To date, the history of thin-film and printed batteries has not been an entirely happy one. Both RFIDs and medical/cosmetic patches have failed to live up to the “killer app” expectations of the thin battery sector. And there are now perhaps 40 percent fewer firms making thin batteries than there was when NanoMarkets started covering this sector.
In this environment, one might be forgiven for condemning thin batteries as a technology in search of an application. And even if one considers smart cards, the one area where thin batteries have achieved some traction, it is hard to think of the battery firms creating large amounts of value. A CEO of a thin battery firm seeking that IPO down the road doesn’t have much to hang his or her hat on.
But although still in the making, NanoMarkets points to wearable and flexible products as well as devices connected to the “Internet-of-Things” that potentially offer a large market for thin batteries going forward; big enough to make the whole thin battery opportunity much more worth pursuing than ever before.
If this proves to be the case, the disappointments around RFID, patches and the like can be forgotten. These new wearable and flexible and “IoT”-oriented products could well give the market for printed and thin-film batteries a new lease on life.
The Thin-Film/Printed Battery Sector is in a Validation Phase
The thin-film/printed battery industry has realized for quite some time that these batteries can never compete with conventional batteries in applications that do not have the constraints of size and shape or accessibility (where frequent replacing or recharging of batteries is not possible). Thin battery technology is meant to fill the gap created by conventional energy storage devices that are unable to keep pace with the demanding size and high density power requirements of some of today’s highly advanced electronic devices.
With this situation in mind, thin-film/printed battery firms have spent the last few years pursuing various types of applications with the hope that something would stick. In some cases—and not always successfully—the battery firms have tried to develop their own applications. But much of the time, they have realized that partnering with OEMs to build an ecosystem of complementary vendors is essential to accelerate delivery of end products and create a steady market for thin batteries.
In addition, effort needs to be put into the simplification of the manufacturing process, reduction of costs, and thus the creation of the scale and quality that is required to drive this market. If the printed/thin-film battery sector is finally to succeed, we will have to see some significant financing in 2014, and perhaps some announcements of new manufacturing approaches.
An example here is Solicore’s 2103 announcement that it has developed the world’s first digitally printed thin-film lithium battery. This development aims to establish the necessary capacity to support the important markets, such as powered cards, medical patches, and powered RFIDs/sensors. It is also expected to cater to a variety of custom designs to meet the varying needs of the marketplace.
Smart windows—which we take here to mean self-dimming or self-tinting windows—are first and foremost materials plays. At every level of the value chain the business opportunities presented by smart windows are dependent on the specific smart materials on which the windows' functionality is based. For example, smart glass based on PDLC technology never quite becomes transparent; so this technology is primarily used for privacy glass.
Smart glass is already extensively used for self-dimming auto mirrors, but has not yet been found in windows to any great extent. OEMs in the building products and automotive sectors that have needed tinted glass for windows have mostly adopted a non-smart (i.e., non-dynamic) solution; either coating window glass with a tinted material or laminating a tinted film to the glass. These materials are low-cost, but have fixed performance levels; their transmission/blocking of light never changes. Eastman Chemical, which claims to be the leading manufacturing company offering retrofit window films, continues to see its film business as a source of growth, according to its recent annual report.
Smart windows may eat into the retrofit film business, but NanoMarkets has no expectations that the retrofit windows business is in any danger of going away. What we do think is that the smart windows business will grow out of its current niche-like status. And as it does so, materials selection will play a key role in determining which smart windows technologies will do best.
The reason for NanoMarkets being bullish on smart windows in this sense is primarily our belief that there are widespread consumer expectations that the real price of energy will continue to rise for years to come. This will promote the sales of products that promote energy savings; smart windows being one such product type. Buildings need smart windows to comply with LEED or zero-energy requirements. Automobiles adopt smart windows to keep interiors cool and cut down on the need for air-conditioning on sunny days, while letting as much light as possible through on gloomy ones.
We expect these novel market drivers for smart windows to combine with more traditional ones—especially the need to reduce glare in the summer while not obscuring visibility in the winter. But the new market drivers for smart windows based on energy prices, NanoMarkets believes, will help grow the smart windows business dramatically.
As NanoMarkets sees it, electrochromic materials have already staked out an enviable position in the emergent smart windows sector. What we are seeing here is a list of factors that combine to position electrochromic materials as the materials of choice for smart windows in many instances. These factors include:
• Low technological risk. Electrochromic materials are already widely used in auto mirrors, so much is already understood about their performance and capabilities
• Potentially low cost. Electrochromic windows are fabricated with such non-exotic materials such as conductive polymers and metal oxides. Nonetheless, prices of electrochromic windows remain high at this point in time reflecting the early stage of the self-dimming windows market.
• Long product life. Metal oxides are also not easily degraded by light, adding to the life of the window; lifetimes being an obviously important factor for any building product.
• Low power requirements. Although smart windows based on electrochromic materials need to be powered, this is not a major drawback. According to NREL, powering 1,500 square feet of color-changing glass (about 100 windows) would require less power than a 75-watt light bulb.
