By Sam Boughedda
On Monday, Universal Display (NASDAQ:OLED) announced the signing of long-term OLED material supply and license agreements with Samsung (KS:005930) Display Ltd. (SDC).
The company said the agreements, which are scheduled to run through to December 31, 2027, with a potential extension of two years, mean Universal Display Corporation will continue to supply its UniversalPHOLED phosphorescent OLED materials and technology to Samsung Display for use in its OLED displays.
OLED shares jumped more than 4% on the news.
Following the announcement, Deutsche Bank analysts said the contract extension with Samsung removes some uncertainties for OLED.
"We view today's contract extension with Samsung positively, as it removes uncertainty toward the end of the contract and also weakens the bear argument that Samsung would adopt alternative emitter technology after it acquired Cynora (a provider of TADF materials) earlier this year," said the analysts, who have a Buy rating and $130 price target on OLED.
"We are not surprised by the renewal given the long working relationship between the two companies, but it's notable that Samsung chose to sign a new extension instead of exercising the 2-year option (through 2024). Importantly, as a result of the extension, we do not expect any supply disruption at the end of this year," the analysts continued.