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On Tuesday, 03 June 2025, Universal Display Corporation (NASDAQ:OLED) participated in the Bank of America Global Technology Conference 2025. The company discussed its strategic growth initiatives, highlighting both opportunities and challenges in the rapidly evolving display technology market. The focus was on expanding OLED technology into new sectors, driven by AI and 5G advancements, while maintaining strong financial health.
Key Takeaways
- Universal Display is leveraging AI and 5G to drive demand for energy-efficient OLED displays.
- The company is expanding OLED applications into IT and automotive sectors with significant investments in Gen 8.6 capacity.
- Revenue streams are bolstered by long-term agreements with major panel makers and a focus on high-margin material sales and licensing.
- UDC’s blue phosphorescent emitter technology is poised for future growth, though commercialization timing remains uncertain.
- The company maintains a robust capital allocation strategy, including dividends and a $100 million share buyback program.
Industry Overview and Growth Catalysts
Universal Display is capitalizing on the growing demand for energy-efficient displays, driven by AI and 5G technologies. Currently, OLED penetration in smartphones is at 51%, while IT and TV sectors are at 4%. The company is focusing on medium-sized markets, with panel makers investing $20 billion in Gen 8.6 capacity for IT displays. Samsung and BOE have plans to open new facilities in 2026. In the automotive sector, OLED displays offer design flexibility and energy efficiency, especially appealing for electric vehicles.
Revenue and Agreements
Universal Display has secured long-term agreements with major panel makers such as Samsung, LG Display, and BOE. These agreements, typically spanning five years, involve both material sales and licensing. The revenue model includes a material to royalty licensing ratio of 1.4 to 1. While blue emitters present a significant revenue opportunity, their commercialization timeline is still pending.
Blue Phosphorescent Emitter Technology
LG Display recently showcased a hybrid tandem phosphorescent blue OLED panel, enhancing energy efficiency by 15%. Universal Display is positioned as a key player in high-efficiency blue technology, offering both emitters and hosts for blue emissive systems.
Supply Chain and Tariffs
As a fabless company, Universal Display partners with PPG for manufacturing, with operations in the US and Ireland. Approximately half of their materials are sourced from each location. While tariffs have not significantly impacted this year, there was a temporary surge in orders in April due to anticipated retaliatory tariffs.
Financial Performance and Capital Allocation
Universal Display maintains a high-margin profile, with gross margin guidance of 76% to 77% and operating margin guidance of 35% to 40%. The company has consistently grown its dividend since 2017 and recently announced a $100 million share buyback program.
M&A Activity
Through UDC Ventures, Universal Display is exploring both display and non-display investment opportunities to support organic and inorganic growth.
For more detailed insights, readers are encouraged to refer to the full transcript of the conference call.
Full transcript - Bank of America Global Technology Conference 2025:
Simon, Moderator, Bank of America: I’m gonna moderate this session with Doris Liu, IR Head of Universal Display Corp, one of the most important OLED supply chain companies. Again, we’re to have mainly for the Q and A session. Okay, over to you, Darice. Yeah.
Doris Liu, IR Head, Universal Display Corp: Well, thank you, Simon. And thank you, Bank of America for inviting us to your conference. You may have noticed I am not Brian Millard. Our CFO, unfortunately, due to unforeseen circumstances was unable to attend. He does send his regrets, but I am happy to answer all questions.
Before I make my remarks, I should just give a quick safe harbor statement. I may make forward looking statements. Actual results may differ, so we ask everybody to review our SEC documents before making any investments. So from there Great.
Simon, Moderator, Bank of America: There is. Before we get started, just in case, would you introduce yourself or when did you start the UDC and what you are currently doing? Okay. Yeah.
Doris Liu, IR Head, Universal Display Corp: So I started with Universal Display Corporation about twelve years ago, actually. I head up communications, including investor relations. It has been a journey. I started the company when we were our green phosphorus emitter was just adopted by Samsung for the very first time. Back then, the top three OEMs for OLED displays were Samsung Electronics, Nokia and Blackberry.
So things have changed a little bit since then.
Simon, Moderator, Bank of America: Wow, Blackberry.
Doris Liu, IR Head, Universal Display Corp: Blackberry is one of the early adopters of OLED displays.
