LED display maker loses value

Universal Display, a company which supplies LED systems to a number of the world’s largest manufacturers, has been hit with a slump in share values, after a deal with Samsung turned out to be less lucrative for the firm than originally anticipated.

Universal Display owns a number of patents, exceeding 1,000 in total, which cover various technologies behind modern LED displays and also the production of organic LED (OLED) systems, which are being heralded as the future of the industry.

A licensing deal with Samsung was originally thought to be worth about £240 million over the next five years, but this has actually fallen to about £185 million, after being finalised, according to Reuters.

At the start of the week, the share prices in Universal Display had fallen by around 10 per cent, capping off a quarter in which the firm has lost 25 per cent of its value.

Many LED display companies like Universal Display rely on the royalties earned when larger firms produce products based on their patents, in order to survive and this particular incident shows that wrangling with organisations like Samsung can be both financially rewarding and problematic.

Universal Display is based in the USA and in mid-2011, it confirmed that it would be working on next generation LED displays with Samsung, by supplying materials, presumably for the development of consumer OLED screens.

Universal Display also had hoped to bag a long term partnership with Samsung’s major South Korean rival, LG, although this, too, has been called into question in recent weeks.

People with a smartphone or a tablet may have experienced some of the LED technology made possible by Universal Display without knowing that they were doing so. The industry is built on companies like this and, hopefully, it will overcome the current issues.