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OLED Materials Markets: 2015-2022: Momentum and Opportunities

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n-tech has covered the OLED materials space for eight years, and we have watched expectations for this market swing backwards and forwards. For the moment there seems to be rising demand for OLED phones and tablets, but the short-term picture remains uncertain for OLED lighting and OLED TV panels. An old debate that shows no sign of going away is whether OLED materials can be effectively solution-processed. New issues are emerging and will help shape the OLED materials business, such as being “green” and avoiding rare and costly materials in what are often price-sensitive markets.

Perhaps the most interesting aspect of the OLED materials market is how the structure of the industry is changing. With all the uncertainties and captive markets, do newer companies in this space stand a chance? What will happen to the established suppliers in Japan who have been around since the days when “OLED” meant PM OLED?

This new report provides answers to all these questions. As with all n-tech reports, we include detailed volume and revenue forecasts, broken out by application, material type, functionality, and deposition method. We also examine the core strategies of leading players in the OLED materials space.
- See more at: http://ntechresearch.com/market_reports/oled-materials-markets-2015-2022-momentum-and-opportunities

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OLED Materials Markets: 2015-2022: Momentum and Opportunities

  1. 1. n-tech Research Report OLED Materials Markets: 2015-2022: Momentum and Opportunities Issue date: June 22, 2015 Report number: Nano-833 n-tech Research PO Box 3840 Glen Allen, VA 23058 Phone: 804-938-0030 Email: info@ntechresearch.com
  2. 2. n-tech Research PO Box 3840 Glen Allen, VA 23058 Phone: 804-938-0030 n-tech Research PO Box 3840 Glen Allen, VA 23058 Phone: 804-938-0030 Email: info@ntechresearch.com Web: www.ntechresearch.com Page | 1 OLED Materials Markets: 2015–2022: Momentum and Opportunities Report Description n-tech has covered the OLED materials space for eight years, and we have watched expectations for this market swing backwards and forwards. For the moment there seems to be rising demand for OLED phones and tablets, but the short-term picture remains uncertain for OLED lighting and OLED TV panels. An old debate that shows no sign of going away is whether OLED materials can be effectively solution-processed. New issues are emerging and will help shape the OLED materials business, such as being “green” and avoiding rare and costly materials in what are often price-sensitive markets. Perhaps the most interesting aspect of the OLED materials market is how the structure of the industry is changing. With all the uncertainties and captive markets, do newer companies in this space stand a chance? What will happen to the established suppliers in Japan who have been around since the days when “OLED” meant PM OLED? This new report provides answers to all these questions. As with all n-tech reports, we include detailed volume and revenue forecasts, broken out by application, material type, functionality, and deposition method. We also examine the core strategies of leading players in the OLED materials space. TABLE OF CONTENTS Executive Summary E.1 Changes in the OLED Materials Market in the Past Year E.1.1 Technology Changes and Issues to Solve E.1.2 Market and Supply Chain Changes E.2 Are There Still Market Opportunities in the OLED Materials Space? E.3 Key Companies to Watch E.4 Summary of Eight-Year Forecasts for OLED Materials Chapter One: Introduction 1.1 Background to this Report 1.2 Objective and Scope of this Report 1.3 Plan of this Report Chapter Two: Markets for OLED Materials: Awaiting News on TVs and Lighting 2.1 Small and Medium Displays: A Reliable Market for OLED Materials 2.2 What OLED TV’s Success Would Mean for the OLED Materials Business 2.3 OLED Materials and the Future of OLED Lighting 2.4 Automotive OLED Lighting: What Materials Should Expect 2.5 Will Wearables be the Next Market for OLEDs? Implications for OLED Materials 2.6 Key Points from this Chapter
