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Universal Display Corporation announced its financial results for the third quarter of 2011 in the past week. This is the first release of financial information that Universal Display Corporation has made since it signed a new agreement with Samsung Mobile Display. Dolcera presents an analysis of the announcement and the events surrounding it.

Universal Display Corporation reports its revenues in two segments: commercial revenue and developmental revenue. Commercial revenue relates to the incorporation of the company’s OLED technologies and materials into its customers’ commercial products, and includes commercial chemical revenue, royalty and license revenues, and commercialization assistance revenue. Developmental revenue related to OLED technology and material development and evaluation activities for which the company is paid, and includes contract research revenue, development chemicalrevenue and technology development revenue. Here, we mainly look at the commercial revenue of Universal Display Corporation.

Commercial revenue is reported in three parts: commercial chemical revenue, royalty revenue and license fees. In the results of third quarter of 2011, the revenue from royalty and license fees have been reported together. Unfortunately, since the past two years, Universal Display Corporation has been reporting only the change in revenues in each of these categories instead of the actual revenue figures. Some financial results announcements in the past have failed to provide quarterly information at all, instead providing information for the past 9 months or the past year as a whole.

Using historical financial results, we have reconstructed the commercial revenue earned by Universal Display Corporation in the three categories. The following table shows the quarterly commercial revenue by category in the past 5 years:

Source: Company filings

As expected, the revenues have shown a huge jump in the last quarter. Much of this can be attributed to the new agreement between Universal Display Corporation and Samsung Mobile Display. This agreement runs till 2017.  For the first time, Universal Display Corporation has explicitly mentioned the exact revenue it has received from Samsung Mobile Display from license fees. The company has received $3,246,315 from Samsung Mobile Display under its license agreement so far.

Apart from licensing fees, the agreement also increases the commercial chemical sales of Universal Display Corporation. Under the 2005 agreement, the company was the supplier of red PHOLED materials to Samsung Display Corporation. With the August 2011 agreement, Universal Display Corporation now supplies both red and green PHOLED materials to Samsung Display Corporation. Prior to August, Samsung Display Corporation sourced green PHOLED materials from Duksan, a Korea based company. There are no competing manufacturers of red and green PHOLED materials. The new agreement effectively doubles the per unit chemical sales of Universal Display Corporation.

In the following section we calculate the revenue that Universal Display Corporation receives from each display unit sold. All calculations have been performed using publically available data.

In the third quarter of 2010, 413.20 million mobile phone display units were shipped amounting to total revenue of $ 3,380 million. AMOLED display panels had a revenue share of 10.7% of the mobile display market. This results in the AMOLED mobile display panel revenue to be $ 361.66 million. The volume of AMOLED displays was 13.5 million units. In the AMOLED display market, Samsung Mobile Display had a market share of 98.3%. Thus, Samsung Mobile Display sold 13.27 million AMOLED display units and revenue from AMOLED displays units was $ 355.51 million. (Source: DisplaySearch)

Universal Display Corporation announces in all its filings that Samsung Mobile Display is the chief source for all of its commercial revenue. We consider that Samsung Mobile Display is solely responsible for all of Universal Display Corporation’s commercial revenue. The assumption is reasonable given that the period under study is the third quarter of 2010 when Samsung Mobile Display was the only major customer of Universal Display Corporation.

Universal Display Corporation’s royalty revenue for the fourth quarter of 2010 was $ 1,503,647 million. The royalty revenue is considered from the fourth quarter as royalty is paid by Samsung Mobile Display for goods sold in the previous quarter. As calculated earlier, Samsung Mobile Display’s third quarter 2010 revenue from sale of AMOLED display panels was $ 361.66 million. The royalty rate for the agreement between Universal Display Corporation and Samsung Mobile Display thus works out to be 0.423%.

The total number of AMOLED display units sold by Samsung Mobile Display in the third quarter of 2010 was 13.27 million. The royalty received by Universal Display Corporation for these units was $ 1,503,647 million. Thus, the royalty revenue per unit is $0.1133. The chemical sales revenue of Universal Display Corporation for the third quarter of 2010 was $1,642,600. Thus, the chemical sales revenue per unit is $0.1238. The key assumption in this case that the PHOLED material inventory levels of Samsung Mobile Display did not significantly change during the period.

The total revenue that Universal Display Corporation received from sale of each mobile display unit is $0.2371. It is to be noted that the period considered in this analysis is the third quarter of 2010 which is prior to the signing of the new agreement between Universal Display Corporation and Samsung Mobile Display. The August 2011 agreement doubles the chemical sales revenue per unit of AMOLED display panel sold for Universal Display Corporation. Thus, Universal Display Corporation receives $0.3609 for each AMOLED mobile display sold.

