Universal Display - Earnings Call - Q4 2024
February 20, 2025
Executive Summary
- Q4 2024 revenue was $162.3M, gross margin 77%, and diluted EPS $0.96; EPS was reduced by $0.26 from OVJP restructuring ($8.9M R&D) and Korean FX loss ($6.7M).
- 2025 guidance: revenue $640M–$700M, total gross margin ~76–77%, operating margin ~35–40%, tax rate ~19%, and materials-to-royalty ratio ~1.4:1.
- Management reiterated phosphorescent blue commercialization is “months, not years” beyond 2024 and could lift OLED display energy efficiency by up to 25%.
- Dividend increased to $0.45 per share for Q1 2025 (from $0.40), reinforcing capital return and cash generation confidence.
- Street consensus from S&P Global for Q4 2024 was unavailable via the tool; results vs estimates cannot be quantified and any estimate-related comparisons are omitted due to data unavailability.
What Went Well and What Went Wrong
What Went Well
- Record FY 2024: revenue $647.7M, net income $222.1M, operating income $238.8M; total gross margin 77%.
- Material sales strength: Q4 material sales rose to $93.3M vs $82.2M YoY; red emitter $25M and green/yellow-green $67M in Q4.
- Strategic tone and blue progress: “We continue to believe that the additional time needed to introduce a commercial phosphorescent blue into the market will be measured in months and not years,” and “phosphorescent blue can increase the energy efficiency of an OLED display by up to 25%”.
What Went Wrong
- Royalty and license revenue declined: $64.4M vs $72.9M YoY due to lower catch-up adjustments and mix.
- Operating margin compressed in Q4: 32% vs 41% in Q4’23, with ~5ppt impact from restructuring charges.
- EPS down YoY: $0.96 vs $1.29 driven by restructuring and FX losses; effective tax rate slightly lower (16.8% vs 18.0%) but not enough to offset below-the-line headwinds.
Transcript
Operator (participant)
Ladies and gentlemen, and welcome to Universal Display Corporation's Fourth Quarter and Full Year 2024 Earnings Conference Call. My name is Sherry, and I will be your conference moderator for today's call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance, please press star zero on your telephone keypad. As a reminder, this conference is being recorded for replay purposes. I would now like to turn the call over to Darice Liu, Senior Director of Investor Relations. Please proceed.
Darice Liu (Senior Director of Investor Relations)
Thank you, and good afternoon, everyone. Welcome to Universal Display's Fourth Quarter Earnings Conference Call. Joining me on the call today are Steve Abramson, President and Chief Executive Officer, and Brian Millard, Chief Financial Officer and Treasurer. Before Steve begins, let me remind you today's call is a property of Universal Display. Any redistribution, retransmission, or rebroadcast of any portion of this call in any form without the express written consent of Universal Display is strictly prohibited. Further, this call is being broadcast live and will be made available for a period of time on Universal Display's website. This call contains time-sensitive information that is accurate only as of the date of the live webcast of this call, February 20th, 2025. During this call, we may make forward-looking statements based on current expectations.
These statements are subject to a number of significant risks and uncertainties, and our actual results may differ materially. These risks and uncertainties are discussed in the company's periodic reports filed with the SEC and should be referenced by anyone considering making any investments in the company's securities. Universal Display disclaims any obligation to update any of these statements. Now, I would like to turn the call over to Steve Abramson.
Steve Abramson (CEO)
Thanks, Darice, and welcome to everyone on today's call. As we look back on 2024, we are pleased to report record revenues and record earnings. Revenue was $648 million, operating income was $239 million, and net income was $222 million, or $4.65 per diluted share. Brian will take you through the details momentarily. 2024 was a solid growth year for us. We cultivated our global partnerships, which included new long-term multi-year agreements with Visionox, strengthened our leadership position in the OLED ecosystem, and made significant advancements in our operational, strategic, and R&D roadmaps. Amid a dynamic market landscape, shifting consumer demands, and a rapidly evolving global economy, we continue to execute and embrace the opportunities that drive our innovation, growth, and industry-leading position. Since the inception of our company 30 years ago, we have been at the forefront of the OLED industry. Innovation is the foundation of everything we do.
