Question-and-Answer Session
Operator
(Operator instructions) Your first question comes from the line of Jim Ricchiuti of Needham & Company.
Jim Ricchiuti – Needham & Company
Good afternoon. Steve, in your opening remarks, you alluded to AU Optronics planning to restart their activities in the OLED market. You guys have had an agreement with them in the past, I wonder can you talk a little bit about how that relationship could unfold? Are they still a licensee?
Steve Abramson
No, our relationship with AU Optronics in the past was that we sold the material and we recorded material sales revenue and license fee. During this hiatus, we have obviously maintained a good relationship with the company and we continue to have a good relationship with the company now that they have restarted their efforts. They are obviously one of the largest flat-panel display manufacturers in Taiwan and their re-entry into the OLED business is, I think, a very good sign.
Jim Ricchiuti – Needham & Company
A question on the – on royalty and license revenue in the quarter, it is down sequentially and I just – we have seen reports – I am sure you guys have as well of Samsung SDI showing some softer shipments in Q2, so if that in fact were true, would that explain the sequential decline in you royalty revenue in this quarter?
Sid Rosenblatt
The royalty revenue, I believe, is up. It is the license fee revenue that is down.
Jim Ricchiuti – Needham & Company
Okay, thanks for correcting me.
Sid Rosenblatt
The royalty revenue was up, so – as compared to that and that would be for the second quarter. When we have a commercial supply agreement such as the one that Steve alluded to with AUO and some others, when we sell material we record commercial chemical sales to them and included in that is a license fee. So, the reason that it is down, we only sold commercial materials in this quarter to Samsung SDI and we did not have any commercial materials which we would also record a portion of as license fees to others customers that that commercial supply agreement, so it is the license fee portion that is down because the commercial chemical sales to customers other than Samsung are down.
Jim Ricchiuti – Needham & Company
Okay, thanks for clarifying that.
Sid Rosenblatt
You are quite welcome.
Operator
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