At least four companies are actively pursuing the development of electrochromic windows, Sage, View, Chromogenics and US e-Chromic. At least two of these companies—Sage and View—are already shipping and both have access to extensive marketing and financial resources.
Sage is especially to be watched because it is now part of the Saint-Gobain group and can muster both the money and the supply channel strength that being part of a huge multinational offers it. In fact, Sage had been well funded even before it was fully acquired by Saint-Gobain and it continues to announce new customers on a frequent basis. View (which used to be Soladigm) also has some customers, as well as investment that includes money from Corning and GE. View also has an alliance with Corning that NanoMarkets believes will help View move forward both technically and at the marketing/supply chain level.
We think that another company worth watching is Gentex, which dominates the electrochromic self-dimming mirror space. Gentex's electrochromic technology is not completely suited to smart windows. But Gentex is a large company that has already made windows for airliners. So, if the smart windows market grows fast, Gentex's entry would not be a complete surprise.
The construction, automotive and aerospace industries combined will spend around $2.0 billion in 2013 for glass and film that prevents too much light being transmitted or reflected. The reasons why someone would need materials of this kind are easy to understand. Avoidance of glare is critical to this market, but so is energy efficiency, and temperature control.
We think this aggregate market number is accurate, but acknowledge that it might be somewhat confusing. It includes both what we might call “dumb glass,” as well as the smart kind. By dumb glass we simply mean films and coatings that filter out light. Smart windows by contrast adapts to the sunlight level either by virtue of a smart coating that changes with the level of light (passive smart windows) or through direct electrical control (active smart windows). In the case of active smart windows, the control might come directly from a building automation system.
Many of the smart windows technologies are not especially new. What has suddenly given them some glamor is that the rising real price of energy is increasing the ROI of smart windows deployment, while at the same time smart windows fit perfectly with the growing interest in LEED and zero-energy buildings.
For smart windows to replace dumb ones, they are going to have to achieve improved price points. And the business models adopted by smart windows suppliers are going to have to recognize where the opportunities are and where they are not.
The Smart Windows Opportunity: Not as Big as it Seems?
Most of the revenue included in NanoMarkets’ $2.0 billion estimate given above could not really be called an opportunity in the usual sense of that word. Around $550 million comes from conventional window film. We expect that market to grow slowly – 5 to 6 percent each year through this decade. It is already a low-margin business, dominated by established suppliers. Not a land of opportunity for newcomers this.
Nor is window film “smart” in the sense that the smart windows sector uses this term, it does not respond dynamically to changes in light conditions either as the result of the chemical nature of the coating or film used, or because an on/off switch can be flipped. Glass that is “smart” in this sense currently uses one (or more) of the following technologies: thermochromic, photochromic, electrochromic, SPD or PDLC.
While all these technologies are included in our global $2.0 billion number and they are genuinely “smart,” NanoMarkets cautions that not all of them are areas worthy of commercial pursuit.
• In particular, included in these numbers are self-dimming automotive mirrors, most of which come from Gentex. Gentex claims an 88 percent share of the self-diming mirror market and this firm has dominated this part of the smart glass market for many years. For this reason alone, self-dimming auto mirrors do not seem a good place to invest for a new entrant. Nonetheless, we think these mirrors represent 30 to 35 percent of the smart windows market.
• Then there is PDLC. This is also a genuine smart glass technology and perhaps one that presents a good future for existing and future suppliers, but it is limited in applicability mainly to privacy glass, because it is does not offer enough transmissivity to serve as a substitute for regular windows. There is definitely a market for smart privacy glass, and not just in James Bond movies, but it is a market separate and different from which most smart glass makers are targeting
Where the Opportunities Are
Kicking out the technologies listed above, one is left with a general “opportunity space” worth around $350 million consisting of electrochromic glass, and several different kinds of films (electrochromic, thermochromic, photochromic and SDP). Some of these technologies have excellent growth prospects – we have estimated a CAGR of around 30 percent for electrochromic film, for example.
However, all of these technologies are chasing after the same markets to a large extent, so it makes considerable sense to benchmark them against each other, which we do in the exhibit below. While a discussion with any of the fine purveyors of smart windows will leave one convinced that their particular flavor of smart windows technology is the way to go, there doesn’t seem to be that much difference between the smart windows technologies. That is to say, there is nothing that jumps out that we can see that says one smart windows technology is going to be a winner or a losers.
Price, of course, does make a difference; especially when one considers the potential for residential market sales over time (which is considerable) and there does seem to be a view in the market that electrochromic technology may do especially well, because of its ability to lower prices over time. However, NanoMarkets expect that – in the final analysis -- what really may stand between success and failure in the smart windows market may be supply chain strength; or what is today sometimes referred to as a strong business ecosystem.
The Vital Ecosystem
Glass firms are taking a considerable and understandable interest in the smart windows business and some of the biggest – AGC and Corning, for example – have been doing R&D in this field. However, at present most of the innovative work in smart windows seems to be coming out of smaller firms.