  3. 3. n-tech Research PO Box 3840 Glen Allen, VA 23058 Phone: 804-938-0030 n-tech Research PO Box 3840 Glen Allen, VA 23058 Phone: 804-938-0030 Email: info@ntechresearch.com Web: www.ntechresearch.com Page | 2 Chapter Three: Trends Shaping the OLED Materials Market 3.1 New Trends in the Emissive Layer: Commercial Implications 3.1.1 Blue: The Neverending Story 3.2 Other Trends in the OLED Stack: Commercial Implications for Materials 3.3 Eliminating Iridium and Other Environmental Issues 3.4 Flexible OLEDs are Real: So What is the Future of Encapsulation? 3.5 Will Ever OLEDs Move Past ITO? 3.6 Solution Processing for OLEDs: If Not Now When? 3.7 Key Points from this Chapter Chapter Four: Evolution of the OLED Supply Chain 4.1 The Future of Traditional Japanese OLED Materials Suppliers 4.2 UDC in Next Decade 4.3 The Samsung Materials Supply Chain 4.3.1 A New Role for Novaled 4.4 The LG Materials Supply Chain 4.5 If Apple Goes OLED Who Will Supply Its Materials? 4.6 Can OLED Materials Startups Succeed? 4.7 China Changes Everything 4.8 Key Points from this Chapter Chapter Five: OLED Materials and Market Forecasts 5.1 Forecasting Methodology and Assumptions 5.1.1 Changes from Last Year's Forecast 5.1.2 Pricing Assumptions 5.1.3 General Economic Assumptions 5.2 Panel Area Forecasts for OLED Panels by Application: Displays and Lighting 5.3 Eight-Year Forecasts of OLED Emissive Layer Materials 5.4 Eight-Year Forecasts of Electron Transport Materials 5.5 Eight-Year Forecasts of Hole Transport, Hole Blocking, and Electron Blocking Materials 5.6 Eight-Year Forecasts of Hole Injection Layer Materials 5.7 Eight-Year Forecasts of Electrode Materials in OLEDs 5.8 Eight-Year Forecasts of OLED Encapsulation 5.9 Eight-Year Forecasts of Substrates in OLEDs 5.10 Summary of Eight-Year Forecasts of OLED Materials 5.10.1 Breakout by type of manufacturing Related Reports: OLED Lighting 2015-2022: Reassessing Markets and Momentum OLED Materials Markets – 2014
  4. 4. n-tech Research PO Box 3840 Glen Allen, VA 23058 Phone: 804-938-0030 n-tech Research PO Box 3840 Glen Allen, VA 23058 Phone: 804-938-0030 Email: info@ntechresearch.com Web: www.ntechresearch.com Page | 3 Chapter One: Introduction 1.1 Background to this Report n-tech has provided coverage of the OLED materials space for eight years. We have watched expectations for this market swing forwards and backwards, in step with back- and-forth projections for the broader market for OLED panels. Current emitters generally provide good enough performance for both displays and lighting, though of course longer lifetimes and improved color profiles would always be better. Presumably these could command premium pricing, helping offset the continued pricing pressures on OLED materials. The exception remains blue emitters, as usual, and the search for a better (deeper) blue emitter continues. This year we are seeing many of the same trends that we have seen before but with some positive developments on the addressable market front (wearables and fewer uncertainties about the OLED lighting market), and the emergence of new technical trends in materials that are often appearing from smaller firms that are not yet big names in the OLED business. 1.1.1 Addressable Markets for OLED Materials Expand The past eighteen months has seen the addressable markets for OLED materials expand as the OLED trend outside of the established Samsung phones has expanded. Tablets with OLEDs are showing up too, from Samsung and from others using Samsung panels (Dell). In the near future we expect new suppliers of OLED devices – and OLED materials – to emerge out of China. Wearables: More interestingly, wearable devices with OLEDs are emerging, primarily smart watches. Large volumes of them would spell good news for OLED materials, but that's far from certain—though having the iWatch use an OLED is an encouraging sign. Although materials use by individual wearable devices is tiny, volume shipments of these devices could eventually be huge. Important to remember that not all wearables need a display – but smart watches and smart glasses do. Recent estimates suggest somewhere just under 5 million shipments for all smart watches in 2014, with added speculation of as many as 15 million iWatch shipments in 2015. For now, OLED-based wearables are a tiny market in volume terms and the size of the displays is very small. However, the volumes may increase dramatically over the next few years. There is at least a chance that wearables may provide a significant opportunity for the OLED materials sector going forward. And it is the only addressable market for OLED materials that is genuinely new.
