Why Solution Processing May Still Matter in the OLED Industry

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Is there some real value that solution processing can bring to the OLED sector? Or are the firms still dreaming of solution-processed OLEDs merely nostalgic or delusional?

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Why Solution Processing May Still Matter in the OLED Industry

  1. 1. White Paper: Why Solution Processing May Still Matter in the OLED IndustryPublished March 2013
  2. 2. The Short, Sad History of Solution-Processed OLEDsNot that many years ago it seems, solution processing was being touted as the OLED’s future.“Printing” was the way to get OLEDs down in price to where they would become widely used.Indeed, the arguments seemed hard to argue with:  Solution processing is inherently less costly than vapor deposition and easier to scale to Page | 1 larger substrate size. It is also highly compatible with R2R manufacturing; a long-term dream of the industry.  Material waste with solution processing is potentially much lower than in conventional vapor-phase deposition processes. Important when expensive OLED materials are involved.So things should have gone well for solution-processed OLEDs. But they haven’t. Efforts to getprinted polymer OLEDs out of the gate have moved only just slightly beyond the science projectstage. Polymer OLEDs subsist mainly because of the huge resources that Sumitomo can bring tothem. GE promised to be the first in the market with a reasonably priced OLED lighting panelusing solution-processed small molecules. But things don’t seem to have gone well there either.Worse. Samsung has shown up those who once said that solution processing was the only wayto go in the OLED world, by turning the OLED cell phone display into a mass market; indeed theonly OLED mass market to date.And yet, some important firms continue to soldier on with solution processing. DuPont Displays,UDC, Sumitomo, Solvay, and Merck/EMD are all betting on solution deposition for futuregenerations of OLEDs, and are actively developing OLED materials for inkjet printing, wetcoating, nozzle printing, aerosol jet printing, etc.Most are expecting commercialization within the next year to 18 months. So the question has tobe asked, is there some real value that solution processing can bring to the OLED sector? Or arethe firms still dreaming of solution-processed OLEDs merely nostalgic or delusional?Size Matters and So Does Solution ProcessingThe huge success of Samsung’s Galaxy phones with OLED displays has shown that OLEDs cancompete extremely successfully against LCD displays. And ongoing speculation that Apple willalso use OLEDs for iPhones and iPads in the near future shows that OLEDs have nowestablished a level of credibility where such things can be said without being laughed at.This is no mean feat. Various new display technologies have gone into battle against LCDs overthe past few decades and all of them have until now been beaten back. The fact that OLEDshave done so well is remarkable in its way. However, this success remains confined to small- andmedium-sized OLED displays.From the perspective of the OLED materials sector – and as Exhibit 1 shows – this is not so bad.If OLEDs continue to grow in just these small- and medium-area displays, then NanoMarkets’latest forecasts indicate that the market for functional OLED materials (emitter, host, blocking,
  3. 3. transport, and injection materials) will grow from about $380 million in 2013 to a respectable $926million by 2109. Exhibit 1. Market Value of OLED Materials in Small & Page | 2 Medium Displays 2013-2019 ($ Millions) 1,000 800 600 400 200 0 2013 2014 2015 2016 2017 2018 2019 Year © NanoMarkets 2013Such numbers speak to the structure of the OLED materials sector going forward. There isenough here to interest firms such as BASF, DuPont, Merck, which are chasing after this marketright now. But NanoMarkets believes that these firms are motivated by the possibility that OLEDpanels – both for lighting and for displays – could be a lot larger than they are now.In Exhibit 2 we bring OLED TVs and OLED lighting into the forecasts, based on what we think is aplausible scenario for their deployment. OLED TVs have been demonstrated for at least fiveyears and have seen limited sales. They offer vibrant colors and an ultra-thin form factor. Butthese TVs are also extraordinarily expensive. Meanwhile, large OLED lighting OLED panels seemto be essential to bringing OLEDs into mainstream office lighting; crucial if OLED lighting is evergoing to take off.Based on our assumptions – and as shown in Exhibit 2 – when one includes both OLED TVs andOLED lighting, the value of the market jumps to about $1.8 billion by 2019, or twice the size of thematerials market when only small and medium OLED displays are included. Beyond 2019, thesuccess of large-panel OLEDs would mean a dramatically enhanced business opportunity forOLED material suppliers.