The obvious strategy in such circumstances is for these small technology providers to form alliances with the big glass firms. But the nature of these alliances – what works best – has yet to be determined. Some possible business models are evolving, however, and more will evolve and develop.
There is already some of this going on; PPG and Pleotint are technical partners, for example. And Saint-Gobain now owns Sage, the strongest possible alliance. This could give these smaller smart windows firms a presence in supply chains that are long established and well-funded; supply chains that they could never have created for themselves.
There will be more technical alliances, mergers and acquisitions. That’s for sure. But we also note that a licensing model can be very effective. The case in point here is Research Frontiers which licenses its SPD technology to a huge range of firms. The downside, of course, is that its revenues consist entirely of licensing fees. It’s hard to build a big business that way, but then again, in another industry, ARM did exactly that.
RFI’s SPD technology is currently manufactured exclusively by Hitachi Chemical which has at least 400,000 square meters of production capacity in place. This would be the equivalent of perhaps $200 million in SPD glass shipped if the plant was working at full capacity and firms other than Hitachi Chemical are beginning to manufacture SPD glass too.
While only some of the value created by RFI’s technology will be returned to Hitachi, this means that Hitachi has enough confidence to believe that SPD – currently regarded as something of a niche -- will emerge someday as one of the most successful smart windows technologies.
In the past, medical ceramics were represented by ceramic and clay implants that remained inert in the host and acted as scaffolds or supports. Today, the scenario has changed remarkably due to the introduction of an entirely new generation of bioceramics. These implants are, amazingly, structurally and functionally compatible with living tissue in the human body and contribute to the development of new tissue. Over the past two decades, there has been tremendous improvement in the performance of these bioceramics, and technology advances have created a very huge market for ceramics in the medical sector.
The two key markets for medical ceramics are:
• Implantable bioceramics, which consist of medical devices and implants that are on the market as tooth and bone replacements. Bone and joint replacements are essentially metal and ceramic composites, whereas dental implants are mostly made of all-ceramic systems. Bioceramics are a huge success as implantable materials because they are bioactive in their natural compositions and can be fabricated into various composites with metals, both natural and synthetic polymers, carbon fibers, and most recently, carbon nanotubes.
• Medical equipment, including analytical and scientific instrumentation; ceramics are primarily used in analytical, diagnostic, vision, and therapy systems.
Although there are a few risks and ambiguities regarding the use of implants and medical devices based on ceramics, NanoMarkets certainly believes that the market for implantable bioceramics will continue to grow in the future. This growth can possibly be converted into profitable businesses by the companies manufacturing the medical ceramic devices and the firms that supply the necessary raw materials.
Implantable Bioceramics Market Dominated by Tooth and Bone Replacements
Biocompatibility and resistance to wear have made ceramic materials ideal for a range of medical applications, from artificial joints to electronic sensors, stimulators, and drug delivery devices. Alumina and zirconia, among other ceramics, have been successful in withstanding the hostile environment of the human body. The implantable bioceramics market primarily consists of two segments: tooth and bone replacements.
Dental implants: The dental consumables segment includes crowns/bridges, implants, orthodontics, impressive materials, composites, endodontics, adhesives, and cements, while the dental equipment segment is composed of large equipment, such as autoclaves, sterilizers, chairs, communication systems, compressors, cuspidors, and digital imaging systems. Small equipment, including amalgam removal systems, amalgamators, hand piece cleaners, lab equipment, duplicators, and ultrasonic cleaners, also fall into this product segment.
The leading multinational manufacturers account for approximately two-thirds of the global implant market and pursue premium strategies. The remainder of the market is very fragmented, consisting of several hundred competitors, the majority of which have a local country or regional focus.
The competition in the global dental implant market is intense, with only a few large players, viz. Nobel Biocare, Straumann, Dentsply, and Zimmer. The main drivers of the global dental market include low dental implant penetration rates and an increasing worldwide elderly population. Another factor that drives the dental market is longer life expectancies, because an increase in life expectancy results in a more elderly population. Increasing consumer incomes and increasing urban populations are other major factors that are boosting the dental market.
Bone implants: Alumina and zirconia are the main ceramic materials for bone implants, largely due to their mechanical strength and chemical inertness. Morgan Technical Ceramics (MTC) is one of the globally renowned medical ceramic manufacturers that has substantial experience in developing clinically proven ceramic joints using alumina and zirconia.
MTC's Vitox AMC alumina matrix composite bioceramic material used in hip joints has been shown to have exceptionally low wear rates compared with alternative materials. It is therefore a dependable solution that does not have the potential health risks associated with metal hip joints, and it is longer lasting, thus enabling patients to continue to lead active lifestyles.
Medical-grade silicon nitride ceramics U.S.-based Amedica have good potential to find applicability in the spinal and arthroplasty segments.
Ceramics are also used in bone tissue engineering because of their osteoinductive and biocompatible properties. Scaffolds that typically act as engineered bone grafts can be used in several specialty applications, such as bone regeneration and wound healing.
