OLED Lighting 2015-2022: Reassessing Markets and Momentum

n-tech Research Report
OLED Lighting 2015-2022:
Reassessing Markets and Momentum
Issue date: May 25, 2015
Report number: Nano-825
n-tech Research PO Box 3840 Glen Allen, VA 23058
Phone: 804-938-0030
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OLED Lighting 2015 – 2022: Reassessing Markets and Momentum
Report Summary
A year ago the outlook for OLED lighting seemed to brighten a bit, anticipating that new capacity
build-outs and continued development would enable higher outputs and lower costs, and finally
start to unlock broad market demand. Unfortunately these efforts largely haven't panned out: LG
Chem has pushed out its planned expansion, Konica Minolta did ramp but we believe with
disappointing results so far, and Philips is getting out of OLED lighting (and lighting components
entirely).
On the end market side of the equation, one can still find reasons to be encouraged. OLED
lighting products are showing up in home improvement stores for just $200, instead of the
thousands they cost just a couple of years ago. The first vehicles with OLED lighting are
expected to arrive within the next 12-24 months. And there are always occasional opportunities
to be found in unique showcase installations.
But the real big end-market fish for OLED lighting—office and commercial lighting, and low-cost
residential—remain frustratingly elusive, still unable to broadly appreciate and embrace OLED
lighting's value proposition. The issue seems to be less about technology and performance
improvements, and more about persistently high costs and pricing—which is why the
aforementioned manufacturing expansions and improvements (and more of them) are so
critical.
The OLED lighting sector is also stuck in a loop. Manufacturers are waiting to commit until there
is enough real or imminent end-market demand—but demand largely will be lured by vastly
cheaper products enabled through production improvements and lower costs. The question now
seems to be which strategy to embrace for the near- to mid-term: press on and believe, stand
pat and wait, or give up and get out? All these cases can be made.
This latest report from n-tech Research revisits our assumptions and expectations on the
evolution of end-markets for the OLED lighting sector, evaluating the challenges still standing
between OLED lighting and key end markets, especially general illumination in offices and low-
cost residential lighting. We include eight-year (volume and value) projections for all the major
market sectors along with an assessment of how OLED lighting can effectively compete with
conventional lighting technologies. This report also analyzes the core strategies of leading
players in the OLED lighting space, from technology development and manufacturing to key
partnerships.
TABLE OF CONTENTS
Executive Summary
E.1 Resetting Expectations: Changes from Our Previous Report
E.2 Update on End Markets: What's Holding Back Mass Markets
E.3 Update on Technology Improvements
E.4 Companies to Watch
E.5 Summary of Eight-Year Market Forecasts for OLED Lighting Markets

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Chapter One: Introduction
1.1 Background to this Report
1.1.1 OLED Lighting: Slow-Dancing with Demand
1.1.2 Mass Markets Still Elusive
1.1.3 Volume Leaders, Who Will Pay the Price?
1.1.4 Regional Plays: Europe, Asia, and U.S.
1.1.5 Scenarios, Scenarios
1.2 Objective and Scope of this Report
1.3 Methodology of this Report
1.4 Forecasting Assumptions
1.4.1 Panel Sizes
1.4.2 Production Capacity and Utilization Estimates
1.4.3 Pricing Estimates
1.5 Plan of this Report
Chapter Two: OLED Technology, Manufacturing, and Materials
2.1 OLED Lighting Performance: Status and Targets
2.1.1 Lifetimes
2.1.2 Efficacy
2.1.3 Luminance
2.2 Key Issues in Manufacturing
2.2.1 Process Progress Report
2.2.2 Production Yields
2.2.3 Expansion Plans and Promises
2.3 Generation Next: Migration to Large Panels
2.4 Update on Flexible Panels
2.5 Materials Update
2.5.1 Organic Stack Components
2.5.2 Substrates
2.5.3 Light Extraction
2.5.4 Encapsulation
2.6 Market Makers: Catalysts for OLED Lighting
2.7 Luminaires vs. Design Kits: The Market Moves On
2.8 Eight-year forecast of OLED Lighting Designer Kits and Samples
2.9 Key Points in this Chapter
Chapter Three: Automotive, the OLED Lighting Pace Car
3.1 Automobile Industry Requirements and OLED Lighting
3.1.1 Similarities with Other New Technologies
3.2 Uses for OLED Lighting in Automotive
3.2.1 Performance Tradeoffs for OLED Lighting in Automotive
3.2.2 External Lighting: Prime Real Estate
3.2.3 Internal Lighting: Coming to the Forefront
3.3 Flexible OLEDs: A Natural Fit for Automotive?
3.4 Update: Car Makers' Plans for OLED Lighting
3.5 Eight-Year Forecast of OLED Lighting in Automotive
3.6 Key Points from this Chapter
Chapter Four: Office/Commercial and OLED Lighting, Hunting the Killer App
4.1 Why Office Lighting Remains an Elusive Target