Simon, Moderator, Bank of America: That’s great. So that’s the history, but we should look at the long term trend for us. So people are talking about AI data center. Of course, there’s some people talking about display technology. Mhmm.
So what could be the long term growth catalyst for UDC?
Doris Liu, IR Head, Universal Display Corp: I think the overall picture for displays and AI really is the added functionality and performance to consumer electronic products. And what that then necessitates, which is energy efficiency. When you add more performance, more functionality, whether it’s five g, whether it’s AI, you need more efficiency because those added benefits consumes more power. And so you need efficiency elsewhere. And one of the things we’ve been doing for now thirty years is continuously inventing, developing new materials that are much more energy efficient.
And so an energy efficient display is key for more functionality and more performance if you want your battery life to last as long as your older products.
Simon, Moderator, Bank of America: Okay. Then these days a lot of data’s getting more trained and then the chip makers focusing on the influencing. Then we need a lot of contents to be seen through the display. But we still see lots of the LCD panels. So how come the OLED can replace LCD and why OLED can be more energy efficient today?
Doris Liu, IR Head, Universal Display Corp: So when you look at the display market, there are three large consumer electronic segments that display makers, whether it’s LCD or OLED makers, all target. It is smartphones, IT, and TVs. Within the smartphone market, we are at 51% penetration rate at the end of twenty twenty four. What? 4% within IT and about 4% within TVs.
Display makers, just like you saw within the LCD cycle, have a tendency to focus on a certain size initially then move on to the next size. In the LCD crystal cycle, you saw them go from small to medium to large. We are essentially following those steps. At 51% penetration rate of smartphones, the next stage in where you’re seeing a new multiyear CapEx cycle really begin to form is for the medium sized market for IT and to some degree automotive. And so from there, you’re starting to see more panel makers for folks who attended Computex or Mobile World Congress.
You saw all more and more OLED displays being showcased. I was at SAT Display Week two and a half weeks ago. You it was more and more IT displays and, actually, the most automotive OLED displays I’ve seen in my twelve plus years are going to Display Week. So the medium sized market clearly is a focus for panel makers. And with the new fabs are starting to come online slated beginning next year with Samsung’s gen 8.6 that’s slated to come online q two of twenty twenty six.
BOE is slated for q four of twenty twenty six. Visionox has not yet announced a timeline, but based on their groundbreaking that started in August of twenty twenty four, most are estimating probably end of twenty twenty seven, early ’20 ’20 ’8. That all of that all of that new capacity, which totals about $20,000,000,000 in investments, is all for the medium sized market. And we believe that those plans are being formed because of what the OEM roadmaps are entailing for OLED adoption.
Simon, Moderator, Bank of America: Yeah. That’s a great point. Lots of the tablets and laptops still based on the LCD. Yes. But the panel makers, they are investing a lot for the 8.6 gs for new OLED capacity.
That capacity will be used for the larger volume of the OLED panel production from 2020
Doris Liu, IR Head, Universal Display Corp: 06/26. You’ll start seeing Samsung will open up the very first gen 8.6 OLED IT facility q two of twenty twenty six followed by b o in q four of twenty twenty six. Yep. Visionox will follow after that. There is a lot of chatter that the other panel makers are also looking into plans for IT CapEx.
Simon, Moderator, Bank of America: Okay. That’s a great point. So here we go. So maybe we can say it’s three different revenue sources for the UDC, universal display regarding the panel makers new capacity. So number one, any quick recap or color on the license agreement, IP royalty revenue generation and then the material sales regarding the new fab.
Doris Liu, IR Head, Universal Display Corp: So when we we have long term agreements with our top customers, Samsung, LG Display, BOE, Tiamat, Visionox, and China Star. Those long term agreements are actually two agreements. It is a materials agreement or commercial materials agreement as well as a license agreement. So those agreements, a number of them we have publicly announced around five years long. So those agreements for the materials agreement, it is we provide for right now, red and green pricing through the term of the agreement.
No one currently has blue pricing, which I’m sure is one of the questions you have later on. The license side for the right to use our IP in one’s OLED device, we negotiate each agreement differently because each customer is at a different stage with their plans for OLED capacity. Either they pay us fixed license fees, royalties, or a hybrid of the two. The hybrid of the two is probably the most popular. And so that is how we generate our main revenue lines.
