‘Dynamic shifts in market strategies’ see Universal Display post 2Q loss
The 2015 net loss reflected a $33.0m write-down of inventory, primarily of an existing host material and associated work-in-process, resulting from a customer’s faster-than-expected reduction in demand for this material.
"The consumer electronics and lighting markets are moving more and more in the direction of OLEDs," said Sidney Rosenblatt, Executive Vice President and Chief Financial Officer of Universal Display. "During the first half of this year, we saw new 4K OLED TVs from LG, new flagship smartphones from Samsung, including the curved Galaxy S6 edge, and multiple new smartwatches. The accelerating number of new OEMs adopting OLED technology, new OLED products being introduced and new OLED proofs of concepts being showcased illustrates the growing proliferation of OLEDs on a global level. We believe that these activities not only bolster the OLED industry’s momentum, but are driving increasing investments in OLED capacity.”
Rosenblatt continued, "During the quarter, dynamic shifts in market strategies resulted in numerous new product introductions that utilized our new red and green emitters. At the same time, these shifts also negatively impacted demand for established products that used our existing host material, which led a customer to significantly reduce its forecast for this host material. As a result, we have written-down relevant excess finished goods and work-in-process inventory. Looking forward, we anticipate a stronger second half of the year."
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