Wide Use Of Ceramics In Biomedical Equipment
Ceramics are widely used in biomedical equipment, such as ultrasound machines, point-of-care systems, medical test equipment, and imaging instruments. MTC has, for example, launched its piezoceramic objective focusing device that provides the millisecond responsiveness essential for DNA research. Piezoceramics have become the premium choice for medical device manufacturers for the execution of accurate positioning and precise movements.
Because the number of people that need implants is always on the rise, demand for implantable bioceramics and composites continues to increase, while the number of ceramic parts used in biomedical equipment depends on the number of pieces of equipment manufactured and their utility. Thus, NanoMarkets believes that the demand for implantable bioceramics materials will be higher than that for ceramic components used in medical equipment.
Market Opportunities for Implantable Bioceramics Materials
Dental consumables represent the largest segment of the dental care industry, followed by dental equipment. In other words, implantable bioceramics consisting of tooth and bone replacements are in great demand and account for most of the market, while the tools and instruments used during implantation account for just a small part of the overall market.
The scenario described above suggests that not only the number of small implants used by the global population is growing and likely to continue to grow, but also the magnitude of sales are steadily increasing. Due to this steady growth in the small implants market, NanoMarkets expects the bioceramics materials market to continue to grow over the next eight years.
In this growing market, bioceramics materials suppliers will have expanded opportunities to generate new business revenues from both natural substrates and composites and novel manufacturing technologies, such as injection molding and electro-spinning. However, the significant contributors to clinical success will be materials that are bioactive, improve lifetimes, and reduce manufacturing costs.
The implant manufacturing giants like Nobel Biocare, Strauman, and Zimmer offer end-to-end solutions to patients that receive bone and joint replacements, from computed tomography (CT) scans to the actual devices. More than 20 percent of all of the prosthetic elements (tooth-based and implant-based) were produced using CAD/CAM in 2012. Although the majority of prosthetic elements are still made by hand, the share of dentists using CAD/CAM prosthetic elements continues to increase.
Nanoceramic Composites: Promising but Risky
Ceramic materials fabricated in the form of nano-sized particles show excellent promise in bone tissue regeneration applications. In fact many in vitro studies have proved beyond a doubt that bone-forming cells called osteoblasts have proliferated on substrates with nanoceramic particles and coatings.
However, when the ceramics are formed into composites with carbon nanotubes (CNTs), cytotoxicity has been observed in some experiments. In addition, nanoceramic polymer composites with amine and amide groups may lead to the accumulation of toxic debris that can evoke inflammatory and/or immune responses and ultimately lead to the rejection of the composite when implanted in a human host. Moreover, the rejection of the implant sometimes can lead to sepsis or septic shock.
Therefore, while nanoceramic composites have great potential in the future as implants and medical devices, NanoMarkets believes that key questions about their biocompatibility and bioactive properties must first be addressed before that potential can be realized.
Major implant manufacturers must conduct thorough research studies and, more importantly, appropriate clinical trials before implants and prostheses containing nanoceramic composites are released to the market.
In addition, NanoMarkets has observed that the number of companies offering nanoceramics is growing. Therefore, firms that simply offer acceptable clinical solutions, and not clinically significant advantages, will only be able to compete on price. However, if they can offer a price advantage, because most clinicians are price sensitive, they may gravitate to the newer lower-cost substitute implants.
Smart coatings are typically defined as a film composed of unique materials with pre-defined properties that can change in response to an external stimulus, such as light, electric current, pressure, etc. Ideally, a smart coating can be tailor-made to suit the needs of the consumer and can thus act in very different ways for different applications.
There are no set criteria for smart coatings, and it is the end-use of the coating application that defines the material choice and inherent characteristics of a smart coating. In this report, therefore, we have also included coatings that are specifically intended to stand up to extreme conditions and respond by not responding, which is the characteristic that makes them smart. While there is an obvious paradox here, this type of coating has many of the same types of commercial and technical characteristics as the responsive type of smart coating.
The term ‘Smart Coating’ broadly refers to a gamut of coating materials with varied chemical, physical, mechanical, and electrical properties that find applications in a wide range of industries, from the construction to the textile sectors. However, in terms of business attractiveness and revenue generation, the scope of smart coatings is limited to a handful of key industrial and commercial segments, including the construction, automotive, medical, consumer electronic goods, and military sectors.
Because of their ability to offer customized benefits to suit the requirements of the end user, smart coatings are likely to demand a premium price in comparison to conventional coatings. Hence, it is important to ascertain the cost-benefit proposition so that the attractiveness of a particular type of smart coating for a target consumer segment can be gauged.
Some application areas, such as military and medical, are likely to adopt unique smart coatings with unmatched benefits despite their high prices, because these segments are typically more sensitive to quality than price. At the same time, some relatively new consumer segments, such as high-end consumer electronics, may adopt smart coatings because of their favorable scratch-resistance or visual enhancement features. Others, such as commercial building owners, are likely to be more interested in the temperature and privacy control features of smart coatings.
Improving Scope for Medical Applications
Smart coatings can be customized to create a toxic or non-toxic barrier for harmful microorganisms. As a result, smart coatings are increasingly used in medical applications as antimicrobial agents. In addition, the triggering mechanism in smart coatings to activate a specific functionality can be harnessed to develop efficient drug-delivery systems; however, such systems are not likely to be commercialized in the immediate future.