For this year, we’ve guided for the material to royalty licensing ratio to be 1.4 to one. So material revenues will continue to be the dominant revenue stream, especially when Blue comes into play. Because Blue, we believe, will be a significant new material revenue opportunity.
Simon, Moderator, Bank of America: Yes. But the management has been talking about the blue opportunities for over the past two years,
Doris Liu, IR Head, Universal Display Corp: but still current revenue. Like ten years, but yes.
Simon, Moderator, Bank of America: Okay. So when do you expect that the blue can be the great contributor to the growth or revenue enhancement?
Doris Liu, IR Head, Universal Display Corp: It’s a good question. So I think we blue has clearly been a question, especially since LG Display’s announcement. So the questions have increased since then. For folks who don’t know, on May 1, the morning of our earnings call, LG Display announced that they were showcasing an SA display week, the a blue phosphorescent panel, and that they were the first ones to verify commercial performance level of a blue phosphorescent panel in a mass production line. And so I was actually at SA display week two and a half weeks ago, and what they showcased was a 13 inch tablet size OLED panel, which was your typical tandem OLED next to a hybrid tandem phosphorescent blue panel.
And the images were great. Same images so you can compare and contrast. The big difference was they had an instrument next to each one showcasing the energy efficiency difference, and you saw that the phosphorus and blue hybrid panel was more efficient than the typical panel. LG Display has noted they expect to see a 15% increase in energy efficiency with their hybrid tandem phosphorescent blue panel.
Simon, Moderator, Bank of America: That’s a great and very great footprint to see the blue commercialization that they got.
Doris Liu, IR Head, Universal Display Corp: It was great for LG Display to announce that they’ve been able to verify the commercial performance level. Now it’s really up to them and the OEMs. I think it’s a little bit hard for us to say when the commercialization will happen. Unlike semiconductor companies who work directly with the OEMs, we’re a one step removed. We work with the panel makers who then work with the OEMs.
So right now it is with the panel makers and the OEMs on their discussions on where, for what product with who and etcetera.
Simon, Moderator, Bank of America: Yeah. Maybe we can continue the blue theme discussion. How about the competitive landscape? Because some Korean panel makers can try internal blue color development, material development, why not Japanese fluorescent material guys also can do some of their own phosphorescent blue. So what’s your view?
You don’t see any meaningful competition in the blue color area, very UTC specific area?
Doris Liu, IR Head, Universal Display Corp: We think all roads to high efficiency blue go through us. Mhmm. Where where, you know, there’s there are companies out there who are, you know, working on phosphorus and emitters. For phosphorus for blue, we believe all roads to high efficiency blue go through us. And so whether it is a hybrid tandem approach, a PSF approach, a single stock approach, we believe phosphor we believe the road to phosphorus and blue goes through us.
Simon, Moderator, Bank of America: What could could be the technology barrier for the existing the phosphorescent blue material suppliers? Why they cannot upgrade their current production capacity or technology for the you know, phosphorescent from the fluorescent?
Doris Liu, IR Head, Universal Display Corp: So I would just wanna make sure we’re on the same page. So adopting phosphorescent blue doesn’t mean any significant new CapEx. The tool set’s still the same. Vacuum thermal evaporation because you’re still using small molecule materials, whether it’s a fluorescent small molecule material or a phosphorescent small molecule material. You don’t have to purchase a whole new equipment set for it.
Just like when our phosphorescent green was adopted in 2013, replacing the fluorescent green. There is you still use a vacuum thermal evaporation tool or VTE tool. So there’s no significant you’re gonna have to tweak it. Obviously, you have new recipes, new mass sets that come into play, But the adoption of phosphorescent blue is not a significant CapEx factor.
Simon, Moderator, Bank of America: Yeah. Maybe a little bit different angle regarding the blue. Some Asian material companies that they are working on the blue, but maybe different like host area or HTA versus your top end. Would you recap why the materials or functions for blue different maybe you this versus some other supply chain companies.
