Improvements in production yields of AMOLED mobile phone panels are closing the manufacturing cost gap between AMOLED and TFT LCD smartphone displays. Manufacturing costs for AMOLED panels are currently 10-20% higher than for TFT LCD displays; however, manufacturing costs for AMOLED mobile phone displays are expected fall below costs for LCD mobile phone displays within two years due to rapid improvement in AMOLED panel production yields.
Early on, AMOLED panels were expected to cost less than LCD panels, because they do not require backlighting. Instead, production challenges kept AMOLED yields low, so costs remained higher than for equivalent LCDs. AMOLED became a high-end product, due to its high color gamut, good contrast, and slimness. Recent production yield improvements are expected to help AMOLED penetrate more broadly into smartphone panels.
Until recently there have been few breakthroughs in the production of AMOLED displays, and the OLED industry seemed to be facing hard times. If AMOLED costs fall below LCDs, as expected, it would lead to more opportunities for the OLED display industry, greater competition with LCD, and more choices for consumers.
For example, currently there is a 16% cost gap between 5″ AMOLED and LCD 1920 × 1080 mobile phone panels, but AMOLED panel costs are expected to fall below LCD panel costs when AMOLED production yields reach 90%, which is within sight. With cost reductions for OLED materials, the yield rate can be lower and still have a similar effect.