Universal Display Corp at Needham Growth Conference Transcript

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

Question: Jim Ricchiuti - Needham & Company Inc. - Analyst : Why don't we maybe touch a little bit on '24 as much as we can as we look at the year. And I should note, obviously, that UDC's full-year numbers won't be released until later next month. But from an industry perspective, how would you characterize 2024 just from the standpoint of some notable developments in the industry?

Question: Jim Ricchiuti - Needham & Company Inc. - Analyst : Good. That's a good overview, and maybe we can dig into some of that. Yeah, I think the question comes up occasionally from investors trying to understand where we are in terms of price parity, OLED versus LCD. And when we talk LCD, we should be talking about the premium segment of the market. But can you give us a sense as to where that is today?

Question: Jim Ricchiuti - Needham & Company Inc. - Analyst : And when we think about that increased penetration, to what extent is the capacity increases that we're seeing in places, not just some in Korea, but also certainly in China, driving that -- going to drive some of that increased penetration of the market in the handset side?

Question: Jim Ricchiuti - Needham & Company Inc. - Analyst : And before we go into some of the more emerging areas, including IT, I wanted to -- and you touched on TVs, and that's been an area that's been frankly a little bit disappointing for the industry. And you noted that we did see at least the projections in '24 being an up year. I don't know what the data exactly looks like, but it looks like just under $7 million. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 15, 2025 / 2:30PM, OLED.OQ - Universal Display Corp at Needham Growth Conference OLED TVs, what -- so the question, I guess, around, it's still clearly an important market, just given the amount of material used -- emitter material used on an OLED TV versus a handset. But talk to us about what has happened in the market that gives you the confidence that this is going to be more than just a niche product.

Question: Jim Ricchiuti - Needham & Company Inc. - Analyst : Can you talk to the impact of the QD OLED technology coming in and Samsung bringing that product to market?

Question: Jim Ricchiuti - Needham & Company Inc. - Analyst : Can you say whether the economics differ much, whether it's a white OLED versus quantum dot OLED? For you, do you say?

Question: Jim Ricchiuti - Needham & Company Inc. - Analyst : Right. But there is clearly a revenue stream on the licensing and royalty side.

Question: Jim Ricchiuti - Needham & Company Inc. - Analyst : Obviously, we're going to talk about [blues] because that's a big question that investors have. But before we do that, why don't we just touch a little bit on as it relates to some of the changes that you've made in pursuing the TV market. And earlier last year, you talked about what you were doing with OVJP and moving that development work from Silicon Valley to Asia. Talk a little bit about that and what drove that decision and how we should think about the printing aspect as you pursue that aspect of the TV market.

Question: Jim Ricchiuti - Needham & Company Inc. - Analyst : Good. Let's turn to IT, an important validation, as you pointed out, from Apple transitioning the iPad to OLED screens. One of the issues, obviously, though, has been industry-wide tablet sales in general have been, I think, slower than expected in 2024. How's the company viewing the opportunity? Not just in the tablet market, but one of the areas I think that caught some people by surprise was the increased interest in OLED displays going into laptops and monitors, mainly for gaming applications. And maybe you could talk to the broader IT opportunity. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 15, 2025 / 2:30PM, OLED.OQ - Universal Display Corp at Needham Growth Conference

Question: Jim Ricchiuti - Needham & Company Inc. - Analyst : Was there anything at CES that was notable in terms of what were shown?

Question: Jim Ricchiuti - Needham & Company Inc. - Analyst : Okay. The other application that has come up over the past one to two years is automotive. And yeah, we're talking about small quantities, but there certainly are. There's the lighting application, which is something you guys have talked about, but we are seeing OLED displays on certain cockpit displays. Can you talk to the automotive and how the company sees that?

Question: Jim Ricchiuti - Needham & Company Inc. - Analyst : Okay. So let's move to the topic that I think most people want to hear an update on. What can you say -- maybe bring us up to date on what you have said about blue and blue and this material that you're working on.

Question: Jim Ricchiuti - Needham & Company Inc. - Analyst : And just correct me if I'm wrong on this, but I thought in one of the calls, it'd be when not if was characterized in months versus years.

Question: Jim Ricchiuti - Needham & Company Inc. - Analyst : Okay. Can you help us understand -- so let's say we come into the -- next week, we hear an announcement from UDC that you've hit the commercial performance milestones that you wanted. How quickly does the phosphorescent emitter material -- how quickly could it be incorporated in the manufacturing operations of your customers? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 15, 2025 / 2:30PM, OLED.OQ - Universal Display Corp at Needham Growth Conference

Question: Jim Ricchiuti - Needham & Company Inc. - Analyst : And clearly, it makes sense that it would vary by customer and potentially by the type of device that that display is going to go into. But is there anything that we may have learned from just going back a number of years? But the commercialization of the green phosphorescent material, there was only one manufacturer.

Question: Jim Ricchiuti - Needham & Company Inc. - Analyst : And maybe just to go back to those early days, was there anything that we should remember in terms of the premium pricing that you achieved with green that we should be thinking about as it relates to when the time comes and we see a commercial blue product from UDC?

Question: Jim Ricchiuti - Needham & Company Inc. - Analyst : Is it reasonable to assume that just given the demand from the customer, from the display manufacturers for commercial blue, that there may not necessarily be an extended negotiation process? Again, how do we think about it? You hit commercial spec and then you begin negotiating. You're saying on the one hand there's real strong demand for the product. Is there any way to think about that? And again, I don't know if green is -- plays into what the history was of that, if that has any bearing.

Question: Jim Ricchiuti - Needham & Company Inc. - Analyst : Okay. Competition, we occasionally hear about new competition in emissive materials. And oftentimes, it's from universities or early-stage companies. We also hear China. How much of a competitive threat is there from other players and, again, including those in China? Talk to us about that.

Question: Jim Ricchiuti - Needham & Company Inc. - Analyst : But would you characterize it more as noise in terms of the competitive threat? I guess what I'm asking is, do you view a competitive threat, if there is a significant competitive threat, any differently than in years past? Or is this just more standard smaller firms trying to get a foothold in this market?

Question: Jim Ricchiuti - Needham & Company Inc. - Analyst : Maybe just a quick question, because the question is coming up in so many of the presentations this week in the conference, just how do we think about tariffs, trade policies. Maybe walk us through some scenarios just as it related to the last go around. Was it an impact on UDC at all?

Question: Jim Ricchiuti - Needham & Company Inc. - Analyst : You touched on this earlier, just the capacity and a lot -- much of the capacity that's been coming online and will be coming online is geared toward IT. But is there any way to talk about the overall capacity picture as it relates to '26? Or is this more a 2027 driver? You have different display companies investing at different times.

Question: Jim Ricchiuti - Needham & Company Inc. - Analyst : Okay. Great. So lastly, just on corporate allocation, the company has done some M&A and it's been mainly patents, patent portfolios, but not exclusively. You bought a contract research organization a few years back. Has the appetite to do M&A changed at all and particularly as you think even about different applications of the technology?

Question: Jim Ricchiuti - Needham & Company Inc. - Analyst : Just on the venture investments, not a lot of attention gets paid to it. Have you said how many companies you've invested in?

Question: Jim Ricchiuti - Needham & Company Inc. - Analyst : Okay. Anything that you want to highlight?

Question: Jim Ricchiuti - Needham & Company Inc. - Analyst : And the other -- remind us, the cash position at the end of Q3 was? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 15, 2025 / 2:30PM, OLED.OQ - Universal Display Corp at Needham Growth Conference