OLED - Earnings call transcript Q3 2021 | Universal Display Corporation

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Operator

Good day, ladies and gentlemen, and welcome to Universal Display Third Quarter 2021 Earnings Conference Call. My name is Sherry, and I will be your conference moderator for today's call. [Operator Instructions].

As a reminder, this conference is being recorded for replay purposes. I would now like to turn the call over to Darice Liu, Director of Investor Relations. proceed. Please

Darice Liu

good call. to and quarter Display's everyone. conference earnings afternoon, you, Universal Welcome third Thank

on call Executive me Executive Chief Joining the Officer. Officer; and Abramson, Financial and Chief President Sid Rosenblatt, Vice and today President are Steve

Further, of is live time available Universal that contains webcast is in call date for Before a live call of a accurate the any Display's call redistribution, of made this or form will be the property remind webcast portion strictly is this being and any This written as Any that is period on rebroadcast Display. without time-sensitive today's of Steve call, of the consent Universal XXXX. of only me Display November begins, retransmission of let information website. prohibited. of you X, Universal of this express call

statements actual in may statements and significant we our call, are this are and to differ to uncertainties statements. filed make Universal risks SEC disclaims a referenced obligation subject These should During on of be company's of any making with anyone results These in Display materially. number forward-looking reports the considering company's and current by risks expectations. uncertainties, may securities. any any and based the investments discussed these update periodic the

would I Steve like Now, to turn to the over Abramson. call

Steven Abramson

and the company. first let on an further share. will $XXX.X of net with But was on today's $X.XX pleased the our OLED and report to XXXX in details our update Operating diluted $XX.X on third We're to or financials. provide per call. Darice. industry everyone quarter welcome was Sid, Thanks, And million that revenue profit outlook on $XX.X income me the million million. was go

coming are move to the new for product a preparing of OEMs panel we we and proliferation investment that in the years. and wave As makers believe market, OLED

and and includes IT There and For TVs. market electronic smartphones, laptops, display are makers. tablets, opportunities, monitors, three which consumer large

In virtual consumer automotive, opportunities, including budding and signage addition, markets. there augmented gaming, smartwatch, and reality, are other lighting

we the beyond do begin is production OLED to mass substrate the OLED will has driven by enter by are based as Gen investing of with and low and X currently to forecast, two is premium Chongqing, This OLED segment expand combined in second the was phase As penetration X decline. largely operation. panel penetration of where first we XX% And been per research on fab Gen in OLED. We OLED up smartphones. approximately penetrated its that market. adoption have OLED Gen makers well panel BOEs market broadening And to three participating to When market XXXX. according to smartphone BOE half the capacity X total the of lines about But in Why fabs the poised reports, the further. expected XXXX, even is mid-range, its one-third of month. of in into panel more is end XXX,XXX year-end, capacity some fully starts has OLED a ramped, BOE smartphone production expected smartphone to widen pricing third setting the panel today? believe BOE. market makers So OLED to as smartphone by

XXXX. foldable shipments XX research fastest expected widely OLED units growth phone calling million are become BOE and about XX the in southeastern of in a foldable from for addition, increase to forecasts million is phone China. Foldable smartphones exciting OLED production growing units build in to In planned line With market panel has panel OLED burgeoning smartphone fourth to XXXX market. category. by the market the the Augmenting to

gain million Let's target, approximately units. additional last XXXX. TVs additional XX X.X what the XX,XXX start about to believes earning as traction XXXX strong the ship to addressable capacity penetration market of units TV the market? end that growth in its million LGD up drive of XXXX, are the week up in month at know X.X an LG TVs on an continue in China. OLED TV call to ramps year's to display from achievable significantly From OLED it forward, in is plates million Gen OLED last of X for standpoint, a market. expects OLED TV make OLED's Guangzhou, expected applications are with Looking TVs. market X% And OLED the per expected are

the also on incredibly While it shines large a a potential X% tremendous number, OLED curve low adoption light for TVs. is single-digit

the you substrate give Approximately a a to the display than greater the X% Just OLED penetration square smartphone from is from market is that of of area TV some penetration perspective. OLED what potential context market lot TV us. market standpoint XX% like material of has on players a inch area for