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4.2 Technical Requirements for Commercial Lighting
4.3 Designing to Win -- or Lose
4.4 Bigger is Better: Who's Leading the OLED Panel Charge
4.5 Eight-Year Forecast of OLED Lighting in Office/Commercial
Chapter Five: Homeward Bound: OLED Lighting in Residential/Consumer Lighting
5.1 Pricing Trends and Encouraging Signs
5.2 OLEDs vs. LEDs: Why Consumer Education Still Matters
5.3 Premium Product Conundrum: Embrace or Escape?
5.4 Easing Into It: How and Where to Watch for OLED in Residential
5.5 Eight-Year Forecast of OLED Lighting in Residential/Consumer Lighting
Chapter Six: Custom Large-Scale and Outdoor Installations
6.1 Large Installations: OLED Lighting's Newsmakers
6.2 OLED Lighting and Outdoor Applications: Still in the Shadows
6.2.1 Key Issues: Output and Encapsulation
6.3 Verdict: An Acceptable Niche?
6.4 Eight-Year Forecast of OLED Lighting in Custom Large-Scale Installations
6.5 Eight-Year Forecast of OLED Lighting in Outdoor Installations
Chapter Seven: Summary of Eight-Year Forecasts for OLED Lighting
7.1 Our Overall Thoughts: Where OLED Lighting Is and Needs to Be
7.2 Summary of Forecasts for OLED Lighting Panels
7.3 Summary of Forecasts for OLED Luminaires
7.4 Summary of Forecasts for OLED Lighting -- Grand Totals
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Chapter One: Introduction
1.1 Background to this Report
1.1.1 What’s the Matter with OLED Lighting?
With years of modest success in the high-end luminaire market, a growing role in
displays at trade shows and showrooms, and the recent appearance at mass market
retailers, OLED lighting has established itself as an interesting niche in the lighting
business. The big questions now for OLED lighting are (1) can OLED lighting ever
break out of its niche status and (2) if OLED lighting remains a market niche, where will
the money be made.
As far as (1) is concerned, the past year has been a bit of a disappointment. n-tech
originally thought that Konica Minolta’s new capacity would help build momentum for
OLED lighting, but our sources suggest that Konica Minolta has not been doing as well
in the OLED lighting business as it hoped. Meanwhile, LG Chem has pushed out its
planned Gen-5 expansion by several years, now reportedly eyeing a 2017 timeframe.
In Europe, where Osram and Philips once ruled the roost things aren’t so good either.
Osram has been somewhat quiet in the OLED space for at least a year, while Philips
has quit the lighting business altogether. The fact that the investment firm that bought
Philip’s lighting business didn’t take the OLED operations doesn’t help give warm fuzzy
feelings about OLED lighting either.
1.1.2 OLED Lighting’s Success as a Niche Business
However, if we consider (2), namely the possibility that OLED lighting will remain a
niche, we think that OLED lighting looks much better as a business.
First, there is still plenty of confidence in the future of OLED lighting. Although many of
the firms that were pushing OLED luminaires a few years ago have dropped out, Acuity
Brands still sees this technology as a major part of its retail product range.
OLED lighting products are now available through major retailers for as low as $199. In
the past year, Konica Minolta has pulled off what is by far the largest OLED installation
to date, a 15,000-panel showcase for a Japanese festival.
Unquestionably this is significant progress. And on the production side of things LG
Chem, has started sampling its largest OLED light panels (320 x 320 mm) with volume
production slated for July 2015.
The fact that Philips could find a buyer for its OLED lighting operations is also a salute
to OLED lighting of sorts and the fact that Corning is working with OLEDWorks on
flexible encapsulation is also a positive. In this alliance Corning is seeking a home for

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its flexible glass that has not taken off in the way that it hoped, but nonetheless, we
don’t think that Corning would have bothered if it didn’t believe that there was something
to the OLED story.
1.1.3 Getting Out of a Niche: OLED Lighting’s Perpetual Failure
n-tech’s forecasts suggest to us that the market for OLED lighting will be big enough for
OLED lighting to subsist as an interesting niche in the lighting market as a whole.
Lighting is a market—unlike the display market—that has proved itself very able to
support niches for an indefinite period of time. For this reason, n-tech remains confident
that OLED lighting will be a force to be reckoned with in the lighting market.
What we are now skeptical about is the ability of OLED lighting to ever break out of its
niche status. Here we see mostly failure. GE, which started to develop OLED lighting
at the beginning of the century, promised OLED lighting (manufactured using solution
processing) would be a moderately priced commonplace by 2010. This never
happened of course and GE quit the market entirely.
OLEDs and office lighting: Next up was the story that OLEDs’ breakthrough would
come with its acceptance as office lighting. Several firms were pushing this two or three
years back. This transition was supposed to have happened because of the energy
efficiency of OLED panels coupled with its good aesthetics. The firms that supported
this story also thought that OLED panels could be competitive with current fluorescent
panels—at least in Europe,
In the office, OLED lighting was supposed to offer a favorable option in terms of design
(broad soft lighting, flush with the ceiling), and at attractive price points.
Hope from automotive: But OLED office lighting didn’t happen either and the latest
breakthrough scenario for OLED lighting is supposedly going to be in the automotive
space, with serious adoption in 2016. Osram seems to be pushing this view of the
future of OLED lighting the most, but Konica Minolta also.
Both are working with car firms to make it happen. However, given the previous history
of mass marketing OLED lighting, we are skeptical. Increased attention and emphasis
on niche markets reinforces our view that those larger ones are dragging their feet.
1.1.4 Of Value Shifts and Champions
In the very long run, it seems possible that consumer demand for OLED lighting may
take off, perhaps for unexpected, faddish reasons. But we aren’t seeing that happen;
not even close. If it ever did happen, then manufacturing costs would go down, which
would enable prices to decline too, expanding addressable markets for OLED lighting.