Antimicrobial coatings: The applicability of smart coatings as antimicrobial agents has extended beyond medical uses to the food, textile, and residential segments, in which protection from bacterial and fungal growth has gained significant importance in recent years.
Some of the established material specialists in this space offer antimicrobial coatings based on patented non-toxic silver technology for application in hygiene-sensitive areas such as hospitals and food processing facilities. DuPont (U.S.), for example, has licensed industrial applicators (for instance, Plas-Tech Coatings (U.S.) that apply its antimicrobial Teflon industrial coatings in the healthcare, food processing, and pharmaceutical industries.
On account of their versatile properties, polymers have gained respectable popularity in this field, resulting in their wide-scale use. A direct impact has been the improvement in technologies for the production of high-quality polymer resins on a large scale. In addition, major polymer producers are making investments in order to portray themselves as medical polymer manufacturers. This interest is driven by the market growth of this sector, which should continue to experience sustained profitability.
Applications: The use of medical polymers in general can be classified into three major domains:
• Implants and devices—systems that are used either inside the body or in conjunction with the body, such as cardiovascular prostheses, ocular lenses, orthopedic implants, etc.
• Diagnostic systems—materials in which the analysis and detection of the causative reasons for illness are carried out in a timely fashion, ensuring follow up treatment procedures.
• Hospital accessories—surgical, microbiological, pathological, and clinical labware commonly employed in day-to-day operations.
All of these applications are expected to grow in size and volume as people in both developing and developed nations vie for better medical treatments and procedures. Advances in polymer technology are overcoming certain performance barriers and enabling these materials to meet the stringent requirements of this sector, particularly for the implants and devices segment, where the polymers are intended for "inside the body" usage.
Segmentation: The medical polymer market is segmented based on the physical nature of the polymer materials into two categories: plastic resins and fibers and elastomers. They are also classified as biostable/non-biodegradable or biodegradable. Resins are liquid-soluble polymers, while fibers come in long elongated shapes.
Resins and fibers: Non-biodegradable medical resins and fibers are rigid plastics, including thermally remoldable and fixed thermoplastics and thermosets. Examples are polyethylene (PE), polypropylene (PP), polyvinyl chloride (PVC), polyethylene terephthalate (PET), polyamides (PA), polyfluoroterephthalate (PFTE), polyvinyl alcohols (PVA), polymethyl methacrylate (PMMA), polyhydroxy ethyl methacrylate (PHEMA), polycarbonate (PC), polystyrene (PS), polyesters, etc.
NanoMarkets believes that Quantum Dots (QDs) have good potential to be a dominant large display format technology in the near term, but will take some more time to find commercial applications in the small display segment. In addition, NanoMarkets believes that in the near to mid-term, the lighting industry is likely to witness a good number of commercial launches, particularly in the solid-state lighting (SSL) segment, in which QDs have the potential to replace LED phosphor-based lighting solutions.
Downstream suppliers of QD raw materials are likely to expand their manufacturing facilities in order to meet the growing demand for QDs from consumer electronics producers, particularly TV manufacturers, as well as research facilities and some SSL-based lighting solution providers.
The QD market can be broadly classified into two segments:
• Displays employing QD technology in large (TVs) and small formats (smartphones, tablets, etc.) Although QD-based TVs have begun to emerge commercially, it will take some time for the market to realize their full potential. Meanwhile, small display formats are likely to test the commercial viability of QD-based solutions in their commercial products.
• Solid-state lighting solutions, where QDs have begun to find applicability in personal electronic devices, such as smartphones and tablets, and exterior signage. However, certain pitfalls with regard to tuning the color range, producing a true white color, and high costs have limited the application of QDs in home and commercial lighting setups.
NanoMarkets expects the U.S. to be at the forefront of QD-related research activities, as evident from the presence of a wide network of QD research-based start-ups and the number of collaborative deals that some of these start-ups have struck with established raw materials suppliers and OEMs, particularly in the consumer electronic display segment.
QD TVs Emerge, While QD-Based Smartphones and Laptops Have Yet to Gain Commercial Acceptance
Large display segment: QD-based solutions have made significant inroads in large format displays such as TVs, primarily because of the versatile applicability of QDs in a wide range of display devices combined with their better color production, color purity, and power efficiency.
Large format QD-based display solutions are mostly licensed to OEMs by a few innovative start-ups, such as QD Vision, Nanosys, Nano Photonica, and Nanoco Group.
The past year has seen major changes in the world of transparent conductors (TCs). The uncertainties in the TC market are now—in the opinion of NanoMarkets—higher than they have been for many years. In summary, in the past year, we have seen three trends emerge that are currently reshaping the opportunities in the TC market.
The three trends that NanoMarkets sees as central to the potential for TCs as a business proposition are (1) the growing ubiquity of touch panels, (2) the tendency to eliminate TCs from the latest display technologies and (3) alternative TCs reaching some kind of tipping point in terms of acceptability. These trends have differing implications on the TC community.