It drives us to push the boundaries of what is possible and to continuously explore new and better ways to solve the challenges of today and tomorrow. Our steadfast commitment to innovate and forge new paths has enabled us to stay ahead of the curve and anticipate the needs of the growing OLED market. We repeatedly traversed a complex path from idea to lab, lab to fab, and fab to high-volume commercial production. Leveraging three decades of pioneering know-how and trade secrets, our team of scientists, engineers, and technicians are continuously inventing, developing, and delivering next-generation phosphorescent reds, greens, yellows, and hosts to meet the evolving needs of our customers, the display industry, and the consumer electronics market. Regarding blue, we believe we are closer than ever and that the commercialization of phosphorescent blue will represent a significant leap forward in OLED technology.
We understand the excitement as well as the expectations surrounding it. I want to reassure you that we are on the right path and we are confident in our ability to deliver. The journey has been challenging, as all trailblazing breakthroughs are, and our teams continue to work tirelessly. While not yet at the finish line, we are excited about the strides we are making and continue to believe that the additional time needed to introduce a commercial phosphorescent blue into the market will be measured in months and not years. Once commercialized, we believe that our phosphorescent blue can increase the energy efficiency of an OLED display by up to 25%.
As consumer products continue to evolve with advanced features such as connectivity and artificial intelligence, we believe that panel makers and OEMs can leverage the increased efficiency in various ways, such as adding more functionality and performance to a device without sacrificing battery life. Phosphorescent blue is slated to be a game changer for the industry, for consumers, and for us. Looking to 2025 and beyond, we are excited about the opportunities ahead. OLEDs are continuing to proliferate across the consumer electronics landscape, from smartphones to IT and automotive to TVs and more. According to Omdia Research, OLED market growth is expected to rise substantially over the next five years. After reaching more than 50% of the smartphone market in 2024, OLED smartphone displays are expected to grow from 784 million units to 952 million units in 2029.
OLED IT displays are expected to nearly quadruple from 20.2 million units in 2024 to 77.6 million units in 2029. The OLED monitor market, though still in its early stages, already counts gamers among its earliest adopters due to OLED's fast response times, high refresh rates, and superior image quality. Units are forecasted to more than double from two million units in 2024 to 5.1 million units in 2029. The automotive market holds immense potential as car makers are starting to turn to OLEDs for both interior and exterior applications, driven by demand for enhanced aesthetics, functionality, and safety. The flexibility of OLEDs allows for curved, thin, and lightweight form factors. Additionally, with the shift toward EVs, the adoption of energy-efficient OLED panels aligns perfectly with EVs' low power consumption needs.
OLED automotive displays are expected to approximately quadruple from 2.6 million units in 2024 to 10.6 million units in 2029. Don't forget the exterior, where OLEDs are making their way into automotive lighting, including tail lights and turn signals. On the large panel front, OLED TVs are forecasted to grow from 6.8 million units in 2024 to 7.9 million units in 2029. We believe that the continued proliferation of OLEDs, especially in the nascent medium-sized market, is driving a new multi-year CapEx cycle. We continue to estimate that year-end 2025 installed OLED capacity, as measured in square meters, will increase by approximately 10% over year-end 2023. This forecast includes initial equipment installs from Samsung's $3 billion investment and the first phase of BOE's $9 billion investment for the respective new Gen 8.6 fabs.
Looking beyond this year, additional investments in new OLED capacity are expected with phase two of BOE's Gen 8.6 fab, Visionox's new $7.7 billion facility, and expected projects that are still in the works. As of today, approximately $20 billion has been committed to building new Gen 8.6 OLED capacity. A new and exciting OLED fab investment cycle has begun, and we believe it will fuel the next leg of the growth for the industry and for us. Before I hand the call over to Brian, I would like to go over the next phase for OVJP technology. In December, we announced the appointment of global technology veteran Chandra Nair, the CEO of our new Singaporean subsidiary, Universal Vapor Jet Corporation, which encompasses OVJP.
While we continue to believe that OVJP can be a cutting-edge technology for large area display manufacturing, OLED investments are expected to center on the medium area IT market for the next few years. As a result, Chandra and his team are exploring new market verticals where our dry vapor jet printing technology may be an enabling platform. On that note, let me turn the call over to Brian.