market be manufacturers. to monitors of materialize. to tablets OLED opportunity begun applications the the and charge, focus beginning adoption Samsung along champions are OLED This market. the we of nascent for stages IT a Moving laptops, and has Display emerging IT to see OLED The IT proliferation

to LCD As Electronics. OLED response good progress displays manufacturers, Asus, OLED ratios, the panels. laptop Samsung it is are more contrast offer aware HP where Lenovo, you immersive faster panels higher OLED times including and of and viewing global angles Dell, in is supplying wider many colors, market, and making Samsung

mere Based panel believe increasing market to of big OLED's is estimates expected OLED's early innings We in still growth means OLED IT market. the That number opportunity are into. are on an that secular of an an a a long-term market. makers enormous how market for opportunity. by And is research So year-end. in opportunity of OLED the an account IT it's broadening X% are the it that

medium X, next consumer OLED that applications. expand adoption product wave about emerging Gen even X.X OLED large makers small new With include new focus device an architectures, new of taking this and display As portfolio capacity of and Reports shape. and Gen roadmaps OLED area. their to potential from Gen are XX plans, expanding

are OLED as and leader our We fortifying fronts. on position multiple an innovator

structure experience knowhow drive new infrastructure new our years is and We We're our opportunities. pioneering customers, that OLED us designed our to targeting of These will keeping provide and UDC an at industry. while expanding to into are growing leveraging enable building continued new footprint, cost value forefront also XX effective the and to initiatives our materials further research, plus the technologies. of

all phosphorescent in RGB excellent landscape. and ongoing believe blue discovery applications our across a stack, and We at respect continue not we will including programs. design, to and phosphorescent system. folate the hosts further of materials, With plan emissive energy the new efficiency next our emissive deliver On where commercial phosphorescent reds, when development and greens, R&D new generation yellows the blue, development question commercial is higher and front, of the for core of blue to We progress for phosphorescent to make that is an enable which and consumer a high OLED if. performance delivery

we phosphorescent device the driving materials in through molecular the level the at world, OLED With innovation are largest new architectures. team new and

extensive process includes synthetic, our technicians. cohesive. full engineers Our with This expertise, of approach and chemistry to our materials portfolio and physicists, and coupled mechanistic our computational, is broadening both

and Kong, materials makers closely work generation we teams to their ambitious lifetime. work successful team Hong and the with Our in meeting in that specifications a our our changing cycle deliver we to of makers. Korea engineering panel have data we drive is our directly times. are industry and supplier provide relationships UDCs execution of next OLED performance meet multiple leading ultimate rapid product of ever key and developing of application It cycles We our located and material fulfill OLED localized portfolio. to customers support new centers year with with OLED every The consistent UDC the all long-term objectives, targets, and customers product And the leading customers invent choice commercialize And point, evolving to why is product for development part ever full the as efficiency the panel growing color performance industry. core strength. take customers while materials full

decades a our know-how is ability to us This high the state to has expertise. global in have principle introduce enabled cultivated continuously developmental accelerate a manufacturing, factor to we two customers. and Our our and our commercial cooperation collaboration, of with volume long-term our partnership of to bolstered partnership a art emitters Through best-in-class material. PPG material and phosphorescent

I with customers, would long-term our that like of to Microelectronics,. Tianma we Speaking agreements have extended license share material and commercial

advance expand this they or OLED We Chinese are and portfolio plants. our their pleased to continue strong partnership to presence maker, continue panel with leading OLED as

front, R&D the Now, of is are our fundamental along we one the unfolded, to working OLED programs moving on groundbreaking device architecture. technology plasma primary

times unfolded plasma the which to benefits industry lifetime we pave to increase estimate by that double path the will research, that new to has believe We believe potential in applications. are the still and the efficiency, While up XX for customers device significant. OLED in potential the we

production the we new in materials. of site a our customers future designed our production. yellow, will performing diversify within with the the capacity multiyear industry evolving the in of to for production retrofitting XX project It the next market for years. our first phosphorescent On phase years efficient, serve our highly double of requirements. green, PPG new OLED Shannon, emitters filed growing of the Ireland base expected front, all site at for midst red, is manufacturing partner facility emitter be our manufacturing and meet universal and of This demand to the The will our to five are and OLED high over production blue

