After Dai-Nippon Printing DNP, the world's leading OLED FMM (fine metal mask) producer, announced plans to invest 20 billion yen (about 1 billion yuan) to expand its Japanese plant capacity to produce large-size FMM suitable for the current mainstream 8th generation OLED panel, Poongwon Precision, a South Korean material manufacturer, recently announced that it has completed the introduction and installation of manufacturing equipment for the eighth generation OLED FMM, which is expected to be mass-produced. This is the first time Poongwon Precision has manufactured FMM for the eighth generation OLED, having previously focused on commercialising the sixth generation. How will the competition between Japanese and Korean material manufacturers in the 8th-generation OLED FMM sector affect the industry? Can Japan's preconceived companies still ride out the dust?
Trying to break through DNP's technical blockade
The FMM is an essential component in the manufacturing of OLED panels. Its role is to help OLED organic materials to form display pixels through tens of thousands of 20μm to 30μm pores deposited on the OLED panel.
Liu Tun, deputy general manager of the Internet of Things Industry Research Center of CCID Consulting, said in an interview with the reporter of China Electronics News that because FMM is thinner than paper, so in the process of production and use, it is prone to the effect of gravity, pressure, magnetic force and other stresses and creep, the larger the production size, the more obvious problems such as bending and sagging. It can be imagined that its technical difficulty is high, the difficulty of mass production.
Therefore, there is no precedent for the industry to jump from the mass-produced sixth generation OLED FMM to the eighth generation OLED FMM and realize commercialization, which will bring great challenges to the technology and materials.
With the gradual development of OLED TVS and displays, the trend of superposing large screens and display panel enterprises including Samsung Display, LGD, Peking Oriental, Shentianma, etc. are investing more and more in the production line of the 8th generation and above OLED. All these will determine the size of mask plate is destined to be larger. The market for high precision, large size of the ultrafine metal mask version of the FMM demand will also increase significantly.
According to the data of Swarm Intelligence Consulting, with the improvement of the yield of FMM manufacturers and the release of new capacity, the global supply of FMM is expected to be nearly 600,000 pieces by 2025. However, due to panel manufacturers' OLED capacity expansion, FMM material supply will be tight, the global FMM supply and demand ratio gap is expected to reach up to 31 percent.
According to Lu Jin, executive deputy secretary general of China Electronic Materials Industry Association, from the current FMM supply pattern, Japan and South Korea are competing, but the strength of Japan DNP is too strong, occupying 90 percent of the market share, has a monopoly advantage.
Moreover, according to industry sources, DNP has signed a monopoly contract with Samsung to sell its highest-technology products to the South Korean company, leaving other panel makers to buy lower-quality products. However, panel makers, including Samsung Display, have been forced to sign exclusivity agreements when purchasing the NDP's FMM materials.
In the huge market prospect of FMM, Korean manufacturers are trying to break through DNP technology blockade. For example, Aurum Materials is developing a "single cell" FMM for the 8.5-generation market and has attracted about 20 billion won (105.6 million won) of investment; WOS, which advocates electroforming electroplating, is currently developing the 8.5-generation FMM; Phil Optics, another developer of electroplating FMMS, has started evaluating sixth-generation FMMS with panel manufacturers in China; APS Holdings is challenging the laser method FMM. Poongwon Precision, on the other hand, is pushing for mass production of FMM for eighth generation OLED as well as the production line for sixth generation OLED FMM. According to Korean media outlet thelec, Poongwon Precision has invested 16 billion won (about 84.48 million won) in production infrastructure, including an eighth-generation exposure machine, etching machine, photomask, aligner, coating machine, and inspection machine, since August last year, and plans to build a production line this year.
Yoo Myung-hoon, CEO of Poongwon Precision, said, We will quickly enter the market with superior products and price competitiveness compared to our competitors. We will increase sales and profitability by providing FMM products."
Commercialisation before DNP is unlikely
However, Poongwon Precision's progress has not been so smooth. Not only has there been no deal to supply Samsung's display 6th generation OLED FMM, but it is also facing its biggest hurdle -- the increasing difficulty of sourcing Invar.
The Invar material is a key raw material for high-quality FMM and is mainly supplied by Hitachi Metals, a Japanese material company. Hitachi Metal has cooperated with DNP for many years, and Hitachi Metal exclusively supplies DNP with Invar materials for FMM production. Last year, DNP and Hitachi Metal once again entered into a new strategic cooperation. For the next 7 years, Hitachi Metal Invar materials below 50μm will only be supplied to DNP. Other FMM manufacturers will not be able to obtain Hitachi Metal Invar materials below 50μm.
However, Poongwon Precision plans to diversify its supply chain to improve product quality and volume in preparation for mass production, for example by increasing the number of existing invar material suppliers and rolling companies from two to five, company officials said. invar Materials, in particular, has diversified its supply chain by sourcing from several countries and regions, including Japan and Europe. They also developed INVAR film jointly with Hyundai BNGSTEEL, which means they have a stable supply system of materials and components, and have secured intellectual property rights through the first use of FMM technology and multiple source patents.
"Invar materials from Korea, Germany and Europe are not stable, which is not conducive to improving the yield of FMM. In addition, Samsung has a high demand for products, and related materials need to be of the highest standard. Currently, only Hitachi Metal can produce ultra-thin Invar materials (10μm~20μm thick) for advanced OLED panels, and the materials are likely to be supplied only by DNP. Sui Xin, president of Shandong Aolai Electronics, a Chinese material manufacturer, told China Electronics News that Samsung had rejected FMM products from other suppliers by telling the South Korean material industry that "professional matters should be left to professional people." Without Samsung's support, Poongwon Precision probably would not have surpassed DNP in commercializing the 8th-generation OLED FMM.
On November 10, DNP announced on its website that it plans to invest 20 billion yen (about 980 million yuan) to expand its Kurozaki plant in Kitakyushu, Fukuoka Prefecture, Japan. The new production line is expected to more than triple the production capacity of large-size FMM, which is suitable for the current mainstream eighth generation OLED panels, starting in the first half of 2024.
But as early as two years ago, DNP had tested its eight-generation products, Sui said. "This proves that DNP has been laying out the eight-generation OLED FMM product line for at least three years." He emphasized that DNP has been researching and developing metal mask since 2001, and has not only independently researched and developed lithography and etching technology, but also a number of patents and core technologies in metal mask plate and its raw materials and manufacturing process. Its technology research and development strength and stable supply of high quality, high Precision products are far more than Poongwon Precision. As a result, DNP looks more likely to be able to mass-produce an 8-generation OLED FMM.
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