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‘Across the Board’ Impacts

Reduced OLED Orders Spark Universal Display to Cut 2022 Guidance

Universal Display shaved $25 million to $50 million off its May 5 revenue forecast for 2022, saying Thursday it now expects to finish the year with a top line of $600 million, plus or minus $10 million. The supplier of OLED technology and materials downgraded its guidance after customers abruptly began reducing their order forecasts “as we approached the summer,” it said.

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Macroeconomic uncertainties and inflationary pressures “are impacting consumer spending across the board,” said Chief Financial Officer Sidney Rosenblatt on a Q2 earnings call Thursday. When Universal downgraded its 2022 outlook, “we took into account our customer forecast, slowing demand for consumer electronics products and continued headwinds from the pandemic,” he said. Within the consumer tech ecosystem, “the uncertainty of the macro and rising inflationary pressures are really weighing on consumer spending and really affecting the demand side,” he said.

OLED materials buying patterns can vary quarter to quarter, said Rosenblatt, soon to retire as CFO after 26 years with the company. COVID-19 lockdown issues, plus consumer product demand cycles and industry inventory levels are “moving variables for our customers,” and so “they are also moving variables for us,” he said.

Though near-term headwinds are expected to continue weighing on the economy and affecting consumer spending, Universal’s “positive long-term momentum” continues, said CEO Steven Abramson. “All industry road maps continue to expand as the evolution of the OLED market continues to advance our way.”

Universal sees 2024 “shaping up to be a pivotal year” for the OLED industry, said Abramson. A “significant new wave” of Gen 6 and Gen 8.5 OLED panel capacity plans are “in the works,” he said. The company continues to make “excellent progress” in its development work on a commercial phosphorescent blue emissive OLED system, he said.

Universal continues to believe it’s on track “to meet preliminary target specs with our phosphorescent blue by year-end, which would enable the introduction of our all-phosphorescent RGB stack into the commercial market in 2024,” said Abramson. “We believe that the commercial introduction of our full-color emissive stack will unlock a vast array of opportunities for higher energy efficiency and higher performance across a broad range of OLED applications.”