printing, directly manufacturing red, gas substrate printing to been a manufacturing set dry materials jet or mask allows OLED stream we and onto small working blue green use organic or the have to novel front, print process a a vapor the molecule of without on On solids. vapor that OVJP need a manufacturers

without with highly low and patterning performance believe represents OLED platform OVJP We high a OVJP a device process enable represents next high platform. process performance, efficient, designs throughput, layers. to large high addition manufacturing mixed to cost In generation a pattern mask, area gray

building Valley of are subsystems platform. approximately manufacturing. in Jersey the is OVJP viability Our Ewing, and hand of in system development blocks Silicon commercialization XX hand OVJP the element equipment team The key for continuing to The New on technology in to OVJP a OVJP currently with for in the team people is design. roadmap. large path OVJP working team, teams prove advance critical development alpha which milestone the working the are Achieving equipment this advanced process for our area consists

growth. away. OVJP is launch years While term the Estimated multi-dimensional our a is revenue opportunity to long commercial multibillion dollar approach few of still of part

our For near advance further will term, our be a at UDC. has been innovation that force therefore and years, On believe primary focus strategic mid-term over success. robust over We and technology continues the initiatives old driving enabling materials long-term and turn leadership let customer our support primary XX and Sid. our call strengthen these to and to and that note, of success me

Sidney Rosenblatt

today. Thank million. for you, everyone XXXX quarter joining third thank was $XXX.X XXXX Steve. $XXX.X XXXX million and again, of call And quarter compared the million quarter second is Revenue for a to $XXX.X our third record is you

sales to $XX.X to flat from emitter were million of of in the the third the of material third sales and were XXXX, $XX.X the which third of million. the were million and of quarter to yellow and the quarter XXXX million, $XX.X of compared sales This quarter include in in XXXX. of compared $XX.X XXXX, $XX.X total sequentially second third Red of million quarter $XX.X quarter in million quarter emitter quarter our Our quarter emitters million XXXX, third $XX.X green sales XXXX material XXXX. compares is third XXXX. the in the Green second XXXX quarter in of of in the which in $XX.X million second

patterns we quarter-to-quarter. past, material As discussed in have the buying can vary

customers, device include variables Some production moving Since COVID-XX, mix, inventory as demand of schedules, variables material cycles, product us. a product chain for and levels, factors number contributing as ordering efficiency rates, also these they're supply capacity, our moving issues, production are recipes, the factors customer consumer ramp well patterns, for gains. customer and of loading

million. $XX.X in million in This the quarter quarter and royalty $XX.X to the XXXX. $XX.X license million quarter of XXXX and of compares Third were XXXX third fees second

XX%. million XXXX quarter of third $X.X of into translating were were XX% margins XXXX Third This margins a the of compares in of This million. XX%. and quarter into and sales quarter million compares of the of sales third $XX.X in $X $XX Cost quarter comparable gross $X.X translating quarter million an of for gross material and of of XX% material quarter $XX.X XXXX quarter in of margins Cost million the revenues of year-over-year million, compares margins third XX%. margin the gross second This were in gross XXXX. XXXX to XXXX $XX.X OLED to quarter second material gross in Adesis the million, XXXX. of overall and second to of the XX% in

For the material our the of nine was XX%. margin months XX% gross was our overall year, and first margin gross

the in noted quarter-to-quarter. have we gross past, can As margins vary

our overall gross approximately to year. for expect We the be XX% margins

compared $XX.X and year-over-year's quarter of Third XXXX cost million the excluding of to million. expense, million, $XX.X quarter's comparable sales operating $XX.X was last quarter

to quarters income investing the are margin in our third last quarter's to XXXX. million development, of year, We XX% Corporation, quarter XXXX first in to operating Operating including on quarter growth landscape. XX% the in our million to quarter XX% believe million. organic our the operating $XX.X $XX.X second of in fortify the XXXX in of We be of infrastructure range XX% compared year. And in Shannon was site, in was third XX%. $XX.X our was of the nine the including our that for and comparable margin for opportunities our XX% Operating the research operating of XXXX compared the new margin and electronics OVJP the of income people and are third in track year-over-year's to and we months for quarter

equivalents, net of diluted both income cash or comparison, or XXXX million million full-year XXXX Net $XXX share. share. and basis with a third ended and second quarter our rate XX% million, Third diluted $X.XX for $XX.X XX%. XXXX tax income quarter of XXXX the income In was approximately will We or per of We be quarter few per tax $X.XX quarter $XX.X was third estimated the per or points. the for was rate quarter diluted of share. the in take $XX.XX approximately cash give