Doris Liu, IR Head, Universal Display Corp: Okay. So an OLED stack is multiple layers. You’re talking at least 11 to 13 plus different layers within the OLED stack. The heart of the OLED stack is the emissive layer. That’s where the colors come from, red, green, and blue.
So within the emissive stack and we can go into the other stacks in just a second. Within the heart of the stack, within the emissive stack, you have what you call emitters or dopants and host. The analogy that we like to use to describe how you can describe both of them is how do you make a glass of chocolate milk? You have a glass of white milk. That’s a high volume commodity portion of the equation.
And then you have the chocolate syrup. You only need a couple drops of it, but it’s the key ingredient to making your end product. That’s equivalent to the dopant or the emitter. So we provide emitters. That is our main material business of providing red emitters, green emitters.
And then for blue, we plan to present the option of purchasing both the emitter and the host. Because whenever we invent emitters, we always invent corresponding hosts to create an emissive system to spec out our emitter. So but there are other players. Again, it is more commodity oriented, the host. So there are players out there who are our partners, who work with us that are developing blue host and the other layers, whether it’s transport layers, injection layers, and things of that sort.
Those are the other layers that surround the emissive layer. We do not play in those layers, but there are other players within the market. Yeah.
Simon, Moderator, Bank of America: Yeah. Great. Obviously, people talking about some China U. S. Tension or tariff for U.
S. Exports control to China. So number one, would you recap your material, pardon me, the green and red, how to manage the global supply chain from Europe, The US and Asia?
Doris Liu, IR Head, Universal Display Corp: So just a quick backdrop. So we are a fabless company. Our manufacturing partner per of twenty five years is PPG. Actually, we celebrate twenty five years this year with them. We invent and develop everything in house.
PPG manufacturers for us. They manufacture both The US and now in Shannon, Ireland. We announced back in 2021 that we were opening up a third manufacturing site, in Shannon, Ireland. The first two are in The US. That started mass production in July of twenty twenty two, and we’ve been making and shipping materials from Shannon, Ireland to all of our customers in Korea and China.
Now not all of the materials are made in Shannon, Ireland. Right now, if you look at the overall business, probably it’s fifty fifty. 50 percent are made and shipped from The US. Fifty Percent are made and shipped from Shannon, Ireland. But we do have a lot of room to grow within Shannon, Ireland.
So if there’s a need for us to expand our facility there, we can do so and actually are doing so.
Simon, Moderator, Bank of America: Great. So at least the investors, no need to worry about any China heavy reliance on the local China’s materials or metals or rare earths.
Doris Liu, IR Head, Universal Display Corp: No. Where earth isn’t that doesn’t come into play for us. We’re a global company. We have a global infrastructure. We’re able to make and ship within The US as well as outside The US and Europe.
Simon, Moderator, Bank of America: Yeah. And then the obviously, people usually ask The US tariff impact on technology product. So any direct to indirect impact of The US tariff?
Doris Liu, IR Head, Universal Display Corp: So there’s some direct impact. We get raw materials from all over the world. Some of it does come from China. It’s not the dominant source of our raw materials, but we are a global company, so we have a global supply chain. It’s not very significant, at least not this year.
And with tariffs being reset, so far things are okay. In terms of the indirect impact, as we noted on our May 1 conference call, we did see some stockpiling occur in the April. As you may recall, there was with the tariffs being implemented in retaliatory tariffs being stated by China. Our customers basically ordered quite a bit of materials in the April before the retaliatory tariffs came into effect. And so as a result, we did see a surge in orders because of that.
But since then, ordering patterns have come back to the normal pace. And also we’ve seen the tariff situation reset a little bit.
Simon, Moderator, Bank of America: Yeah.
Doris Liu, IR Head, Universal Display Corp: So things are, as we noted on our conference call, we see the year in line with what we expected, which is why we reaffirmed our guidance.
Simon, Moderator, Bank of America: Yeah. That’s the point. Second quarter, usually the low season for the smartphone supply chain. And then even other IT product, usually second quarter not strong. So how do you assess the current your second quarter business still in line with a seasonal weakening trend or a little bit above the seasonal trend?
Doris Liu, IR Head, Universal Display Corp: So I think it’s a little bit different for us, right? Because our customers are the panel makers. They it’s not a one to one meeting. They’re gonna make a product that’s gonna come into the market tomorrow. Right?