Touch Everywhere: Good News for Non-ITO Transparent Conductors
For quite a few years now touch modules have been the battlefield in which alternative TCs have fought it out with ITO. In other markets, ITO is either too entrenched for non-ITO TCs to put up a serious fight (primarily we are talking about LCDs) or the market is too small at the present time to generate serious revenues (flexible displays are the case in point).
So the ubiquity of touch very largely determines the immediate addressable market for alternative TCs at the present time. Obviously, with the arrival of tablet computing and the latest generations of smart phones, touch became much more part of the general computing experience. In the year since NanoMarkets' previous report on TCs, however, the use of touch has been ramped up a notch or two.
The key event here is the arrival of Microsoft’s Windows 8 OS, which became generally available in October 2012. This latest version of Windows is specifically optimized for touch and includes a new platform for developing applications using touch interfaces. Windows 8 touch capabilities—although not everything about Windows 8—have received good reviews.
The point of all this is that the installed base of Windows users is huge and most of them will eventually move to Windows 8 or higher. As this happens it will embolden the computer OEMs to use touch screens. So, at first touch-screen was for some smartphones only, then for almost all smartphones and the new tablets and now it makes sense to deploy it on most incarnations of PCs including laptops/notebooks—Intel is already pushing it for Ultrabooks—and even desktop monitors.
We note here that when a few firms tried to introduce touch on desktop machines five or six years ago, things didn’t go so well for them. Windows 8 should therefore be considered a key enabler for touch.
Implications for TCs: The interesting aspect of all of this from the perspective of TCs is that the addressable market for TCs in the touch module market just got bigger; a lot bigger. But as NanoMarkets sees it, this is not just a simple change in the potential size of the market it is also a strategic sea change.
Thus, until very recently, alternative TC makers, while thinking of the touch display market as low-hanging fruit also regarded this market as no more than a place to start. To illustrate the point, an executive at a leading supplier of alternative TCs told us some time back that his (relatively small) factory had the capacity to produce all the transparent conductive film that the touch module market now needed.
In other words, in order to build a sizeable business, alternative TC suppliers have been aware for some time that they would have to break into other market areas that would not be so easy to penetrate either because of intrinsic risks or because of entrenched use of ITO. What the latest rise in the fortunes of ITO does is buy time and give the alternative TC firms more growing room for the next few years.
In other words, Microsoft has inadvertently reduced the risk for the alternative suppliers. And while Windows 8-based touch has been praised for mobile devices, it has not received the same level of praise for its use on legacy desktop machines. So Windows 8 users may be driven towards the use of a new class of desktop and notebook machines by the need for touch to make the best of windows.
NanoMarkets has provided coverage of the smart lighting sector since the sector’s earliest days. Our definition of smart lighting comprises adding intelligence – in the form of additional electronics – to enhance the capabilities of lighting systems in useful ways. Smart lighting, the way that NanoMarkets has discussed it, does not specify the light source and it could use CFL, LED or even incandescent lighting theoretically. However, almost all commercially viable smart lighting that is likely to be sold going forward is likely to use LEDs. So it is in LED-based smart lighting systems that the potential for chipmakers lies.
Today’s smart lighting systems are descendants of the lighting management systems that have been around for decades. In NanoMarkets’ market analysis of smart lighting systems, we count these older smart lighting systems as Generation 0 systems. Of more interest from a commercial perspective are current and future smart lighting systems. We have these pegged into three generations.
The first of these Generations is primarily concerned with energy efficiency and accounts for almost all the smart lighting systems that are currently available. However, we expect these Generation 1 systems to gradually transition to another kind of smart lighting system that will focus on color tuning to create better moods, health and work performance. Finally, there is some possibility that a Generation 3 of smart lighting will emerge that will be capable of providing visible light communications (VLC). The future of this Generation 3 smart lighting—sometimes known as Li-Fi --is very uncertain and no firm is making silicon for it yet.
Having provided coverage in the smart lighting space for several years, NanoMarkets believes that smart lighting represents a growing opportunity for chipmakers. Today smart lighting OEMs buy the electronics that make their systems smart from as many as a score of suppliers. But in most cases, the electronic components being purchased for smart lighting systems are off-the-shelf LED drivers, MCUs and sensors and they are not optimized for lighting applications.
So far, only a tiny handful of chipmakers have specifically identified themselves as smart lighting chip manufacturers: However, NanoMarkets believes the number of firms that will be self-identified smart lighting chip firms is about to grow substantially as smart lighting begins to hit the mainstream over the next few years. We also foresee that firms that have seen good times until recently selling LED drivers for display backlighting will turn to the smart lighting space as the backlighting market slows down. Finally, we think that the chipmakers will find themselves drawn into smart lighting space as an early market for a new generation of chips that have been designed with the coming Internet-of-the-Things in mind.
Current MCU and LED Driver Requirements for Smart Lighting
The current generation of smart lighting systems is all about enhanced energy efficiency and we think that systems vendors are ready to snap up the latest low-power chips as these chips appear on the market. Some of the chipmakers that have an opportunity to make money in this space will be the growing number of firms that are focusing on low-power chips in general.