Moving along to guidance.

in and licensing consumer revenues the $XXX and our to ecosystem shareholders. the of on $XXX capital of our to from million, While XXXX record I positive to ratio lastly, to will The million we're to material the the seeing board our royalty shortages, revenues of of electronics continue ballpark be to And impacts expect we X. expected paid pandemic, to to component December in return on expected $X.XX to a X.X be with of cash approved flow dividend, Steve. directors quarterly of XXXX which the turn of XX, a dividend XXXX. back business the December be continued XX as to will close our stockholders that, generation commitment call reflects to With range

Steven Abramson

Thanks, Sid.

XXXX, reflect we has knew but how disruption, resolve. continues we of the tapped to into profound global resiliency of how As one's also end resourcefulness, be take a on and the pandemic moment it to

decisive opportunity obstacles. spread seeds of of position a and we As a to steps At in to founding, path thank shareholders. the employees to this with a steadfast employees, those of culture world materials progress company, colleagues, up are delivering celebrates and build and inclusion. that, We work future market, in leader with successful on and to drive, have our continue around collaboration, the environment opportunities our emerge further to to seized and and overcoming accomplishments where a heart the stronger, corporation participating and diversity to across commitment XXX their approximately take of opportunity in global being nurturing been XX of employees, cultivating pandemic that OLED our OLED our locations for challenges we and ongoing dynamic leadership and and young elevating Q&A. fosters our ecosystem, and and and to Since and trove at in the journey the can and to build achieving constraints have for each to sustainable and long-term has I a of in the But taken our empowers customers for solving. our the and Universal of industry, every thrive company, UDC And forward an bolster inventiveness, customers, hard desire, our am cutting and industry. enable technologies our the heart UDC, of committed innovation, the and deep adapting even our like advance building superior ingenuity for operator, employees for that the our customers shaping, they communities. ecosystem, edge problem growth our culture our an start dedication, and We're proud a advancements. and let's this our OLED Display's to

Operator

ISI. [Operator you. Our Muse Thank proceed. Evercore Instructions] is C.J. question first from with Please

C.J. Muse

what third to what you off the roughly afternoon. I for like at here, half you're It sales Thank expected. Hi, first the we your look customer? taking were seeing wanted question. least against guess from there largest good of

is will curious, that highlighted to per red gross recover? of So that an impact and was an intro And start to you emitter. or material When there? inventory there green the digesting new XX-Q margins your

would please? to So hear color love there

Steven Abramson

C.J. Thanks,

on Customer our In quarter your purchasing reasons. can they ordering they customer. are in significant question largest terms purchase of the QX for had which except much that And in lumpy really a patterns pretty various even sales substantial their believe they're a for line customer is for expectations. we though BOE, with there's different third the the anything from amount And first XXXX year, of don't of sequentially them. In inventory. normal, order and lumpy, our inventory be lower,

C.J. Muse

to I Okay, the my back that's to, receivables. wanted follow-up unbilled I helpful. guess And as go then

sort you with changes in in amendment Now the last they down contractual came but, months, clients. of three disclose

headwind a you. cascading about any those be So could how you revenues is XXXX, there be and revenues, should walk to on I going 'XX? Thank what hoping in in side could exactly through, I that on changes guess, think positive whether we was and would there,

Steven Abramson

on a receivables, Particularly that welcome. sheet you're our that It on is item. essentially no really something unbilled impact Yes, balance has is revenues.

we have having customer. is that by revenues get into to but a agreement new do customers, We we entered with our when paid with deferred billing when the

It a Because to or it positive not a our negative is nothing headwind, neither question. a XXX, billing with do it. has terms is So recognition. it is this under really in of revenue

C.J. Muse

you. Thank

Steven Abramson

you, C.J. Thank

Operator

from is proceed. next Our with Please Deutsche Bank. question Sidney Ho

Sidney Ho

X.X. my close is that Great. the Thanks make question licensing material for third My will quarter first to to question. on ratio of taking sales the revenue

much how think Thanks. trying Just so we that full-year? a then forward is for understand should going we about ratio in And it to the why expect X.X than have lower I And the QX? follow-up.

