Ever since LCD displays came to dominate the living room, the desktop and mobile communications, new technologies claiming superiority over LCD have made their pitches. Most have failed. Plasma displays (PDPs) and electrophoretic displays (EPDs) made waves for a while, but (at best) have become niche technologies.
By contrast, OLEDs have made market inroads, but their success has mainly been on the supply side where Samsung — a force to be reckoned with in the mobile phone space — has adopted OLEDs as its primary mobile display technology. NanoMarkets can, however, find little evidence that consumers themselves are jumping up and down with excitement about OLEDs.
So the big question for the OLED makers is whether (1) OLEDs will go the way of PDPs and EPDs or if (2) there is something genuinely new and exciting to be had in OLED technology.
NanoMarkets is firmly in the second camp and thinks that the OLED sector will generate $3.7 billion in materials alone by 2019. OLEDs are not only a display technology but also a lighting technology, and this “dual-use” aspect of OLEDs will ultimately “save” OLEDs from the fate of PDPs and EPDs.
How OLED displays fail to compete
NanoMarkets continues to believe that the unwavering support of Samsung will prove critical in determining the long-term success of OLEDs. And we note also that Samsung is not alone. Other firms have made substantial investments in OLED mobile displays — AUO obviously springs to mind, although Samsung remains the big guy on the block. Most observers expect Chinese firms to be a force to reckoned with in the OLED space and Chinese firms, BOE and Visionox, are already making their presence felt.
However, for this level of support to continue or increase, OLED display makers will have to see some of the purported advantages of OLEDs quickly become market realities. To date progress in this regard has been equivocal. Consider where OLEDs are today both in terms of consumer acceptance and their appeal to the display industry.
OLEDs and the consumer pitch: NanoMarkets’ sense of the market is that the OLED display industry’s messaging to consumers hasn’t quite worked:
• The next iPhone (sans OLEDs) will surely attract long lines outside Apple stores. There will be no queuing for the next Samsung AMOLED phone; if there are lines, it won’t be because of the AMOLEDs.
• A few years back, when AMOLEDs first became widely used in cell phones there was a PR surge touting the thinness and vibrant colors of OLED displays. NanoMarkets impression is that this did not win the hearts and minds of large numbers of purchasers.
• OLED TVs, despite recent price reductions (they are down to about $3,500) don’t seem to be selling well either. They are not well positioned to compete against what an LCD 4K system can offer.
• NanoMarkets is impressed technically with the latest transparent and flexible OLEDs, but it is going to take some marketing genius to transform these into a viable mass-market product. For example, so far what can be done with a flexible display — miniature readouts on the side of the phone, or curved form factors, for example — don’t seem likely to create a new generation of mobile communications, just mere novelties.
Costs and engineering: NanoMarkets believes that once the first onslaught of active matrix OLEDs failed to produce a big consumer response, OLED makers turned their attention to cost and engineering advantage; benefits that can be proven objectively unlike the aesthetic appeal of OLEDs to consumers.
At present, the conventional wisdom seems to be that the engineering/cost advantages are what are supposed to increase the market share of OLEDs going forward. The intrinsic cost benefits associated with OLEDs including (1) no need for backlights and (2) potential for solution processing, which is less costly than vapor deposition.
We think that claims of such engineering/cost benefits are convincing in abstract terms, but they certainly have yet to make a dramatic difference. Consider:
• Are OLED phones that much lower in price or that much more profitable than LCD phones?
• And after many years of talk, solution processed OLEDs are still just getting going.
NanoMarkets’ latest market research suggest that today 98 percent of OLEDs are still vapor deposited and that this ratio will still be around 80 percent by 2019. So while the advantages of solution processing are obvious to most observers, no insiders really expect solution processing to make its impact felt fast.
What we will need to see happen here is manufacturing innovation from the OLED makers themselves. Samsung would be the obvious place to look for this, but we think LG may ultimately play an important role. Efforts by the materials manufacturers will also be important — UDC immediately springs to mind here, but we should also remember that some very big Asian and European specialty chem firm produce OLED materials. These firms include Idemitsu Kosan, Nippon Steel, Sumitomo Chemical, and Mitsubishi Chemical.
OLED lighting as a driver for the OLED display industry
Looking at the analysis above, it is hard to resist the conclusion that OLED technology has much going for it, but if it were not for the powerful backing of Samsung might not be doing that well in the marketplace. In the display market there were CRTs then there were LCDs. Other display technologies — despite some positives — haven’t survived for long. One might easily become convinced that OLEDs — sans Samsung — would be headed down the same path.
But unlike PDPs and EPDs, OLED are also a lighting technology and lighting is different. Unlike the various technologies that have been proposed for displays, different lighting technologies have always co-existed. Incandescent, halogen, fluorescent and LED lighting continue to be sold (incandescent bulbs are still widely sold outside of developed nations). So a new lighting technology does not have the up hill battle that a new display technology has.
Given the technological diversity of the lighting space it may mean that OLEDs stand a better chance of making it in the lighting world than in the display world. A year ago, such a statement might have seemed cavalier. Yes, OLED lighting was available but in the form of luxury lighting. It could cost thousands of dollars for an OLED chandelier and the chandelier would be sold only by the most exclusive retailers. The recent image of OLED lighting has also been colored in by the fact that originally GE led to believe that moderate cost OLED lighting would be available as early as 2012. But GE wasn’t able to carry out its promise and seems to have dropped out of the OLED lighting space.
Until this year, OLED lighting was in very small quantities and mostly from pilot lines. But this has all changed since Konica Minolta announced that its was building a full-scale production line for OLED lighting with a production capacity of a million panels per month. This a serious commitment and when one considers that LG Chem, Philips and other “tier one” electronics and lighting firms are also edging towards producing OLED lighting products in quantity, it may be that the day of OLED lighting is just around the corner.
The point we are making here is not that OLEDs may be best suited to the lighting market, although this may also be true. Rather, what we are saying is that OLEDs may gain a foothold in the lighting market, where the competition is not so fierce as in the display sector and this will then help OLEDs in the display sector. We also note that OLED performance requirements are somewhat lower in the lighting space than in the display space, so the barriers to success, yet again, are lower in lighting than in displays.
NanoMarkets therefore foresees a scenario in which OLED lighting takes off in the lighting space which then reverberates in the form of greater success for OLED displays through displays inheriting experience curve effects in the lighting space. We notice, in particular, that OLED office lighting will certainly provide a kinder gentler market for large panel OLEDs compared to those difficult-to-make OLED TVs.