A scan of newsflow in the display supply chain supports the case that Nanoco should be on track to receive follow-on orders in calendar H2. Nanoco has stated that its technology will be demonstrated in displays by a number of vendors at the forthcoming Touch Taiwan show. In particular, we believe there is a strong probability that Nanoco’s CFQDs will be used in high-end TVs being demonstrated by AUO, the world’s third largest display manufacturer. Press reports also indicate that Wah Hong, Nanoco’s film partner, expects to begin CFQD film shipments in Q4, albeit at modest levels.
Nanoco’s press release states that its technology will be demonstrated in the displays of a number of major manufacturers at Touch Taiwan, the world’s largest display show. This is no surprise: Nanoco’s first orders, through Wah Hong, were announced in June and made specifically for this event.
A scan of press releases from display manufacturers indicates that AUO (AUO.US), the world’s third largest, large-area (9”+) display manufacturer with 16.4% market share, is planning to demonstrate a number of high-end CFQD TVs at the show. Given Nanoco’s competitive lead in CFQD, we believe there is a strong possibility that these TVs will use Nanoco’s product. AUO is also planning to demonstrate a number of gaming-oriented QD computer displays and Innolux, the fourth largest large-area display manufacturer (15.7% market share), is demonstrating a number of QD televisions. It is not clear whether these devices are cadmium free or not, but if they are, we believe there is a good chance Nanoco would be the supplier.
We would normally expect a number of the devices on display to reach production in time for the festive season. This view is given support by press reports from China/Taiwan, which indicate that WAH Hong is anticipating the first volume orders for its CFQD film in Q4, albeit at a modest level.