Steven Abramson

you. Thank

For the vary ratio for quarter-to-quarter, really X.X to expect in it revenues depends the the mix. be And material, can range. the material still royalty year, license we we licensing upon X material royalty because the to customer

Sidney Ho

anything there Is it drops quarter to particular X.X? that this

Steven Abramson

No, be perfectly its really mix customer to it honest. is

Sidney Ho

maybe revenue per follow-up Can Okay, market question OLED you you per a Thanks. talk basis? per Whatever the can Are use? smartphones about opportunity as IT display. area or revenue metrics the adopting panel on more they TVs what the starts or area? like

Steven Abramson

Yes, and plates similar these are processed of think made. well, the more the And that the square processed, more are are it in of made for inches to materials is smartphones us what we I sell. obviously increase square glasses inches

than are us. a a side-by-side. capacity for little may it utilization, smartphones. comes And the any and plus that So on for increase new RGB be is factory us in is any they for But for different recipes IT

Sidney Ho

Great. Thank you.

Steven Abramson

Thank you.

Operator

Please question Sankar with proceed. is and next Company. Our Cowen from Krish

Krish Sankar

or question. titles directly. week, From supply are so area the I you out taking a them thanks Sid deliveries maybe figure LG in past, you But to long display component any September question. want the in you last that my the due winded seeing know, not said told to ask impact components to hi, I declined shipments issues. you do for impact Yes, this

lower think quarter, want sequentially range or imply tightness? you full-year to think on it to where of guidance figure $XXX be $XXX or Your could to Because up you're in to December million just could revenue? going be million. about that that? upper based out Do end So down in the end

Sidney Rosenblatt

the based I and when mean, about did stated let comfortable in together. their think recent our as number similar In terms you discussed for headwinds. all upon weeks of we February the impacted the that, question. put of for of the outlook million ecosystem And QX companies And was guidance the to shortages in there year, and that thank when guidance and revenue have based beginning upon it, -- for for we range that changed pandemic still the year, to possible I $XXX are in the mean, the that component we $XXX QX. everything are we there everything in a have as Well, with and year. occurred, million we're tried electronics

Krish Sankar

any give Can December, you in growth to color on how sequential about or think revenues?

Sidney Rosenblatt

fourth look you quarter, the and at we've Well, reiterated guidance. if the

said, and I half be we thought we up. half and talked As would second first half, second about

half of end If million, the you end half. then up of $XXX upper look over $XXX second it would about be look you at first half. at the the the low first XX% the from be if of And our up slightly would million, guidance

Krish Sankar

then Got follow-up, of increase iridium to inventory is a in the something it. just And all primarily quarter the on? or of purchase that going the in due quick

Sidney Rosenblatt

in we raw tried has the A, average pay the there at getting grown, so during that manage we the none. to it's will B, raw look we've but that had uninterrupted you And materials XX-Q, it, price iridium in past, were an as really never real and pandemic, the have for area. supply see we you because that If to trying issues have we have, about in it, materials we our that clearly talked

Krish Sankar

Thanks Sid.

Sidney Rosenblatt

Thank you.

Operator

and proceed. Our with next Jim Please from question is Ricchiuti Needham Company.

