Universal Display Corp at Citi Global TMT Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Atif Malik - Citi - Analyst : Brian trying to kind of kick off of things. If you can give us the state of the union on the adoption of OLED, where do we stand in TVs, IT, smartphones? And also if you can touch on your full year outlook and how is the year so far panning out?

Question: Atif Malik - Citi - Analyst : Can you remind us the outlook for this year? And how is this full year sales track so far?

Question: Atif Malik - Citi - Analyst : All right. Just starting with the smartphones. I know it's the most penetrated segment out of the three markets. We saw the news that Apple is going to introduce all OLED phones next year, even on the iPhone SE. And everyone is excited about Apple intelligence and AI generally on smartphones and in AI, it does consume a lot of power. Do you see a strong case that the adoption of AI will accelerate the adoption of OLED in smartphones or not so much?

Question: Atif Malik - Citi - Analyst : Just kind of zoning on IT with the Apple launching its OLED-based iPad this year, we saw a big uptick in sales for them. Can you touch on the upcoming opportunities beyond the tablets? And how should we think about the level of penetration in IT in five years. And also, if you can touch on auto end market.

Question: Atif Malik - Citi - Analyst : And Brian, just curious, the adoption of OLED larger panels for tablets and autos, how is the kind of the cost scaling down when you move through larger panels. Is that a driver in terms of the adoption? Or is it more of the consumer appetite for better-looking screen and power management and those things. Like what's the driving force? Is the cost curve coming down for higher adoption.

Question: Atif Malik - Citi - Analyst : Let's talk on the topic of energy efficiency. Let's talk about Blue. And I feel like when we entered this year, there was definitely excitement around adoption of OLED in IT, like I've had and -- and he was excitement that we'll hear maybe Blue most present getting adopted this year. On your last earnings call, you kind of pushed it out a little bit into next year. Now there was an article in, I believe, times yesterday talking about one of your Korean customers making very good progress with it and he talked about maybe within a year to get into production. And I know you can't comment on your customers' plans. But can you just walk us through where -- first of all, what happened with the delay and then what are your latest expectations on kind of ramping production on Blue?

Question: Atif Malik - Citi - Analyst : And Brian, I ask you this always, but can you help remind us that kind of the content increase that you would see dollar content increase or some qualitative measure once Blue gets adopted. And the reason I ask that is I read the article and there was some mention that, that customer is mixing florescent with phosphorus, florescent for the lifetime and phosphorescent for efficiency. So I'm just kind of going through the scenarios in terms of like how meaningful of a content driver Blue will be for you guys once it gets in production. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 05, 2024 / 3:40PM, OLED.OQ - Universal Display Corp at Citi Global TMT Conference

Question: Atif Malik - Citi - Analyst : And also, if you can remind us, is Blue already designed into the licensing with these existing customers or it's not included or it will be layered on top of those.

Question: Atif Malik - Citi - Analyst : All right. Just on Blue, do you have any sense of what the design cycle of Blue will look like once it starts to get into production, are they more derivatives of blue that can be added on? Or is it just one go and then you're all set?

Question: Atif Malik - Citi - Analyst : And on the cost side, how would the cost structure look like for you guys? Do you have manufacturing capability lined up in precursors and all that stuff.

Question: Atif Malik - Citi - Analyst : And so on the margins, will Blue be kind of additive to the gross margin structure or just support the existing structure?

Question: Atif Malik - Citi - Analyst : And then from a value proposition, I know this is your customers' decision, are you expecting Blue to be adopted in smartphones and TVs and tablets all at the same time? Or you think there is a bigger pull for smartphones first.

Question: Atif Malik - Citi - Analyst : And one question I get asked is like how will we find out that Blue has been adopted? Like will you put out a press release? Or there will be some teardown of some phone that you will find out others will find out that now it has of phosphorescent it? Or do you expect your customers to advertise it that there's superior OLED screen using Blue? Like how do we find out?

Question: Atif Malik - Citi - Analyst : Okay. And just on this topic, I think it will be helpful to the audience, if you can kind of simplify for us the two different approaches RGB and YOLED and why would one customer adopt it and the other customer not do it? What are the kind of pros and cons?

Question: Atif Malik - Citi - Analyst : And then going back to the cost side, are you also planning to provide the host for the blue phosphorous or just the molecule itself. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 05, 2024 / 3:40PM, OLED.OQ - Universal Display Corp at Citi Global TMT Conference

Question: Atif Malik - Citi - Analyst : And is that what you did red and green in the past as well, like you -- it kind of helps accelerate adoption if you provide them some initial host and then they can move on to whatever they want to use. Is that -- is it similar? Or is it there something different about blue?

Question: Atif Malik - Citi - Analyst : Let me pause here and see if there are any questions in the audience. Unidentified Participant Just on revenue. You mentioned a lot of opportunities. It's been a bit lumpy. It's gone from low single digit to like 20%. So how should investors really think about growth moving forward considering the television, IT and all of the drivers that you spoke about. Some color on that will be pretty helpful.

Question: Atif Malik - Citi - Analyst : Brian, China is a big part of the LED market, both manufacturing as well as consumption. And we continue to hear about smaller private companies working on phosphorescent emitters. And can you give us a an update in terms of like your intelligence, like what's happening in China? Is there some sort of a risk from these kind of indigenous manufacturers.

Question: Atif Malik - Citi - Analyst : And one thing I kind of struggle with is like when I look at your materials growth, like what benchmark we used to look at the industry growth in OLED is it -- like what do you guys use like display search or like -- or some fab tracker? Like what -- how do you -- like on the consumable side, we have wafer starts. So if a company is top line is exceeding the wafer starts and they're outgrowing the market. So how should we gauge you versus some benchmark.

Question: Atif Malik - Citi - Analyst : All right. And then OVJP, can you give us an update, state of the union, where you stand, your partnerships, how how much R&D are you investing in this project? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 05, 2024 / 3:40PM, OLED.OQ - Universal Display Corp at Citi Global TMT Conference

Question: Atif Malik - Citi - Analyst : So this equipment will be inserted in the existing manufacturing of TVs? Or is this a kind of a brand-new manufacturing scheme.

Question: Atif Malik - Citi - Analyst : And do you have any evaluation units at your customers?

Question: Atif Malik - Citi - Analyst : All right. Just lastly on the balance sheet and capital allocation. Can you just talk about the use of cash. You have no debt and the capital allocation?

Question: Atif Malik - Citi - Analyst : Great. We're almost out of time and wrap it up here. Thank you, Brian, for coming to the Citi conference.