Investment Opportunities in the OLED Encapsulation Business
26 Oct 2011 • by Natalie Aster
After many years of languishing, OLEDs have finally emerged as a real market, and the opportunities for growth are great, especially for firms that can offer encapsulation technologies with tangible performance and cost benefits over the market-dominant cover glass strategies in use today.
The biggest growth sectors for OLEDs are in larger-format panels, both in OLED TV displays and, even more importantly, in OLED lighting. Therefore, the total addressable area for OLED encapsulation is set to expand greatly as these markets grow, which will lead to higher volumes for materials suppliers.
In the highest growth markets—OLED TVs and OLED lighting—requirements for encapsulation barrier performance are greater than found in the smaller displays on the market today. As a result, the opportunities are greater for firms to differentiate themselves and gain market share based on encapsulation that enables better lifetime performance.
NanoMarkets believes that there are some potential areas where new or additional investment might be justified:
- Multilayer, or better yet, single layer, laminates that actually deliver on the promise of low cost manufacturing using polymers and polymeric substrates without sacrificing barrier performance.
- Truly flexible OLEDs, which would require truly flexible encapsulation, are still far in the future, but there is real opportunity to expand the capabilities of OLED devices by offering partially bendable or conformable encapsulation options. If partial flexibility is all that is really required, then there are probably already several dyad and similar technologies available today that just need a slight nudge to get them into the market.
- Flexible glass should not be ignored. The performance benefits of glass are simply too great to overlook. And since glass manufacturing costs are closely linked to weight, thin flexible glass may be able to reduce costs even more that might be expected at first glance. Furthermore, since truly flexible OLEDs seem to be perpetually several years away from commercialization, the partial, yet real, flexibility of thin, flexible glass may be just what is needed for larger format, high volume OLED manufacturing of OLED TVs and OLED lighting.
Markets for OLED Encapsulation Materials - 2011
Published: October 2011
Price: US$ 2,495.00
From where will the investment originate? NanoMarkets does not anticipate any new outside investment in cover glass encapsulation. Instead, NanoMarkets expects that the major glass companies—Asahi Glass, NEG, Corning, etc.—will continue to dominate cover glass technology improvements through offerings like air-gap free or frit-sealed covers. There is just no compelling reason for any new firms to enter. The expertise within the glass industry is extensive, the competition among them is already fierce, and all the major firms have broad, active R&D programs aimed at new sectors like OLEDs.
However, there may be significant opportunities for productive outside investment in non-glass encapsulation. There are several factors that will positively impact investment in non-traditional technologies:
- Clearly, investors will only act if they believe that the OLED market will grow well beyond its size today. Fortunately, the indications are that it will. OLEDs in smartphones are taking off, with Samsung leading the way; OLED TVs are expected to finally be widely available in the very near term; and OLED lighting is poised to grow to be the largest addressable market of all. And all of these markets could benefit from encapsulation technologies that improve barrier performance while also reducing costs associated with heavy, batch process cover glass.
- Although investors are attracted to companies with demonstrated sales, which are hard to come by at this point, they may also be attracted to technologies that demonstrate big performance advantages with the promise of large investment gains down the road. As NanoMarkets has already noted, non-glass encapsulation strategies based on low-cost, R2R-compatible barrier laminates could gain significant market share in the mid- to long-term. The growth sectors for OLEDs in TV displays and in lighting will both rely on high volume manufacturing to realize economies of scale sufficient to bring costs down to levels that support truly widespread consumer adoption, and R2R production would clearly be a step in this direction.
- Since the barrier performance requirements in OLED encapsulation are stricter than in almost any other sector, the addressable market is even larger than it seems at first glance. Of particular interest is the photovoltaics industry, which is itself in an upward growth trajectory, and which significantly expands the market for encapsulation. Investors can capitalize on this expanding market as way to leverage their specific technology across two industries—one which is "easier" (photovoltaics) and the other which is perhaps more of a stretch initially (OLEDs).
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