So it really depends on their fab operational plans. Their utilization rates remain high, then they’re continuing to buy at the same pace. If they decrease or increase, that then impacts their purchasing from us. So it isn’t quite one to one with the end markets. Overall, for the year, we’re still looking at 640,000,000 to $700,000,000.
And we will say as we noted on the call that q two in April, we did have a very strong month. But for the quarter, it’s pretty much coming in line, maybe a little bit better than expected.
Simon, Moderator, Bank of America: Okay. Yeah. Some investors really expect a foldable phone, particularly for The US phone makers. So do you believe that can be the great catalyst for UDC, the foldable phone? People will get excited.
I think
Doris Liu, IR Head, Universal Display Corp: there’s a lot of chatter with foldables, especially as it’s rumored that certain OEMs will be adopting foldables for the first time. Foldables from a direct standpoint for us is great because it’s more square inches. Mhmm. So more screens means more materials. And from a personal standpoint, foldables are great.
Right? Two in one products, portable products, and it’s something that you start to see a few not just Samsung, but you’ve seen Opel, Vivo, Xiaomi, and others introducing foldable products. At SAD Display Week, we saw trifolds. We saw rollables. We saw scrollables.
So I think foreign factor will be an ongoing trend within consumer electronics. And as more OEMs adopted, I think demand will also increase.
Simon, Moderator, Bank of America: Yeah. Looking at the another product category like public area because last year, strict expectations are very high. But toward the end twenty twenty four, sentiment a little bit muted. So what’s your view on the very high end tablet, which will be based on more and more OLED rather than LCD? Do you still believe the OLED demand for the tablet will be continuously strong or so so?
Doris Liu, IR Head, Universal Display Corp: I think OLED adoption within the IT landscape including for tablets, laptops and monitors will continue to grow. I think that’s also part of the reason why these Gen eight point six facilities are being constructed is to meet the growing demand for IT.
Simon, Moderator, Bank of America: Yeah.
Doris Liu, IR Head, Universal Display Corp: It will take some time just like it did with smartphones, but there are definitely a number of OEMs looking to expand their portfolio of OLEDs within their IT product line. Yes. Obviously, the San Francisco, Waymo getting popular. Have you tried?
Simon, Moderator, Bank of America: I already tried yesterday. That was very exciting. No driver, but Waymo really works right here. But I saw the very large screen, obviously OLED panel. So what do you see the overall OLED demand from the auto industry?
Doris Liu, IR Head, Universal Display Corp: The automotive industry is very interesting. We talked about within consumer electronics, the three largest end markets that display makers target smartphones, IT, and TVs because of the size of number of units. Automotive is interesting because there’s about 90,000,000 cars sold a year, but the number of displays within it is a multiple of that. Right? We talk about, you know, if you look at the full dashboard, for example, Mercedes flagship EV product, the EQS, they market that as a 55, 50 six inch hyperscreen.
That’s actually three different OLED displays. You have opportunities within side view of yours, our rear view mirrors, passenger seats. And so the number of display opportunities within our car is actually multiple. You’re seeing I mentioned to you the gen 8.6 for medium size. IT is definitely a primary target, but automotive is also an area that folks are looking at, especially EV makers.
You know, with e there’s for two reasons it’s interesting for EV makers. One, an overall statement in terms of our car is not a box. If you can make a display on plastic and curve it to the design of a car, that is much more preferable. The second factor is energy and efficiency and EVs go hand in hand, and OLED is a key part of that. And so you’ve seen a number of makers, whether it’s Mercedes EQS, the MINI Cooper EV product, or some of the Chinese EV makers from BYD subsidiaries.
It’s adopting OLED for EV. It is something that is growing in interest.
Simon, Moderator, Bank of America: That’s a great area. One more application area. Guess what? TV. Sometimes I do see very large size of the LCD TV, very cheap, and also even the micro LED TV.
So how to the OEMs can promote to the OLED TV, beating the LCD or micro LED TV?
Doris Liu, IR Head, Universal Display Corp: I think with it. So TVs, when you look at OLED TV, everybody says it’s a great TV. And so it is OLEDs without a doubt with from consumer electronics has noted as the best TV for multiple years in a row. Right now, TV penetration for OLEDs is probably about 4%. Yep.
