OLED Investor Presentation
Forward-Looking Statements All statements in this document that are not historical, such as those relating to Universal Display Corporation’s technologies and potential applications of those technologies, the Company’s expected results as well as the growth of the OLED market and the Company’s opportunities in that market, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. You are cautioned not to place undue reliance on any forward-looking statements in this document, as they reflect Universal Display Corporation’s current views with respect to future events and are subject to risks and uncertainties that could cause actual results to differ materially from those contemplated. These risks and uncertainties are discussed in greater detail in Universal Display Corporation’s periodic reports on Form 10-K and Form 10-Q filed with the Securities and Exchange Commission, including, in particular, the section entitled “Risk Factors” in Universal Display Corporation’s annual report on Form 10-K for the year ended December 31, 2016. Universal Display Corporation disclaims any obligation to update any forward-looking statement contained in this document. 2
Who We Are OLED IP Critical Licensor & OLED Material Supplier Innovator & Enabler Fabless 4,500+ Global Proprietary PHOLEDs Patents * *4500+ Pending and Issued Patents Worldwide as of October 26, 2017 3
What is an OLED? 30-40nm An Organic Light Emitting Diode is a series of organic thin films between two conductors When electrical current is applied, bright light is emitted OLEDs can be used for displays and lighting OLEDs are not just thin and efficient - they can also be made flexible and transparent 4
Business Model OLED Innovation & Revenues Enabler Invention License Device & Patent & Architecture Licensing Royalty IP Fees Composition PHOLED Material of Matter IP Emitters Sales & Hosts 5
AMOLED Display Market Potential Mobile Growth Tablet /PC Growth TV Growth $60 Mobile TV Tablet / PC Other $54 $52.1 $47.9 $48 $41.3 $42 $36 $ billions $33.2 $30 $24.0 $24 $18 $15.8 $12.4 $12 $9.1 $6 174M* 257M* 391M* 683M* 430M* 572M* 768M* 821M* $0 2014 2015 2016 2017 2018 2019 2020 2021 *Unit Numbers are for mobile phones only Source: IHS OLED Display Market Tracker – Q3 2017 6
OLED Panel Area Demand Mobile Growth IT/Wearables Growth TV Growth 16 15.1 Mobile Phone OLED TV Wearables/Mobile PC Other AMOLED 14 12.6 millions of square meters 12 10.8 10 7.8 8 6 5.3 3.9 4 2.5 1.5 2 0 2014 2015 2016 2017 2018 2019 2020 2021 Source: IHS OLED Display Market Tracker – Q3 2017 7
Strong OLED Display Market Drivers • RED • Fewer • Improved image More Cost Effective Superior Aesthetics Phosphorescence manufacturing Lower Power Usage quality reduces power process steps • Thin and Light consumption by • Lower bill-of- • 180 degree viewing 25% materials angle • Add GREEN : 45% • No backlight • 2,000,000+: 1 cumulative required contrast ratio – reduction • No color filter TRUE BLACK • Add BLUE : 75% required • Real-time video cumulative • No liquid crystal speeds – excellent reduction required for 3D • Enabled by • Reduced driver • Self-emissive display PHOLEDs IC costs • Low UV output • Enables non-glass • Flexible substrates 8
New OLED Smartphones Google Apple Motorola Moto Samsung Pixel 2 XL Huawei Mate 10 Pro iPhone X Z2 Force Edition LG V30 Galaxy Note8 Hisense A2 vivo X20 Meizu Pro 7 Gionee M7 Oppo R11 OnePlus 5 Pro 9
More OLED Products Huawei Watch 2 LG - 65“ Wallpaper OLED TV Dell Alienware 13 (2017) Samsung Galaxy Book Lenovo ThinkPad X1 Yoga (OLED) Sony PlayStation VR Porsche Mission E Car Panasonic EZ1002 4K OLED TV LG Watch Style Apple Watch Galaxy Gear Series Oculus Rift 10
LCD vs. OLED TFT+OLED+Refiner Polarized Polarized Diffuser Film Film Sheet Cell TFT Backlight Unit Polarized Film Color Prism Filter Lower BOM (bill of materials) Better Performance, More Efficient Thinner and Flexible Form Factor Vivid Colors and Superior Contrast Ratio Image source: LG 11
Strong OLED Lighting Market Drivers • Thin and • Low drive • Wide range of Highly desirable color quality lightweight voltage CCT, high CRI Novel form factor & • Transparent possible environmentally friendly • Low operating Low Cost Potential temperatures, • Non-breakable, • Color tunable Energy-efficient & cool to touch Conformable, • Instant “ON” , Flexible, Foldable, • Long lifetime Dimmable Rollable without flicker • Easy to control • No glare, no • Scaling advantage noise • Roll to roll process • Low UV content Image source: LG Display 12
OLED Lighting Around the World Today PEW * *Now available @ 13
Innovation: Future Revenue Streams Ink Jet Barrier Encapsulation Nozzle Barrier Liquid Solution Organic Vapor Jet Encapsulation Printing Printing (OVJP) P2OLED 14
Future Growth: Flexible Unbreakable Thinner New Form Factors Lighter 15
Strong, Broad and Deep Patent Portfolio Lighting Flexible OLEDs Printable Phosphorescent OLEDs Manufacturing Processes & Equipment Device Architectures Phosphorescent OLEDs (PHOLEDs) Encapsulation Light Out- Coupling 16
Patents are Universal China Europe (I-249 / P-179) (I-554 / P-190) United States Japan South Korea (I-999 / P-432) (I-725 / P-184) (I-235 / P-354) Taiwan (I-250 / P-103) 3,033 patents issued (I) + 1,553 patents pending (P) For a total of 4,586 (I & P)* *as of October 26, 2017 17
Strategic Relationships with Blue Chip Partners Display Lighting 18
Historical Financial Performance Income Revenues ($ in millions) $198.9 $191.0 $191.0 $48.1 $45.5** $44.8** $146.6 $32.6* $83.2 $9.7 $61.3 $3.2 2011 2012 2013 2014 2015 2016 *adjusted net income; 2013 included $41.4M net benefit from release of income tax valuation allowances of $59.4M and deferred income tax expense of $17.9M; GAAP net income was $74.1M 2011 2012 2013 2014 2015 2016 **adjusted net income; excludes inventory write-down and its related Hosts $11.2 $6.0 $34.2 $41.3 $12.5 $1.4 impact on our effective tax rate Royalty & License $15.3 $31.7 $47.0 $63.2 $77.8 $96.1 see "Reconciliation of Non-GAAP Measures" for further discussion of these non-GAAP measures on slide 20 and our Form 10-K for the year ended Dec. Emitters $26.2 $38.4 $61.6 $85.6 $100.6 $97.9 31, 2016. 19
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