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Another possibility is that OLED lighting might find a champion who would invest in it,
like Samsung has in OLED displays. But we don’t know who that might be. Once, it
could have been Konica Minolta, which placed OLED lighting advertising on CNN—long
before OLED lighting was available. But at the present time, it is hard to come up with a
name of an OLED lighting champion that is more than just speculation,
Given this, we think that the OLED lighting market will look much like it does now for a
few more years to come. That is there will be more fascinating custom installations at
exhibitions and showrooms and high-priced luminaires using OLED lighting technology
will continue to sell at a modest rate, but prices will continue to drop and the retail chain
for OLED lighting will continue to expand.
What we think this will mean is that there will be a distinct shift in where value creation
for the OLED lighting business will occur—there will be a value chain shift to luminaire
makers and to the retail business. Manufacturers will have to focus on precisely that—
on manufacturing. But will this refocusing open up the OLED lighting market to Chinese
competition? We think the answer is yes.
Other scenarios . . . At least, the statement in the previous paragraph seems to be
where we are headed right now. Given the up and down history of OLED lighting, total
market failure for OLED lighting is not impossible. In such a scenario, what we would
expect to happen is that OLED lighting would simply fade away as the manufacturers
pull out of the business one by one.
We believe this scenario is very unlikely to occur, but more delays in OLED lighting cost
and manufacturing goals give us pause to consider worst-case scenarios. It is also
possible that we might see a true OLED lighting boom, but we don’t think that firms in
the OLED space should be counting on this, and they don’t seem to be.
The most likely scenario is basically staying the current course, which is to say slow but
measurable improvements in manufacturing processes, yields, and costs, leading to
volume scale-ups in more of a medium-term timeframe. For the time being, the best
hope for OLED lighting may be to settle into a small- to medium-sized niche in the
overall lighting business. Some revenues and profits can be made; the lighting sector is
vast enough to accommodate all sorts of different products and designs
1.2 Objective and Scope of this Report
In this report, n-tech Research revisits where opportunities for OLED lighting can still be
found, despite the challenges of the past few years. Coverage for this report include all
the major end-user markets on which OLED lighting continues to be targeted. These
comprise:

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 Office/commercial
 Residential/consumer
 Automotive
 Large custom installations
 Outdoor (non-automotive)
This report also provides an assessment of the current strategies of the leading
manufacturers active in the OLED lighting space, and an eight-year (volume and value)
forecast of OLED lighting shipments. As we have already noted, this forecast is based
on a “more of the same” scenario.
This report, and the forecasts included, are intended to be international in scope, and
we have not been geographically selective in the firms covered herein or interviewed to
collect information. Where markets and opportunities are oriented to any particular
region, we note this.
1.3 Methodology of this Report
In this report we have relied on a wide range of information sources. In large part our
research and findings are derived from primary sources, most notably our ongoing
program of interviews with business development managers and technologists involved
in OLED lighting and materials.
Given our years of covering OLED materials and devices, we have also utilized our
previous reports in these and related areas. Where information has been used in an
earlier report it has been reinvestigated, reanalyzed, and reconsidered in light of current
developments and updated accordingly.
In addition, we have also relied upon our own extensive research of secondary sources:
technical literature, relevant company web sites, trade journals, government resources,
and various collateral from trade shows and conferences. We also considered broader
economic developments that may influence the underlying applications markets,
technical developments and improvements, and commercialization.
1.5 Plan of this Report
In Chapter Two we review the progress of OLED lighting from a technology perspective:
the latest on device performance metrics (efficacy, luminance, lifetimes), manufacturing,
and materials.

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Chapter Three updates the emergence of OLED lighting in automotive, viewed as the
first major end-market for OLED lighting. We discuss the best opportunities for market
penetration here, and views and plans of various automakers.
Chapter Four takes us to the meat of the issue: office and commercial lighting, the
technical requirements for OLED lighting and what still needs to be done.
In Chapter Five we shift the discussion to low-cost residential lighting, the other major
potential market for OLED lighting still waiting in the wings.
Chapter Six reviews business opportunities for OLED lighting in two smaller markets, on
opposite timelines: large showcase installations, and outdoor installations, and the
extent that these niches might offer shelter until the larger markets open up.
Chapter Seven summarizes all our forecasts for OLED lighting: by panels, luminaires,
and end markets.

OLED Lighting 2015-2022: Reassessing Markets and Momentum

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OLED Lighting 2015-2022: Reassessing Markets and Momentum