It’s really more for the premium segment. Market research firms do have that segment growing, but at a at a slower rate. I think because panel makers are right now focused on the medium size, I think eventually they’re going to move on to the large size, but I think right now the focus is medium size.
Simon, Moderator, Bank of America: Yes. Yeah. All right. We discussed all the details for the industry. So how about if we discuss more company specific things?
So number one, when we look at the panel makers, their margins very low except the one company Samsung is still showing very good margin. But your company margins even better than the semiconductor sector average, I guess. So what’s the magic thing we’re creating? And how long can company can sustain such a high margin profile?
Doris Liu, IR Head, Universal Display Corp: So our guidance for this year for gross margins is 76% to 77% with operating margin guidance of 35% to 40%. We have strong margins. We continue to expect to have strong margins going forward. Part of it has to do with the licensing business, but also part of it has to do that we continue to deliver very state of the art materials for our customers. You know, this isn’t just a catalog business where I have one red and one green.
You know, we’re continuously working with our customers hand in hand to invent and develop new materials for them and next gen materials for them. And so that is part of the working relationship we have with them. And at the end of the day, even though our margin profile is high, we are a small portion of the build materials. Most analysts estimate that our total red and green emitter content per smartphone is about $0.10 to $0.20 And so we add a lot of value for what we are within the build materials.
Simon, Moderator, Bank of America: Again, you don’t worry about any cheaper materials coming from Asia or China. When you look at the for example, EV batteries or some even display panel, lots of the product available in China at very low price. But the Europe materials cannot be replaced by Chinese materials.
Doris Liu, IR Head, Universal Display Corp: So I will say that there are always as the OLED industry grows, as I mentioned when I started, the industry was very small. We’re now at over $50,000,000,000 in the OLED market. You’re going to have more players wanting to get into the market. For us, our we expect to continue to be a leader in the industry or continue to develop new materials and next generation materials as well as next generation technologies. And so our focus is to continue to be a leader.
And with that leadership and maintaining our strong relationships with our customers, that has been what we’ve been doing for thirty years and we plan to continue to do
Simon, Moderator, Bank of America: with that. Yeah. Great. Track record. So high margin and the timeline growth with OLED industry growth, obviously, you will have lots of free cash flow.
So would you recap your maybe net cash position and then how you’re going to return the lots of cash to the shareholders?
Doris Liu, IR Head, Universal Display Corp: So we do believe in returning cash to shareholders. We instituted a dividend program back in 2017. We have grown that dividend every year since we instituted the program. We plan to continue growing that dividend as we grow. And then on our May 1 conference call, we also announced a hundred million dollar buyback program.
So that buyback program will be used as an opportunistic tool from the management company. And it is something that if the opportunity arises, the company will purchase stock back.
Simon, Moderator, Bank of America: Yeah. How about the is almost the last question. If you still owns a lot of cash and here The U. S, we do see many startup companies or some AI related. So maybe two follow-up question regarding the M and A.
To enhance your business opportunity in the OLED area, maybe about the inorganic growth or M and A activities. And then based on your great know how resources and partnership with Samsung, LG or Chinese companies, how about the other areas, some AI related to M and A, non display related, any consideration? Thank you.
Doris Liu, IR Head, Universal Display Corp: So we a couple of a few years ago, we formed UDC Ventures, which is our corporate venture arm. We have made multiple investments. Some of them are display oriented. Some of them are non oriented. We haven’t publicly announced all the different investments, but we are looking at different opportunities where we can grow both organically, inorganically.
The inorganic side is something that UDC Ventures looks at in terms of opportunities for us. But obviously, the focus is also organically through next gen materials as well as with blue and new technologies.
Simon, Moderator, Bank of America: Excellent. So everything sounds so great. Thank you very much, Darius. And hopefully Brian can recover quickly. Thank you so much.
Thank you, Saif. We end this session. Thank you guys. Thank you. Thank you very much.
Yeah. We covered everything. Thank you so much. Yeah. Oh, sure.
Yeah. Yeah. Yeah. Yeah. Thank you.
Yeah. Oh, okay.
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