  5. 5. n-tech Research PO Box 3840 Glen Allen, VA 23058 Phone: 804-938-0030 n-tech Research PO Box 3840 Glen Allen, VA 23058 Phone: 804-938-0030 Email: info@ntechresearch.com Web: www.ntechresearch.com Page | 4 Lighting: Meanwhile, the OLED lighting sector is seeing some stability, although the once high hopes for OLED-based general illumination have cooled. Some recent highlights from the OLED lighting front include LG Chem beginning mass production of large (320x320mm) OLED lighting panels and Konica Minolta successfully deploying the largest OLED lighting installation, a massive 15,000 panel project at a Japanese tulip festival. OLED lights are now available at Home Depot and both BMW and Audi are planning OLED lighting in new cars within the next 18 months All this suggests to n-tech Research that there is enough opportunity in OLED lighting for OLED materials makers to treat it seriously. While better yields and production processes are frequently cited as the main areas of focus, there are contributions that can come from the materials side as well. One is emitters optimized for lighting, since the requirements for OLED lighting can be significantly different for what is needed for displays. TVs: We are less certain about the OLED TV business. If it takes off, then it will consume large amounts of OLED materials. Prices for these very expensive displays are coming down, but no one can yet be sure whether OLED TVs will be able to compete with LCD TVs. If OLED TVs eventually follow plasma displays into oblivion, it would not be a huge shock to many in the TV business. Nonetheless, we think that there is an incentive to work with LG (and eventually Samsung) to supply materials for OLED TVs that can help improve yields and lower costs, with longer lifetimes, better color fidelity, and thinner profiles. Note: LG's OLED TVs use a white emitter and color filter, while Samsung has focused on "true" RGB OLED. This debate has yet to be settled, whether the latter has shown enough improvements to be ready for TVs. 1.1.2 Solution Processing, The Siren Song Another old debate in the OLED materials space that shows no sign of going away is whether OLED materials can be effectively solution-processed. For about fifteen years this was supposed to be the way that OLEDs were going to make it to a price performance level that would allow them to reach a highly attractive price/performance ratio; but this has yet to happen and the debate goes on. Some believe solution-based processes and R2R need to be brought along more quickly. Supporters of solution processing have always cited flexible panels as one justification, but for the first time flexible and curved OLED displays are actually a market reality. Advantage, solution-processing. Names to watch here include Kateeva, Seiko Epson, DuPont, and Mitsubishi.
  6. 6. n-tech Research PO Box 3840 Glen Allen, VA 23058 Phone: 804-938-0030 n-tech Research PO Box 3840 Glen Allen, VA 23058 Phone: 804-938-0030 Email: info@ntechresearch.com Web: www.ntechresearch.com Page | 5 But not everyone thinks a move to solution-based processing is necessary. It would lower capital equipment costs, for sure, but those would be mitigated by more costs on the component side, so the argument goes. Moreover, there is also an argument that TAKT times are impacted by solvent drying times. Better to focus on improving yields and TAKT times in vacuum-based processes, or so it is argued by some. Incidentally, it is not just the organic stack that is part of this story. Truly flexible displays would not be able to use ITO (although curved ones can), so solution-processed transparent conductors for OLEDs would get a boost from the shift to flexibility. 1.2.2 Finding Room to Maneuver: Three's Company UDC has a dominant position in phosphorescent emitters, and has secured new partnerships to try and extend its position even further—notably with LG in displays, and Sumitomo and OLEDWorks in lighting. The firm likely will extend its current deal with Samsung before it runs out in 2017, and arguably with some leverage having LG as a partner now. Novaled, meanwhile, is adjusting to life under the Samsung umbrella; its acquisition by Cheil was one of the big newsmakers of 2014. As was expected, Cheil/Novaled apparently has taken UDC's phosphorescent green host business at Samsung. Novaled is still supposed to be quasi-independent from Samsung, although it would be hardly surprising if Samsung's competitors were wary of dealing with Novaled given this relationship. Other large OLED materials suppliers remain in good standing with either Samsung or LG (or both): Dow, DuPont, BASF, Merck, LG Chem, etc. There are also the longtime OLED materials suppliers out of Japan: Idemitsu Kosan, Nippon Steel, Konica Minolta, Sumitomo Chem and Mitsubishi Chem. These firms began as suppliers to the PM OLED business and they will have to adopt new strategies in the future. Most interestingly, there are hungry new entrants into this sector that see ways to compete with new technologies, new and better emitters for example. Cynora, for example, is developing iridium-free OLED materials, chiefly green and red phosphorescent emitters (putting them in competition with UDC), as well as a stable blue emitter. As n-tech sees it, the interplay between these three groupings of suppliers is perhaps the most interesting aspect of the OLED materials market at the present time. It is still unclear to us whether given all the uncertainties and captive markets that are characteristic of the OLED market right now, the newer companies in this space stand a chance of success.