The above scrutiny only covers a part of an exhaustive industry analysis. For a detailed analysis of the subject matter, write to us at: info@dolcera.com

Written by: Kunal Krishna

Kunal is a Senior Business Research Analyst at Dolcera with expertise in cleantech and emerging technologies

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Introduction:

Wireless sensor network (WSN) is a wireless network consisting of spatially distributed autonomous devices using sensors to cooperatively monitor physical or environmental conditions, such as temperature, sound, vibration, pressure, motion or pollutants, at different locations.

Unique characteristics of a WSN include:

•     Limited power they can harvest or store
•     Ability to withstand harsh environmental conditions
•     Ability to cope with node failures
•     Mobility of nodes
•     Dynamic network topology
•     Communication failures
•     Heterogeneity of nodes
•     Large scale of deployment
•     Unattended operation

Efficient power management

Several techniques are used for efficient power management

• Dynamic power management (DPM): Dynamic power management (DPM) is an effective tool in reducing system power consumption without significantly degrading performance. The basic idea is to shut down devices when not needed and wake them up when necessary.
• Data-Driven Power Management (DDPM): A new power management framework called Data-Driven Power Management (DDPM) is used as the infrastructure for integrating various energy efficient techniques, such as approximate querying and sleep scheduling.
• Efficient Sleep Scheduling based on Application Timing (ESSAT): Another technique Efficient Sleep Scheduling based on Application Timing (ESSAT), a novel power management scheme that aggressively exploits the timing semantics of wireless sensor network applications. ESSAT protocols have several distinguishing features. First, they can save significant energy with minimal delay penalties. Second, they do not maintain TDMA schedules or communication backbones; as such, they are highly efficient and suitable for resource constrained sensor platforms.

Low power operation on batteries :

Networks of sensors are widely used for monitoring and control applications. In a communication network, deployment of wires is expensive and causes hassles during normal operations and maintenance. This led to the development of wireless networks. Wireless sensor networks not only eliminate the need for wires, but also open many new application domains. Reliability and low-power consumption are the two important factors, which determine the performance of a WSN. Though messages are exchanged without any data cables in a WSN, power cables are required for powering sensor devices. Power is fed to the WSN via mains supply. But, this concept is now replaced by batteries and energy harvesting devices. If batteries are used, replacement and maintenance issues cause concern. Power management techniques (low-power/ultralow-power WSNs) seem to be the viable solutions in improving the lifetime of the batteries and various low-power technologies are being developed in this spectrum. Power/energy harvesting is an emerging technology, which eliminates the need for batteries.

Energy Harvesting technologies :

Energy harvesting technologies are required for autonomous sensor networks for which using a power source from a fixed utility or manual battery recharging is infeasible. An energy harvesting device (e.g., a solar cell) converts different forms of environmental energy into electricity to be supplied to a sensor node. However, since it can produce energy only at a limited rate, energy saving mechanisms play an important role to reduce energy consumption in a sensor node.
Energy harvesting technologies such as piezoelectric, thermoelectric and others will have potential applications in wireless sensor networks and low-power devices.

Products:

The Wireless sensor networks have Microcontroller kits which controls all motes in the network and especially for low power harvesting in the network we have different kind of batteries and energy harvesting and converting modules like thermal energy harvesters and solar energy harvesters

• NI WSN-3212(4-Channel, 24-Bit, Programmable Thermocouple Input Node)
• EnerChip EH CBC5300 Energy Harvesting Module
• Solar Energy Harvesting Wireless Demo Kit
• JenNet Protocol Stack
• JN5148 Wireless Microcontroller - ZigBee PRO Platform
• JN5139 Wireless Modules (IEEE802.15.4 and ZigBee)
• PhyNet Wireless Sensor Networking Platform
• Arch Rock Energy Optimizer
• GreenPeak Emerald GP500C Communications Controller chip
• Micropelt Thermogenerator
• SmartMesh
• Wireless Sensor Hub (Battery)
• Powercast Powerharvester module

Market research:

World Market projection:

*Wireless Sensors and Transmitters market is growing worldwide. The below figures indicates there is a drastic change in last few years and these number increases in future.

*Last 5 Years: Market growth is huge in the last 5 years increased from 180 million dollars in 2005 to 380 million dollars approximately (200 % growth).

*Future: Market forecasts reaches to 1800 million dollars by 2012 approximately (45% growth)

Global Market projection:

*The below graph shows wireless sensors and Transmitters market in different regions North America, Europe, Asia pacific, and other countries of world.

*Major market growth in North America, Europe and Asia Pacific.

*Last 5 Years: In North America the market increased from 20 million dollars to 160 million dollars approximately, in Europe the market increased from 15 million dollars to 130 million dollars approximately, in Asia-Pacific the market increased from 8 million dollars to 120 million dollars approximately.

*Future: Market forecast reaches to 600 million dollars in North America, 500 million dollars in Europe and 400 million dollars in Asia pacific approximately.

Contributing Authors

Rajeshwari, Haritha, Garg and Sateesh

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