Brian Millard (CFO)
Thank you, Steve. I'm pleased to report that 2024 was a record-breaking year of exceptional financial performance. We achieved 12% year-over-year growth, achieving an all-time high of $648 million in revenue. By segment, material sales were $365 million, royalty and license revenues were $267 million, and adhesive revenues were $15 million. Our 2024 revenues included a cumulative catch-up adjustment of $11 million, consistent with 2023. 2024 total gross margins were 77% for the year, flat from 2023. 2024 operating expenses were $260 million, compared to $224 million in 2023. The fourth quarter of 2024 included $8.9 million of restructuring costs related to the planned closure of the OVJP California location and related reorganization that impacted EPS by $0.15. Our 2024 operating income was $239 million, which translates into operating margins of 37%. 2024 net income was $222 million, or $4.65 per diluted share.
In 2024, we recorded $7.2 million of foreign currency exchange losses related to a tax receivable denominated in Korean won that impacted EPS by $0.12. This Korean FX loss and the OVJP restructuring charges resulted in a combined $0.27 reduction in full year 2024 EPS. We ended the year with $928 million in cash, cash equivalents, and investments. Moving on to our fourth quarter results, revenue for the fourth quarter of 2024 was $162 million, up 3% from $158 million in the fourth quarter of 2023. Fourth quarter 2024 and 2023 revenue included a cumulative catch-up adjustment of $5 million. Material sales were $93 million in the quarter, compared to $82 million in the fourth quarter of 2023. Green emitter sales, which include our yellow-green emitters, were $67 million in the fourth quarter of 2024, which compares to $63 million in the fourth quarter of 2023.
Red emitter sales were $25 million, which compares to $18 million in the fourth quarter of 2023. As we've discussed in the past, material buying patterns can vary quarter to quarter. Fourth quarter royalty and license fees were $64 million, compared to the prior year's period of $73 million. Adhesive revenue for the fourth quarter of 2024 was $4.6 million, compared to $3.2 million in the fourth quarter of 2023. Fourth quarter cost of sales was $37 million, translating into total gross margins of 77%. This compares to $36 million and total gross margins of 77% in the fourth quarter of 2023. Fourth quarter operating expenses, excluding cost of sales, were $72 million. This compares to $58 million in the fourth quarter of 2023. Operating income was $52 million in the fourth quarter of 2024, translating into operating margin of 32%.
This compares to the prior year period of $65 million and operating margin of 41%. Due to the previously mentioned OVJP restructuring costs, fourth quarter 2024 operating margins were negatively impacted by approximately 5 percentage points. The fourth quarter 2024 income tax rate was 17%. Net income for the fourth quarter was $46 million, or $0.96 per diluted share. This compares to the fourth quarter of 2023's $62 million, or $1.29 per diluted share. The OVJP restructuring charges and Korean FX loss resulted in a combined $0.26 reduction to Q4 EPS. Now turning to our 2025 outlook, we expect our 2025 revenues to be in the range of $640 million-$700 million. We estimate that our 2025 ratio of materials to royalty and licensing revenues will be in the ballpark of 1.4-1. Total gross margins are expected to be approximately in the range of 76%-77%.
Operating expenses are expected to grow at a low single-digit percentage rate year-over-year, with R&D expected to remain flat, while SG&A expenses are expected to increase 10%-15%. 2025 operating margins are expected to be in the range of 35%-40%. We expect the effective tax rate for 2025 to be approximately 19%. And lastly, we are pleased to announce that the board of directors has approved an increase to our quarterly cash dividend. A dividend payment of $0.45 per share will be paid on March 31, 2025, to stockholders of record as of the close of business on March 17, 2025. The dividend increase reflects the confidence in our robust future growth opportunities, expected continued positive cash flow generation, and commitment to return capital to our shareholders. With that, I'll turn the call back to Steve.