  4. 4. Exhibit 2. Market Value of OLED Materials in All Displays and Lighting Applications 2013-2019 ($ Millions) 2,000 1,500 Page | 3 1,000 500 0 2013 2014 2015 2016 2017 2018 2019 Year © NanoMarkets 2013If large OLED panels can be created with a process that offers reasonable yields, then largerevenues are the result. So size matters in two senses. The important thing to recognize here isthat NanoMarkets’ projections are not based on exceptionally high expectations: Very modestpenetration rates of the TV and lighting sectors will translate into big gains in addressable marketsfor OLED materials suppliers.Could solution processing prove the key enabling technology that gets the materials industry tothose modest gains?Cost-Effective ScalabilityNanoMarkets’ forecasts, portrayed in the Exhibits above, are also based on an assumption thatOLEDs can be made to demonstrate cost-effective scalability. If this cannot be achieved thenOLED TVs and OLED lighting will never become mainstream consumer items.One small defect can cause an entire large panel to fail, after all, and low yields guarantee that noone can make money on large OLEDs without charging exorbitantly high prices. As proof that weare still a long way from the goal here, consider what follows.OLED TVs: LG currently sells 55” OLED TVs at about $10,000 to $15,000 each in severalmarkets and is planning to expand into additional markets over the next twelve months.Meanwhile, Samsung is still saying that it will launch its own 55” OLED TV product late this yearor early next, and Panasonic, Sony, Seiko Epson, and AUO are all planning to enter the OLED TVmarket soon.TVs that cost upwards of $10,000 each are clearly out of reach of the average consumer. Forcomparison, an average smart 55” LCD TV costs around $1,500 - $2,000. So even if OLEDs aresold at a premium based on their status as the “latest-greatest” technology, prices need to comedown by a 5x factor. To date, however, low manufacturing yields in conventional vapor depositionprocesses are keeping costs (and prices) high.
  5. 5. Office lighting: The U.S. Department of Energy, estimates that OLED lighting is currently about10 times too expensive to compete widely in general illumination in the workplace.Cost reductions might be achieved by moving to higher generation production lines, althoughlarger manufacturing facilities require investment by pioneering firms willing to take the risk. Sofar, only LG has really committed to building a full-scale plant for larger-area panels; LG is Page | 4spending $650 million on a Gen-8 WOLED TV line, and the firm could use this line to accelerateprogress on its efforts toward making larger-area OLED lighting panels as well.But materials suppliers can enable cost reductions, too: organic layer formulations could be mademore stable and easier to deposit in uniform layers, cost-effective high performanceencapsulation systems would reduce yield losses; and more conductive, transparent electrodescould reduce brightness non-uniformity and resistive loss (heating), especially in OLED lightingpanels.Solution Processing to the Rescue?While any number of materials and manufacturing improvements could get the OLED industrypart of the way to where it needs to be with regard to large panels, NanoMarkets believes that amajor part of the manufacturing strategy that will get the OLED industry to the high-end revenuescenario that we show in Exhibit 2 will involve solution processing. The point here is that we thinkthere is enough in the old solution processing story to make this technology. Or in differentwords, solution processing may not have gotten us that far to date, but the problems associatedwith it can be fixed and are worth fixing.Apart from purely technical considerations, one reason for being optimistic about solutionprocessing’s future role in the OLED sector is that when NanoMarkets analyzed what was goingon in solution processed OLEDs, we found a lot more than just collapsing research programsfrom a decade ago; although there were those too. But there are also some bright new solutionprocessing technologies that, we believe, will bring solution processing to the fore in the OLEDsector in just a few years. And these newer programs are being masterminded – and paid for –by firms with deep pockets.Thus, DuPont is known to be working with Samsung on solution processing for OLED TVs,although their timeline for commercialization is unknown. However, at least one panel maker –Pioneer, in partnership with Mitsubishi’s Verbatim brand – is planning to commercialize OLEDlighting panels made using solution processing in 2014. If successful, this team will be the first tomarket and may be the one that does what GE was unable to do. If Pioneer succeeds in thisregard, it is even just possible that GE may jump back into the game.Given this, NanoMarkets believes that, eventually, a shift from conventional vapor-depositiontechnology toward solution processing is highly likely with solution processing eventually takingup a sizeable share of the OLED market. (See Exhibit 3.). Should this scenario pan out, weanticipate that revenues from solution-processable OLED functional materials will grow fromabout $50 million this year to well over $800 million by 2019.
  6. 6. Exhibit 3 Comparison of Market Share of Vapor-Deposited vs. Solution-Processed OLEDMaterials in 2015 and 2019 (Value Basis) Page | 5 26% 47% 53% 74% Vapor-Deposition 2015 2019 Solution-Processing © NanoMarkets 2013The contents of this paper were drawn from NanoMarkets on-going coverage of the OLEDmaterials business. See more at www.nanomarkets.net/oleds

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