Jim Ricchiuti

Thank you afternoon. good and

with variability in customers, that true are among are other in essentially they revenues kind biggest customers and from large general, line China. too variability your in bit Korea, we're of seeing your a in it's your quarter-to-quarter Is whether the customer, mentioned customers your expectations. of you quite other the that tracking Just third question the on despite your customers, way that of

had year? has as trying is you thinking market of that seen the we've get the how a the the have a in to much with in line about way sense I'm changed? change as business to bit Or earlier dynamics been So things

Steven Abramson

Jim. Thanks,

think I we -- it, we fact look in what it the February. our guidance's at was exactly when that

to in overall, things lot line pretty with what much think we up. we in I quarter which the do they all the like overall quarter-to-quarter said bought And one just things the the for change, But ballpark went year, think more, we I with thought the are be. China, would first a in percentage customer are in the customers.

Jim Ricchiuti

but any some in applications for the there's that, are reports, you moved that too to I some guys it have of relates any And been changes there's tablets some are removed the customers that in of into and that know of of you component in are screens the some as far been from with the chips constraints terms you seeing removed gone out from of your signs chain? phones. of or food

Steven Abramson

lots companies pretty far really to as to we're be know specifically, are all of questions But We from honest, our of answer removed your customers it. issues know. with chip. having them reported and And do that, I don't have

Jim Ricchiuti

how But you're like in to newer should R&D relates in we some sounds It QX? expenses? R&D invest anything think either about makeup to a to QX, projects at your question, operating of going as and the to with working expense any of the be fairly of on. terms change it respect terms how of heavily Okay, there expense, looking continuing just last you're the is in in

Steven Abramson

Yes, up for talked the by R&D being XX%. year, we about expenses

year all We at gave expect be when our guidance. for the XX% to that we of XX% our expenses to

I think we're in that year. ballpark the for

to is the as are there Steve we blue up expenses OVJP and we stated. as R&D are going and mentioned, on nothing focusing So go

don't think than you've in QX I going there is in to QX. be different things So seen

Jim Ricchiuti

Okay, thank you.

Steven Abramson

Thank you, Jim.

Operator

[Operator Instructions].

Shannon with proceed. question Cross Our is next Research. Please from Cross

Shannon Cross

ahead was seeing to wondering line on you try Thank at on? going inflationary you're how what's in just you're to general, standpoint least inventory And you're offset doing Thank materials. perhaps or just from about to you. what able pressures what it, in stay an I with much. very

Steven Abramson

Yes, thanks, Shannon.

are we I to looking supply of obviously, costs. care think have about trying we chain our but uninterrupted an we always ways I mean, at that looking ensure and supply, at

And it. are talked so that's for into that see we've always And we about and obviously, Iridium, sources done. out looked you because And there. what the at go commodity the they multiple components have having can prices

years Iridium started So ago. we buying

So some price. good think I our we pretty time, inventory, tried impact the is we that and can it really inflation But we really to a the job because And be we believe I managing to of up. a higher bought the it. have that's I expect doing in so that's during have low don't future, I very have think inventory, a are whole don't that I say everything COGS going Like, price. case.

Shannon Cross

us when the in tonight. to starting you accounting? what has aggressive you've how TVs, have OLED terms growth for higher But your takes and Can down, see in some of in and the past, been Okay, pricing hoping then, the in of the versus thank had moves market, of had the we're curious, I'm market start benefit seen especially or to in with pretty I changes the TVs it you. or earnings sort when sizes. call this just somehow of discussed. especially if another general, And long we I come guess, you've remind apologize and given be frankly, I see prices numbers just we're some to

Steven Abramson

to is demand $X for talking TVs, talk This that million you. $X they're fabs about thank call TVs. is noted about and million, high-end. X million OLED being there their year, guided there on the Well, LG and Yeah, from two at strong they initially

made, goes are get the six or then it's their know whether itself, clearly, months or it's to when customers. either it which gets the three material said, you us, panel know, two a XX But in. panels other when LG our of months months exactly I For shipped probably don't in or if we lot

no but So gone has their up. capacity, factory utilization there new is

starts, substrate they're so XX us, next you where So then units they and would that's that be with year. can supposed XX,XXX add million at see to

Shannon Cross

thank Great, you.