Steve Abramson (CEO)
Thanks, Brian. At UDC, we pride ourselves on pushing boundaries, exploring new frontiers, and delivering solutions that redefine what's possible. As we look forward to 2025 and beyond, the road ahead is filled with immense opportunity. Across the OLED industry, product roadmaps are broadening, and leading display makers are investing in new fabs to meet the growing OLED demand, especially in the medium-sized panel market. The coming years are poised to bring meaningful new OLED capacity, new OLED products, and new OLED adoptees. As a pioneer and leader in the ecosystem, we are well-positioned to continue supporting our customers and enabling the industry's demand for higher performance and increased functionality in consumer products with our broadening portfolio of energy-efficient, high-performing phosphorescent materials and OLED technologies. I would like to thank each of our employees for their drive, desire, dedication, and heart in elevating and shaping Universal Display's accomplishments and advancements.
We are committed to being a leader in the OLED ecosystem, achieving superior long-term growth, and delivering cutting-edge technologies and materials for the industry, for our customers, and for our shareholders, and with that, operator, let's start the Q&A.
Operator (participant)
Thank you, Mr. Abramson. We will now be conducting a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two to remove yourself from the queue. For participants using speaker equipment, it may be necessary to pick up the handset before pressing the star keys. One moment while we pull for questions. Our first question is from Brian Lee with Goldman Sachs. Please proceed.
Brian Lee (Chief Risk Officer)
Hey, everyone. Good afternoon. Thanks for taking the questions. I wanted to start off with blue because I know blue's obviously a key focus. And as you said, Steve, at the outset of the call, it's getting closer than ever. You recently updated the blue timeline in the language, months, not years, I think on the August call. We're sitting here now in late February. It's still months, not years. I mean, if we kind of dial back to when you first started using that terminology, it would presumably mean months, not years is before the end of calendar 2025. Are you willing to commit to that type of finite timeline, or are you starting the clock over here in February, months, not years, where months from here could actually be early 2026?
Brian Millard (CFO)
Yeah. Hey, Brian. Yeah. So, back in August, as you said, when we, on our Q2 call, did announce that we thought it was going to be months, not years, that was months, not years of a delay beyond 2024. So, we previously said we expected in 2024 to have commercial performance of our blue material. So, we're now here in February, so we think this is kind of month two, so to speak, off of that timeline. As Steve said in his remarks, we continue to be very pleased with the progress that we're making and continue to believe that we're on the right path. Just need more time to work internally as well as with our customers to bring into commercialization.
Brian Lee (Chief Risk Officer)
Okay. Fair enough. We'll keep tracking the progress on that. I guess question for you, Brian, maybe just on kind of the modeling for this year. I appreciate all the moving pieces. Always helpful to get all those line items. Last year was kind of one of the more linear revenue growth years we've seen for you guys. There was not a lot of seasonality from first half to second half. Honestly, all the quarters were somewhat in the same revenue ballpark. As we think about your $640 million-$700 million revenue guidance for the full year 2025, is seasonality coming back to a more normal cadence in 2025 as we think about first half, second half trends, Q1 being kind of a low point for the year? Or are there reasons, drivers, product cycles, etc., that you have visibility into that would suggest 2025 looks, again, like 2024?
Brian Millard (CFO)
Yeah. It's a good question. As you said, we typically have had second half orientation to our revenues, and our plan for this year does have second half being stronger than first half. At the same time, I think there's just a number of different macro uncertainties this year that may cause that to shift. But based on the plan we have as of now, it does look like second half is stronger.
Brian Lee (Chief Risk Officer)
Okay. Great. And then last one, and I'll pass it on. I think last quarter, you guys had mentioned a little bit of inventory. I believe it was related to China. I don't know if that was LG China or just other China manufacturers. Can you kind of update us on what you see out there in terms of inventory status? Is that all clear into the early part of 2025? Are you seeing any drag from that to start the year? Thank you, guys.
Brian Millard (CFO)
Yeah. The comment that we made back on the Q3 call about inventory was that we had anticipated that Q4 was going to be not as strong as it ended up being. We thought our customers may bring some of their inventory levels down heading into the end of the year. I think as of now, we've seen fairly normal inventory levels. We haven't seen anything out of the ordinary one direction or another at this point.
Brian Lee (Chief Risk Officer)
All right. Great. Thank you.
Brian Millard (CFO)
Thanks, Brian.
Operator (participant)
Question is from Scott Searle with Roth Capital Partners. Please proceed.
