Applied Market Intelligence Mobile Displays - Market and Technology Trends Vinita Jakhanwal Principal Analyst

iSuppli Corporation – 2 Copyright  iSuppli Corporation. All Worldwide Rights Reserved. Confidential – Patents Pending Overview  Displays are a significant part of the device BOM  Average display costs 15% to 20% of BOM  If we add touch cost, BOM becomes larger  A mix of display technologies continue to be used  Specific display requirements determine display technology  Market segment, regions, OS etc.  Specially important when integration with touch is involved  Supplier landscape is changing  Shift in regional presence – capacity, price, customers  Emerging dominance of the ODM  Touch is crucial for next phase of revenue growth  Many different approaches  Many nodes in supply chain  Consolidation will be the trend

iSuppli Corporation – 3 Copyright  iSuppli Corporation. All Worldwide Rights Reserved. Confidential – Patents Pending Small/Medium TFT LCD Shipment  Large Market for small displays  Growing Market for consumer devices  Investment in larger generation fab has freed capacity for SMD displays  Price declines

iSuppli Corporation – 4 Copyright  iSuppli Corporation. All Worldwide Rights Reserved. Confidential – Patents Pending Mobile Handset Display Market  Mobile Display industry does ok in 2009  Seasonality of 1Q is not so pronounced in 2010  Smartphone market continues to pull demand  a-Si TFT LCD will be the dominant display technology  Other technologies will coexist to support different regions, segments

iSuppli Corporation – 5 Copyright  iSuppli Corporation. All Worldwide Rights Reserved. Confidential – Patents Pending AMOLED Update  SMDs special support to Samsung Electronics – size, touch tech  SMD plans to add new larger gen fab likely to be Gen 5.5  Gen 8 line decision likely by 2012  AMOLED prices around 1.2x equivalent LTPS panel for wVGA  AUO and TPO likely to start production in TPO may gain because of relationship with HTC

iSuppli Corporation – 6 Copyright  iSuppli Corporation. All Worldwide Rights Reserved. Confidential – Patents Pending Mobile Handset Display Market by Size  Mainstream display size is still 2.x-inches  Smartphones are using larger than 3-inch displays  Smartphones still a limited portion of the total handset market

iSuppli Corporation – 7 Copyright  iSuppli Corporation. All Worldwide Rights Reserved. Confidential – Patents Pending Smartphone Market  Smartphone market is growing rapidly at a CAGR of 22%  Still a small portion of the total handset market  Smartphones are mainly using wQVGA, wVGA, hVGA and VGA pixel formats  Nexus 800x480, Motorola Droid 854x480

iSuppli Corporation – 8 Copyright  iSuppli Corporation. All Worldwide Rights Reserved. Confidential – Patents Pending Small/Medium TFT LCD Shipment – Taiwan  Taiwan accounted for 48% of total mobile display TFT LCD panel shipment in 2009  Most of the panel shipments are made to Chinese gray/clone market segment

iSuppli Corporation – 9 Copyright  iSuppli Corporation. All Worldwide Rights Reserved. Confidential – Patents Pending Average Value of Displays purchased Handset OEM, 3Q09

iSuppli Corporation – 10 Copyright  iSuppli Corporation. All Worldwide Rights Reserved. Confidential – Patents Pending Ebook Market

iSuppli Corporation – 11 Copyright  iSuppli Corporation. All Worldwide Rights Reserved. Confidential – Patents Pending TFT LCD area Supply  Japanese losing capacity  Closing older generation fabs  Mergers and acquisitions  TMD wants to convert Singapore fab for SMD production  Inability to raise investment to do so  Sold to AUO

iSuppli Corporation – 12 Copyright  iSuppli Corporation. All Worldwide Rights Reserved. Confidential – Patents Pending TFT LCD area Supply – Gen 4 Area capacity  2 Gen 1 fabs in operation, 13 Gen 2 fabs (5 in use), 9 Gen 3 (6 in use), 6 Gen 4  Japan - 50% of area capacity comes from smaller than Gen 4 fabs  Gen 4 percentage is increasing because older gen fabs are being closed  Total area capacity is decreasing  Japanese share in Gen 4 fab area capacity is decreasing as Taiwan and China expand capacity for SMD Gen 4 Area capacity by Region Japan Capacity by Fab Gen

iSuppli Corporation – 13 Copyright  iSuppli Corporation. All Worldwide Rights Reserved. Confidential – Patents Pending Mobile Touch  Main Touch technologies for Mobile  Resistive  Capacitive  In-cell/ On-cell touch  Other – Haptics, IR, Active digitizer  Touch Technology Issues  Within LCD there are differences in LCD drive technologies  TN LCD, VA LCD, IPS LCD, AFFS LCD  LCD vs AMOLED  Projective capacitive sensitivity to signal noise for LCDs –It has to be very finely tuned to eliminate the noise and fine tune the signal to noise ratio. While this is achievable it makes it more difficult when you want to add something such as a digitizer to the device components. Each additional source of signal noise has to be taken into account and worked around.  AMOLED overcomes this issue as there is no LC material that needs to align for the drive  AMOLED on-cell touch is faster to the market than LCD on-cell –AMOLED innovatively uses the encapsulation glass as the touch glass surface –No color filter layer improvers transmittance  Taiwan Suppliers are leaders for mobile touch  Capacitive suppliers using old LCD fabs to make ITO coated touch panels  Resistive touch for mobile – Japan, Taiwan, popular in Asia  In-cell/On-cell touch in mostly coming out of Taiwan

iSuppli Corporation – 14 Copyright  iSuppli Corporation. All Worldwide Rights Reserved. Confidential – Patents Pending Differentiation Will Be Key  Need new approach to win…  Green LCD  Innovation –Product design –Manufacturing –Cost management  Product Differentiation – Thin form factor –Low Power –Integrated touch screen  Collaboration

iSuppli Corporation – 15 Copyright  iSuppli Corporation. All Worldwide Rights Reserved. Confidential – Patents Pending Small/Medium Display Service  Small/Medium Displays Market Tracker (Quarterly)  Small/Medium Supply Demand Tracker (Quarterly)  Small/Medium Monthly Price Tracker (Monthly)  Displays/Mobile Handset Market Tracker (Quarterly)  Detailed look at the mobile handset display market  All technologies – OLED, EPD, LCD  Finer size, pixel format and color segmentation  OLED Market Tracker – (Bi-annual)