialization of
organic light emitting diodes.



















Source: Company reports, Stock Prices as of May 19, 2004
OLED Materials/Technologies
Country
Price
Ticker
Comment
Universal Display Corp.
United States
$10.51
PANL
Involved