Scott Searle (Managing Director and Senior Research Analyst)
Hey, good afternoon. Thanks for taking the questions. Nice job to end up here with excellent results. Hey, Steve, in terms of looking at your customers, I guess following up on Brian's question, it doesn't sound like there's a tremendous amount of inventory that's out there with those customers. I'm wondering if you could elaborate on that a little bit. Looking through the geographic mix, it doesn't seem like there were any major prebuys or otherwise ahead of potential tariffs. So I'm wondering if you could just clarify that the sequential progression that you would expect from December into March for materials and how the geopolitical situation, particularly from a tariff standpoint, is expected to impact you guys in 2025.
Brian Millard (CFO)
Yeah. So on inventory, Scott, as I said, we had expected Q4 was going to be a bit lighter than it ended up being because we had expected inventory drawdown heading into the end of the year. As of now, we've seen fairly normal inventory patterns, normal buying patterns from our customers. As I said, though, there is a lot of uncertainty this year in terms of macro factors and how that might weigh in, tariffs being one of them. And as it relates to tariffs, I mean, we have been in the business for three decades, have been doing global trade for that period of time, and are experienced in how to successfully navigate and deal with it. But we're not immune from it either.
So it's something that we plan for, both in terms of how we source materials in our supply chain as well as our own manufacturing footprint. Having Shannon in our footprint is certainly beneficial from a global trade perspective. So it's something that we're planning for and monitoring, but that's about as much as we can share at this point.
Steve Abramson (CEO)
Gotcha. That's helpful. And maybe to follow up in terms of the 2025 guidance of $640 million-$700 million, I'm wondering if you could articulate the swing factors at the low end of the range to the higher end of the range? I know it's only middle of February at this point in time. But also if blue is including that, I think your past policy had not been to include it in your assumptions. I'm just kind of wondering if the blue patent is all of that done?
Brian Millard (CFO)
Yeah. So on the factors for the range, we certainly have a base case that's within the range and upside and downside opportunities off of that just based on really consumer demand as well as development work on our customers and how that might fluctuate both on red, green, and blue. As it relates to blue, we do have blue in our revenue guidance, but it's not projecting significant growth off of this year because we do anticipate it's really going to be a development quantity this year, which development quantities a little bit can go a long way as it relates to development. It also tends to be fairly variable quarter to quarter in terms of development quantities that our customers need to advance their blue work.
Steve Abramson (CEO)
Okay. Lastly, if I could, just from a capacity addition standpoint, I think you said 10% by the end of 2025 versus the end of 2023. But there are quite a large number of fabs that are expected to ramp into production, I think, in the second half of 2026. I know you probably won't get out ahead of your skis in terms of providing a projection to 2026, but at this point in time, would you expect to see an inflection in terms of the growth beyond double digits or beyond 10% as we get into 2026 from a capacity standpoint? Thanks.
Brian Millard (CFO)
Yeah. I think, as you said, we're not in a position right now to give 2026 guidance other than to say certainly these new fabs that are being constructed at Samsung, BOE, and Visionox are all positive signs for the years ahead, especially as it relates to the OLED IT market.
Steve Abramson (CEO)
Great. Thank you.
Brian Millard (CFO)
Thanks, Scott.
Operator (participant)
Our next question is from Mehdi Hosseini with SIG. Please proceed.
Mehdi Hosseini (Senior Equity Research Analyst)
Yes, sir. Excuse me. Thanks for taking my question. A couple of follow-ups for me. On the blue topic, can you help me understand the depth and diversity of the customers that are evaluating that just limited to your largest customer or various customers from different regions are actually evaluating your blue?
Brian Millard (CFO)
Yeah. Hi, Mehdi. So we're working with multiple customers across multiple regions on blue. So that's about as much as I can share at this point.
Mehdi Hosseini (Senior Equity Research Analyst)
Sure. Sure. And just for us to better understand the milestones and the thought process, when you say you are months away from commercialization, not years, is that across the board or is there any customer that is ahead of others?
Brian Millard (CFO)
Yeah. We can't speak to our customer's progress other than to say the months, not years, is UDC achieving a commercial design win of blue, of our blue material with a customer.