Steven Abramson

Shannon. Thanks,

Operator

Our with [indiscernible] next comes Please Berenberg. from proceed. question

Unidentified Analyst

taking Thank you my what evening. M&A wondering, And for for was Thank can good for? question. most you capabilities popular those just that? asked Hi, I to customers enhancements have that the develop you you. are pursue or would need organically

Steven Abramson

the for you question. Thank

Our they customers -- efficiency our performance our lifetime ask our or they and for looking teams closely -- our R&D for material with to always what what work or they're want color. for

of works teams our all closely So with customers. our

that here. we So, do

that ones develop the are materials. the We

to market, of follow the will that -- the in lead leader facility. XX We development but are full the we continue work lead for and do years, we our all

Unidentified Analyst

Great, that. I appreciate thank you.

Steven Abramson

Thank you.

Operator

Oppenheimer. is with Our Martin question final Please proceed. from Yang

Martin Yang

thank for my taking Hi, you question.

I So that investments a some that recently, probably details? question impact Can saw financials? higher you valuation, we more new us round, regarding has at give does your maybe raised your accounting thought which digitalize a VC how the

Steven Abramson

of Sure, one when of And at the balance our we small investment. a investments investments. lenses. value look digit on sheet It's our

total Our investments $XX million are company. under in the

to needle So not right now perfectly be move the to honest. that's going

Martin Yang

question. that LG and have when -- growth? Got was was we BOE and really year-over-year question What maybe also my another China quarter this it. driving final I isolate, strong.

Steven Abramson

last the hear I your of sorry, I'm question. part didn't

Martin Yang

What do are the What year-over-year growth on was customers that about China? you LG? driving in think

Steven Abramson

I'm not hearing apologize first. sorry, I it for

at look sat LG think, you BOE got is and China, clearly, if I well it you've there.

the they're high-end. as talked So units, talking about about TVs, which million X we is

up and is and two in also Visionox. its see to is in customers Tianma includes ramping that BOE have China, which So facilities. facility China, you're And other going LG we growing

out we've talked years a it see is of activity coming that we lot China. over to there about couple there, the last So will of of continue and growth

Martin Yang

you much. Thank so

Steven Abramson

very much Thank you Martin.

Operator

Arete Nam-Hyung Research. have Kim Please from This We is question. with proceed. more one do

Nam-Hyung Kim

All of space, IT on in aggressively Mini right, thank for my their LED, big news one on Mini There are product. the guess taking I a question. you lot OEM especially of LED pushing

after So do OLED Mini OEM a to or you can out step see be that just LED Mini LED all compatible later. before middle

great, So any be thank thoughts end you. would your opinion or

Steven Abramson

Thank you, Nam.

meet their our and specifications. same get will on I think whether that materials customers are design not or asking the working we customers specifically materials recipes us to their what or

something materials we're they or that needs, sure it. design that meets we with needs is working meet to have if something is have it new our we think our to closely I it customers think that their make I sure make

Nam-Hyung Kim

at step OLED. traditional So middle of you you LCD LED end, kind so the that yes and think at think a is between the Mini

So you at LED, probably the that OLED Mini instead OEM adopt what is a of end, mean?

Steven Abramson

slightly I do backlight. in LEDs are CTO nothing as their as talked Mini well Mini LG's LEDs LCD earnings with and about And recently another on technology. LEDs just Mini think call are aware, that than LEDs this you're backlight they're improved more Mini quarter an noted

such, can and the superior the and as technologies prices. have leakage LCD that OLED quality flickering. as as Mini realize -- imitations As such limitations Therefore, and high displays are they same light LEDs to OLED are affordable

So, on bullish we're very OLED. obviously, LG, just like

Nam-Hyung Kim

Okay, thank you.

Steven Abramson

Nam. you, Thank

Operator

you will Sachs. a feature? from comes question to if Brian come next check if ask line Please in have we moment. with to Our please your Lee Goldman proceed. back Okay, live, new is question. you a your like Brian, you would

from Abrams Andrew question is with proceed. Please next SCMR. Our

Andrew Abrams

I material and could affect that little your your you Can particularly material, enhanced to of Can basically ago. on? talk same you've how prices? terms OLED panels your different based your customers gross on buying might increased color color out six seen on a ability display for were little other? months about base a or a average meaning of royalty one flexible direction if How that the on a the a And price are give changes get is bit material, any coming that little Iridium LG royalties a the second, you new pass a that but on they price, in cost not on base

