A new report from DSCC sheds light on the production costs of Mini LED and OLED TV panels, and the results may surprise you.
The DSCC (Display Supply Chain Consultants) report contains some interesting tidbits about the disparity between the manufacturing of WOLED (white OLED) and Mini LEDs, where the premium OLED technology is actually cheaper to produce than Mini LED panels of the same size – least for now.
That’s somewhat against the wisdom given around OLED as an expensive panel technology, especially since TV makers that support both OLED and Mini LED – such as LG Electronics or Philips – sell Mini LED sets for much less than their OLED counterparts. So what’s going on here?
A number of factors play a role here. The data largely relates to LG Display, which is currently the only OLED TV panel manufacturer. LG Display now manufactures many more of its panels at its Guangzhou plant in China, where “lower depreciation, personnel, indirect and SG&A costs [Selling, general and administrative expense]“making the overall cost of panel production much lower than LG’s Korean factories – despite initial difficulties getting the production line up and running.
That basically means that lower employee wages and lower administrative costs save LG money, even if the cost of making the actual panel hasn’t changed significantly.
In any case, the cost of OLED panels has gradually declined over time as LG has learned to ramp up mass production and refined the technology, no doubt reducing the number of broken / unusable panels during manufacture (something that was a thorny problem for OLED TV makers earlier in the lifetime of the technology).
That combination of factors has contributed to OLED panels being briefly cheaper to manufacture than their Mini LED (LCD) counterparts, used in LG’s QNED (LCD) range and so many new Samsung TVs.
Competition from Mini LED
Mini LED is a newer technology, one that TCL has been using for a number of years, but which Philips, Samsung and LG have only started embracing this year.
As a fast-growing technology – one that centers around a large number of backlit LEDs to precisely control brightness on the screen – there is inevitably an early cost as these manufacturers first begin to scale up the technology.
The final price of a television set, of course, also includes many things other than the panel. That’s how Samsung’s flagships can use Mini LED along with high-spec processing, bezel-less screens, and an advanced OTS + audio system, and cost significantly more than LG’s more mid-spec Mini LED displays.
However, this imbalance in production costs will change. The DSCC report predicts that the positions of OLED and Mini LED will reverse soon, with the latter technology falling in price significantly faster than OLED.
DSCC estimates that a 65-inch OLED panel would cost around $ 520 (about £ 370 / AU $ 660) to manufacture by 2021, with a Mini LED panel of the same size costing nearly $ 560 in total. The picture is different, though: both examples will cost around $ 440 in 2024 and Mini LED will gain a head start in 2025 – just over $ 400 for a 65-inch panel, compared to around $ 420 for OLED.
Price is falling
Much of the talk about OLED TVs today is affordability: how fast prices are (or not falling), what manufacturers are compromising to cut costs, and what budget OLEDs are already on the market.
The DSCC report outlines a positive, albeit gradual improvement on this front over the coming years. The production cost of a 65-inch OLED panel from LG Display should drop by about 20% over the next five years to just $ 400.
Of course, that doesn’t mean we’re seeing a 20% drop in OLED TV prices – these numbers are for the panel only and not the case, speakers, processors, stands, shipping, marketing, or otherwise associated with running a flat panel to an available television set.
But it does show that OLED televisions are only going to get cheaper in the long run, which is what they need to do to fend off competition from competing Mini LED sets. As this new LCD backlight technology gains traction and drops in price, it could further challenge the dominance of OLED.
Through OLED info