In an era of increasing environmental awareness, consumers and corporations are seeking ways to make their homes and offices more energy efficient. In the U.S., energy consumption in buildings represents one-third of all the energy used in the country and NanoMarkets believes that in other countries statistics of this kind would not be all that different from what we see in the U.S.
Windows are notoriously leaky in terms of energy. This represents an opportunity to produce more energy-efficient windows. Much of the technology being developed in this space relates to better insulated windows, but so-called smart windows (a.k.a. self-dimming windows) are also likely to be an important part of the mix and an important contributor to the revenue stream.
The Regulatory Push for Smart Windows Gains Momentum
NanoMarkets believes that just with market forces alone (especially the rising costs of energy) smart windows technology might have done quite well. However, another kind of wind in the sails of this technology is regulatory in nature.
There are many laws and regulations that impact the prospects for smart windows positively. These are to be found in the construction domain, as well as the electricity and energy consumption domain and they are designed to promote the use of smart windows to reduce heating, cooling and lighting costs. More specifically, the regulatory factors that are currently influencing the energy consumption by both residential as well as commercial structures include building codes based on the zero-energy building concept and the LEED standards. Many local, regional and national governments across Europe, North America and Asia are looking to ensure that this goal becomes a reality.
NanoMarkets believes that the market will open up to smart windows to accommodate the increasingly stringent codes and the standards set for construction projects and this trend will only become stronger in the coming years, as regulations are increasingly designed to ensure that all buildings follow the sustainability norms set by them.
China: While the regulatory trends promoting the use of smart windows are well understood and have been impactful for several years, NanoMarkets notes that the growing technological sophistication of China is a new factor that will increasingly play a role in the growth of smart windows. In particular, Chinese energy and environmental policy will be of key importance.
In fact, NanoMarkets sees China as moving to make green building a centerpiece of its energy plan. Thirty percent of new construction in China will be energy efficient by 2020, according to a document released by the Ministry of Finance and the Ministry of Housing and Urban-Rural Development. China wants its building sector energy consumption ratio to be closer to that of developed countries and plans to provide incentives for green buildings, raise industry standards and foster development of related industries.
The combination of regulatory factors and the rising cost of energy will, we believe, grow the smart windows sector well out of niche status in the next couple of years.
There is nothing new about lighting management systems. Such systems have existed for decades and the new term "smart lighting system," could be construed as just another name for "lighting management system," updated to include the term "smart;" a word that has become a "must use" in the technology world today.
Nonetheless, NanoMarkets thinks that when one digs a little deeper—beyond the purely semantic—it is possible to identify some real distinctions between the old "lighting management systems" and the new "smart lighting systems" concepts and that for manufacturers in the lighting space that understand these distinctions, there will be significant profits to be made over the coming decade.
NanoMarkets believes that there are three factors that demarcate the new smart lighting systems from the old.
(1) a greater sense of urgency about energy efficiency, which tends to expand the addressable market for light management systems in a way that is genuinely new,
(2) the growing ability to address needs beyond energy efficiency that are provided by new types of lighting,
(3) a slew of new enabling technologies, ranging from chips to clouds that NanoMarkets believes will better handle (1) and (2) and also increase the ability of smart lighting vendors to differentiate themselves in the marketplace.
Energy Efficiency: Prime Mover for Smart Lighting
That energy efficiency is the key driver for lighting management needs little explanation. Adding to energy efficiency being the prime mover here is the fact that in both residential and commercial buildings, lighting tends to use much of the energy consumed. However, for a variety of reasons, increasing energy prices now look like they are here to stay and, if this is correct, the addressable market for smart lighting is going to grow over the next decade.
This trend, NanoMarkets believes, will certainly create demand not just for more smart lighting systems, but newer kinds; improved smart lighting systems for residential buildings for example. In any case, it is a safe bet that a lot of firms are going see their fortunes being made from smart lighting.
While there is a genuine opportunity here, NanoMarkets believes that there is a danger that it could be overstated. Some firms entering the smart lighting business may do so with the thought that the rapid growth in this market will generate enough new business for them to be profitable. Such expectations may actually not be completely unrealistic at first.
But if smart lighting firms fail to find effective ways to differentiate themselves in what is already becoming a crowded marketplace, they will quickly see their business slip away from them. As a matter of fact, in NanoMarkets previous report on smart lighting—in 2012—we specifically noted that many of the smart lighting systems from firms that were purportedly innovative start-ups, actually had a certain sameness to them. They seemed to be offering features and benefits that indistinguishable from one another and we questioned whether these would be enough to build a sustainable business for smart lighting firms.
Technologies for the detection and quantification of ionizing radiation have been around since the discovery of radiation in the late 19th century. As we have learned to exploit radiation to satisfy key technological needs, detection methods have become more and more sophisticated.
Radiation Equipment Market Characterized by Diversity
There are many radiation detection technologies to choose from when constructing detection equipment. Some of these methods are low cost workhorse methods and some have been designed for specific niche purposes. Generally these detector types are segmented by the detection medium (gas, solid, liquid) and the mode of detection. The more well-known detector types include the following described below.