Steven Abramson

Thanks, Andy.

our and have we've said those I into we that think built aware, contracts have pricing contracts. long-term all of you're stated As

So they greens, and an reds about new selling their and cumulative of different discounts. volume customers in not And and we the we we as they would can't materials, get one but have either when our that whether pricing do built prices that's go work in that started But when level way go up. down, were variations customers, issue. a one started we talked made we one contracts and contract so in it's them, we've we down at the that building because versus built have ordered,

we something that's that on. to so pass not have the And do ability

we talk really I what part, panel. a details about in talk when percentage royalties, can't ASP of Regarding do talk the about about is we second of royalties, of the our the

going down, percentage pricing because panel is less because goes go if goes So number. see your to a lower you're pricing up. volumes panel going based the upon to be normally But when down

Andrew Abrams

it. appreciate Got it, Thank okay. I you.

Steven Abramson

Thank you

Operator

Goldman again having proceed. difficulties, Brian technical Please Sachs. once with have we Lee We were

Brian Lee

first past this mix mix top I versus afternoon. being did team, see anything same to been to on you two speak sales but material just variation were here. for I versus a me just the talk licensing mix lot that us this Thanks sense you versus squeezing couple the these of shift last of royalty as quarter of you I have of in was already. what some mix of mix to some the customers a higher have But the driven quarters. I for royalty a reason asked basically might of the much guess one that your and had give materials know sales in the versus you had there, times quarter-to-quarter customers apologize that? Hey, as quarter, good but can percent

Steven Abramson

and I C on we customer what that that customer were customer quarter. and you B and are mean, have it down up impact does I the That's stayed correct. have in in the biggest was think A

Brian Lee

$XX seasonality And buying your hasn't then head revenue, well patterns? I the you this would is point. as fair fair this unique, is promise on. last this structurally Okay, thinking customers and it your a the year-end? you say been to materials revenue and That's real And you've I'll on year, seeing I of know there's in kind run customer seasonality would as here then or we enough. seasonality, of many does my materials every you There materials pass sort there environment look million this regards, year, Thanks. you in quarter be different on to Is high But you're into almost interesting in if rate your terms seasonality translate amount accustomed across side revenue. no this what $XX has been QX almost for anything decent changed, million guys, a seen industries. always one, of This anything at about year. of specifically, to an

Steven Abramson

holidays. difficult Yes, lumpy, to chain, it's one thank seasonality you, But therefore, and we and having. going as to in isn't that apologize a for pandemic is heard you're other you food from ecosystem, the the big consumer consumer question, we're hump electronics business impacted have have get something companies not in the is us. I've including that towards big it's because component in the and a going exactly shortages the everybody output But affect problems

So, as we I in can continue addition be in were going think going lumpiness. we're to variations talked normal to to which quarter-to-quarter sales, the to lumpy, about, we've see

Operator

next proceed. from question is Our question Krish follow-up Sankar. a Please

Krish Sankar

views you. thanks LED LED, Thank for Steven, the it kind asked opportunity. someone of just Micro wanted to and OLED. think want just not how But OLED Yes, on of Mini the recently I your Mini taking ask curious same you LED I'm ask, follow-up. question, but to QD a question.

Steven Abramson

that Yes, phone. now, I are of you're aware well has think stage. TV cell right their you'll LED early price like as Micro Samsung This tag reportedly $XXX,XXX. talked inch is see something about, And a very that their there's Micro XXX LEDs we've has

and into that pretty and have for a what when and it displays. they of large the opportunities the still if hear number much gets market market there's stuff into will they It's is it questions when small we will will market So very unanswered very and actually address. get

Operator

closing does for remarks. back session. Rosenblatt any This the would the I you. to conclude like Sid question-and-answer turn Thank to program additional or

Sidney Rosenblatt

have to and you for tonight want you just you your us. you all that time all any follow-ups, contact please if know thank can We

have you. a Thank everyone So good night.

Operator

This program. you. does conclude Thank today's

You lines disconnect may at this your time.

Universal Display (OLED) 5 Nov 212021 Q3 Earnings call transcript