  7. 7. n-tech Research PO Box 3840 Glen Allen, VA 23058 Phone: 804-938-0030 n-tech Research PO Box 3840 Glen Allen, VA 23058 Phone: 804-938-0030 Email: info@ntechresearch.com Web: www.ntechresearch.com Page | 6 At the same time, new issues are beginning to emerge that will help shape the OLED materials business in the future and it is possible that some company not prominent now will be able to leverage one or more of these issues as a path to the top. The need to be “green” is one such consideration, as is the need to stay away from rare materials (namely iridium). There is also the annoying and perennial issue of encapsulation, which has come to fore again with the flexible OLED panel issue. This issue. Here we note that Corning is back in the picture with its flexible glass, at least for OLED lighting, but also that OLED encapsulation has buried companies in the past. 1.3 Objective and Scope of this Report In this report, n-tech Research identifies the opportunities in the OLED materials business. We also examine the core strategies of leading players in the OLED materials space, including technology differentiation and key partnerships. As always, we include detailed volume and eight-year revenue forecasts, broken out by application, material type, functionality, and deposition method (where possible and appropriate). Forecasts for OLED panel area are derived from estimates and projections of OLED shipments and manufacturing capacity, and how these will likely translate into materials requirements. 1.4 Methodology of this Report This report is based on n-tech Research's ongoing industry research in OLEDs and OLED materials, which includes ongoing discussions with key players throughout the OLED community. We have also utilized our previous reports in these and related areas. Where information is used from an earlier report it has been reinvestigated, reanalyzed, and reconsidered in light of current developments and updated accordingly. We also have relied upon our own extensive research of secondary sources: technical literature, trade journals, press articles, SEC filings and other corporate literature, government resources, and various collateral from trade shows and conferences. In addition, we considered broader economic developments that may influence the underlying applications markets, technical developments and improvements, and commercialization. This report is entirely international in scope. The forecasts are worldwide forecasts and we have not been geographically selective in the firms that we have covered in the report or interviewed in order to collect information.
  8. 8. n-tech Research PO Box 3840 Glen Allen, VA 23058 Phone: 804-938-0030 n-tech Research PO Box 3840 Glen Allen, VA 23058 Phone: 804-938-0030 Email: info@ntechresearch.com Web: www.ntechresearch.com Page | 7 1.5 Plan of this Report In Chapter Two we explore recent trends and changes in the various applications for OLEDs: displays (small/medium, very small, and large) and lighting. Chapter Three looks at technology trends that are shaping the OLED materials market, both in the OLED stack and in other areas: substrates, encapsulation, and manufacturing processes. In Chapter Four we analyze the current state of the OLED supply chain. As briefly mentioned above, we review who's working with whom, and where the challenges and opportunities are. In Chapter Five we lay out all our forecasts for OLED materials with breakouts by application, layer functionality, and type of material, from the substrate and emissive layer to encapsulation technologies.

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