Mehdi Hosseini (Senior Equity Research Analyst)
Okay. And then on the last one for me, actually sticking with the blue topic, is there any way you can help me understand the R&D revenue associated with blue that you're able to generate? I'm assuming that you're still able to generate a little bit of revenue from the host. So if I just take your material revenue, the rest outside of Emitter, how much of R&D blue is included?
Brian Millard (CFO)
So we had $4.6 million of blue sales in 2024, and that was a combination of emitter and host revenues, the majority being emitters, but we have been selling hosts and development quantity as well.
Steve Abramson (CEO)
Got it. Thank you.
Brian Millard (CFO)
Thanks.
Operator (participant)
Our next question is from James Ricchiuti with Needham & Company. Please proceed.
James Ricchiuti (Senior Analyst)
All right. Thanks. Don't know if you're going to be in a position to answer this either, but just with respect to the timeline for blue, can you say whether you are in discussions regarding a blue license agreement with your largest customer, or do you just anticipate this occurring once you have a commercial design win to talk about?
Brian Millard (CFO)
Yeah. I can't talk about the status of any negotiations other than to say we're always talking to our customers about a lot of different things on blue and other red and green as well.
James Ricchiuti (Senior Analyst)
Okay. Brian, just with respect to the 2025 guidance, is there any unusual variations in pricing for your materials versus 2024, or is this the guide mainly just a function of the weak uncertain consumer electronics outlook, or maybe a combination of both?
Brian Millard (CFO)
Yeah. There's not a significant price pressure. Our customer contracts, we don't really have any new significant agreements that are up this year. And we do have so there's not significant ASP pressure in 2025. It tends to be more the latter being just general demand environment and what that might look like that might drive the higher the low end.
Steve Abramson (CEO)
Got it. Thank you.
Operator (participant)
Our next question is from Krish Sankar with TD Cowen. Please proceed.
Hi, yeah. Thanks for taking my questions. This is Steven calling on behalf of Krish. First one, if I could, on sort of the smartphone end market. Thanks for some of the color earlier in the prepared remarks about, I guess, the estimated number of smartphones to use OLED displays in the coming years. Just kind of curious for those targets that you mentioned, or at least market projections. Do you anticipate sort of a linear progression in terms of the rising penetration rates, or might that be a bit more weighted towards the outer or the later parts of that forecast period, just given some of the market share dynamics between mid-tier and entry-tier Android phones in the market?
Brian Millard (CFO)
Yeah. I think it's hard to predict the exact slope of the curve or linearity of it other than to say OLED smartphones right now, greater than 50% penetrated. In our IR deck, we do have a deck that projects some data from Omdia of what they're saying some of the penetration rates might be over the next few years. So that's a guidepost that we look to regularly in terms of the progress. But certainly, all the premium smartphones today are OLEDs, many of them mid-tier, and we're seeing even some of the low-end smartphones adopt OLED displays. So there's opportunity across all segments of the smartphone market, and we expect OLEDs to continue to gain further adoption in that market.
Got it. Thanks. And a quick follow-up on operating expenses. So Brian, you mentioned that SG&A will be up this year. Kind of curious, what are some of the drivers for that? And I guess looking a little further out, is that dynamic going to sort of revert back to a more normalized both R&D and SG&A growing kind of in tandem going forward after that?
Yeah. This is, I think, a little bit of a one-time step up, so to speak. I mean, we have a very lean organization. We've always operated that way. We will continue to do that. But there are certain areas that we want to put additional resource behind to make sure we're prepared for the growth in the next few years, as well as to some degree as well, we're looking at our local support in Asia for our customers and making sure that we're supporting them as much as we can locally. So there's some element of SG&A that's going to that effort.
Got it. Got it. If I could squeeze one more in also about sort of operating costs, just with the OVJP operations restructuring and movement of a good portion of the operations to Singapore, I was curious, are you able to quantify what that cost savings is by moving operations to Singapore compared to in California? And any thoughts on sort of timeline to mature revenues from a strategic standpoint for that business? Thanks.
Yeah. So it is a net savings, the move from California to Singapore. And that's part of the reason why our R&D expense is projected to be flat in 2025 off of 2024 is because of the fact that there are some savings due to winding up the California location. In terms of revenues for OVJP and UVJC, which is our Singapore subsidiary, too early to really put any posture other than to say we're very happy to have Chandra and the new leadership on board there and feel very optimistic about their prospects going forward.
