It's official: Samsung (OTC: SSDIF.PK) is emphatically not splitting up with Universal Display
After a series of six successive three-month extensions to an agreement first signed in 2005, the world's largest maker and user of OLED screens has signed a six-and-a-half year contract with its favorite OLED technology developer.
In a two-part structure, Samsung pays license fees for the right to dip into Universal Display's cache of phosphorescent OLED patents and also pays the company to supply OLED materials along the way.
This isn't a long-term extension of the old deal, either. As analyst firm Cowen notes, the old structure of royalties per unit shipped was replaced by a straight license fee payable upfront. The materials side-deal takes the place of the old per-unit royalties.
This is a more predictable revenue stream and sets a precedent for other partners -- potential or existing -- when their deals are hammered out. Given the central importance that Samsung holds in Universal Display's little world along with the lengthy negotiations, you can bet that plenty of other tech mavens have been watching this negotiating table closely, more likely chewing fingernails to the nub rather than chowing down on popcorn.
We don't have any hard dollar figures at this point, and Universal Display's next quarterly report is about two months away, so the real impact of this contract won't be known for a while. Considering the current climate in technology patent dealings, I'm pretty sure Universal Display was wielding the thumbscrews in this case.
In the meantime, I'd expect a host of currently smaller OLED fans to get their own deals figured out. LG Display
By 2013, we'll have big-screen OLED TV sets and enough manufacturing muscle to supply even Apple's
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