Kodak, Sanyo to close OLED venture

Eastman Kodak and Sanyo Electric will close their organic light emitting diode display manufacturing joint venture in Japan, the two companies said Tuesday.

SK Display was established in Japan in 2001 on the back of a joint research and development project that began in 1999. Sanyo owns 66% of the company and Kodak owns the remaining 34%. The venture began manufacturing OLED displays in 2003 but has not managed to become a major player in the market.

Under a deal worked out between the two companies, Sanyo will first buy Kodak’s stake in the venture then shut it down. The price Sanyo will pay for the stake has yet to be worked out, a spokesman said.

OLED displays are an emerging technology. The OLED pixels feature an organic material that emits its own light so no backlight is needed. That means the display panels consume less power and can be made thinner than competing LCD screens. OLEDs are also suitable for moving images and offer good color reproduction.

Small commercial OLED displays produced by companies including SK Display have already found their way into devices such as cell phones and digital still cameras. Manufacturers are still researching technology that will enable the production of larger screens and some companies are talking about the possibility of OLED-based televisions.

SK Display has a small fraction of the global market for OLED displays, according to figures from NPD Group’s DisplaySearch.

During the third quarter of 2005, global OLED shipments totaled 16.7 million, a rise of 144% against the same period a year earlier, according to the market research company. However, total shipments of active-matrix OLEDs, which is the type produced by SK Display, Sony and AU Optronics, totaled just 50,000 units, DisplaySearch said.

In revenue terms, the market leader is Samsung SDI, which shipped $37.1 million worth of OLEDs during the quarter, according to DisplaySearch estimates. Samsung SDI was followed by RiTdisplay with $26.8 million, Pioneer with $17.9 million, Univision Technology with $15 million and TDK with $7.6 million. The entire OLED market was worth $130.9 million in the quarter, said DisplaySearch.

The move comes as part of Sanyo’s overall corporate restructuring plan, which is pushing the company to focus on core businesses and cut others.

On Tuesday, Sanyo announced quarterly earnings for the October to December 2005 period. It said net sales were ¥611.5 billion ($5.2 billion as of Dec. 31, the last day of the period being reported), down 1.5% on the same period last year, and net income was a profit of ¥6.2 billion vs. a loss of ¥17.6 billion a year earlier.