Okay. Great. Thank you.
Thanks.
Operator (participant)
As a reminder, this is star one on your telephone keypad if you would like to ask a question. Our next question is from Martin Yang with Oppenheimer & Company. Please proceed.
Martin Yang (Executive Director)
All right. Thank you for taking my question. A quick follow-up on the previous speaker regarding OpEx. Is there any other cuts or incremental savings on R&D other than OVJP for 2025?
Brian Millard (CFO)
No. OVJP's, Martin, stands out as the significant area that we're just I think it's really just a pivot and a kind of realignment of our efforts there. And we're setting up a team in Singapore. It's going to be a smaller team than what we had in California. And that's really the big area that's of change in 2025.
Martin Yang (Executive Director)
Thanks, Brian. My next question is around this year's guidance. How much of your outlook regarding new install capacity by the end of 2025, how much of that is a factor in your guidance, more specifically in your annual revenue growth?
Brian Millard (CFO)
A relatively small piece of it relates to some of these new fabs coming online and some of the material that may be needed for that. I mean, it's not a significant component of the growth in 2025 off of 2024.
Martin Yang (Executive Director)
Got it. Thank you. My last question is just to confirm your comment on blue. So when you initially said blue's delay is in months, not years, essentially that's clock start ticking in your original intention around the beginning of 2025 or end of 2024?
Brian Millard (CFO)
That's right, so back in August when we said we thought it was going to be a delay of months and not years, that delay was beyond 2024, so kind of started a month ago, so to speak, so it was really, as you recall, our prior expectation and communication had been that we thought in 2024 we would have commercial performance of blue, and this now is really months and not years beyond 2024.
Martin Yang (Executive Director)
Thank you, Brian. That's it for me.
Brian Millard (CFO)
Thanks.
Operator (participant)
Our final question is from Atif Malik with Citi. Please proceed.
Atif Malik (Analyst)
Hi. Thank you for taking my questions. Brian, your materials sales did grow like 14% last year, and you're seeing maybe a 4% type growth this year, so marked deceleration. Can you just help us out? How did the market do last year, the OLED materials market last year, and what are your expectations for the market this year?
Brian Millard (CFO)
Yeah. So we are projecting slower growth in 2025. 2023 was also a down year. So it's a little bit of the reason why the growth rate in 2024 was as high as it was, also coming off of a fairly lower base in 2023. And I think if you look at the industry growth rate and what capacity demand is this year, 5%-6% thereabouts is kind of what a lot of the analysts that follow the industry are projecting in terms of square area growth. And if you look at our business historically, because of customer efficiencies as well as volume price dynamics and otherwise, our growth rates have typically been just shy of the overall industry growth for those reasons. And so we think our guidance range is fairly in line with what the industry is projecting.
Atif Malik (Analyst)
Got it. And on the blue emitter, is your understanding that you guys are going to be sole-sourced on that, or there is competition that's also competing for blue?
Brian Millard (CFO)
We believe that all paths to high-efficiency blue go through our materials. And so that's our position. We don't believe there's anything competitive to us.
Atif Malik (Analyst)
Great. And then lastly, China semiconductor market, they're doubling down on materials on the semiconductor side. And the question comes up with investors in terms of what you're seeing in terms of competition from local China material suppliers on these emitter materials. Can you update us what you see there?
Brian Millard (CFO)
Yeah. I mean, it is certainly the Chinese market has been one where there are a number of local players on the materials side that have come up in the last few years. And it's something we monitor very closely. Many of them are focused on areas of the OLED stack that are not competitive to us. There are some that are trying to compete in our space. We continue to believe that due to our long-standing customer relationships, the quality of our materials, our vast patent portfolio, that we will continue to be the leader for the foreseeable future in this space.
Atif Malik (Analyst)
Great. Thanks.
Brian Millard (CFO)
Thanks, Atif.
Operator (participant)
Thank you. This concludes our question and answer session. I would like to turn the conference back over to Brian Millard for any additional or closing remarks.
Brian Millard (CFO)
Thank you for your time today. We appreciate your interest and support.
Operator (participant)
Thank you. This will conclude today's conference. You may disconnect your lines at this time, and thank you for your participation.