Gas filled detectors: Generally these devices consist of a chamber of a gas or mixture of gases like air, noble gases (e.g., argon or xenon), methane or in some cases boron trifluoride, which are exposed to a voltage. When radiation interacts with the gas a current is formed from an entity known as an “ion-pair”, which is the basis of the detector signal. In some cases amplification of the signal (“gain”) can take place through a process known as “avalanching”.
Scintillation Detectors: Scintillation is the phenomena of a material converting the energy of radiation into a visible photon signal. This signal is detected by photo-detectors like CCDs. And the signal is amplified with a photomultiplier tube. Typically, crystals like thallium doped sodium iodide are the scintillator workhorse of radiation detection. Low-cost plastic scintillators, liquid scintillators and solid crystals of metal halide and metal oxides are well-known as well. Neutron detection may be used in some of these materials.
Scintillators find application across all detection applications; in medical (radiography, CT scans, PET scans), defense and security (handheld scanners, cargo scanners, vehicle scanners), energy (process monitors and oil well logging) and big physics (dark mater satellites etc). Costs of scintillators vary across application and detector material type.
Cherenkov (Čerenkov) Detectors: Related to scintillation, a Cherenkov detector specifically measures photons that are emitted when charged particles (usually -) are moving through a particular medium (not a vacuum!) faster than the speed of light in that medium. Essentially, this technique measures the presence of very energetic electrons emitted from nuclear fusion, or cosmologic events. However, it is also used to measure for the presence of certain radiolabeled atoms (32P) in small concentrations which emit high energy electrons.
Semiconductor (solid-state detectors): Also called direct detectors, when radiation interacts with semiconductors, electrical currents are created. The most common are high purity germanium (HPGe) and doped silicon (e.g., Si(Li)) used in -ray and X-ray applications respectively. HPGe is one of the most sensitive radiation detectors with the best signal-to-noise generally available. It is a benchmark against which most other detectors are measured, but it is expensive and must be cooled with liquid nitrogen to work. This limits them in handheld and mobile applications. Both Si and HPGe detectors are often used in spectroscopic/scientific/research instruments.
Because of modern CMOS techniques, silicon detector form factors can be tailored with ease, giving rise to numerous position sensitive X-ray detectors. Other solid-state compound semiconductors (CdTe, CZT, GaAs, HgI2 and TlBr) are being considered for different applications.
Cryogenic Detectors (e.g., Calorimeters, Superconducting Strip Detectors and many more): These detectors employ very pure materials at temperatures close to absolute zero to detect either non-ionizing radiation (such as infrared), the presence of weakly interacting particle like neutrinos or can detect very low concentrations of ionizing radiation (single photon detection of an X-ray for example). Used primarily in high energy physics and cosmology.
Neutron Detectors: Neutrons are never detected directly; rather they are detected with specialized absorbing materials that convert the neutron energy to secondary particle or photons. Most neutron detection devices are modified forms of the familiar detectors. 3He gas proportional detectors were the neutron detecting workhorse until the recent 3He shortage.
Miscellaneous Detection Methods: There are various other techniques to detect radiation, from the low-tech photographic film or track-etch detectors, to exotic bubble detectors and emerging methods based on adaptations of MOSFET and dRAM technologies. These techniques are either becoming obsolete or have not found widespread use to date.
Current Market Drivers for Radiation Detection Equipment
NanoMarkets expects most radiation detection equipment markets will remain vibrant for some time to come. Universally, most markets employing radiation detectors want better performance, optimized footprints, mobility and of course, low-cost. As one might expect there are a lot of drivers impacting the radiation detection market at the present time. Some of the most important are discussed below.
Healthcare drivers: Demand for diagnostic screening (cancer, heart disease, Alzheimer’s) continues to grow world-wide and hospitals want multiple test instruments (PET/CT, SPECT/MRI, PET/MRI) and devices with smaller footprints. Digital radiography has nearly wiped out traditional film for X-rays, and will dominate in emerging markets which are in turn demanding more tests. Meanwhile, medical diagnostic testing must use less and less radiation
Nuclear power drivers: The Fukushima incident was a major setback in terms of demand for new and upgraded power plants. However, selected nations have accepted nuclear power as a viable option and continue with plans to expand or upgrade their nuclear infrastructure, and demand has returned to pre-2011 levels. China is aggressively going to nuclear power. And nations now more skeptical of nuclear power, Japan and Germany, are reconsidering aggressive closure strategies.
Homeland security and defense drivers: Upheavals and instability in the Middle East, nuclear development in Iran, an erratically aggressive North Korea, as well as violence and terrorism throughout the world demonstrate that, post Osama bin Laden, we still live in a world fraught with danger. Western nations continue to develop devices for use by their militaries and their citizens to be vigilant against the threat of nuclear terrorism. Sensitivity, certainty and portability of detectors are driving new products.
Exploratory fossil fuel drivers: The discovery of new fossil fuel reserves on Earth is becoming more challenging, with the need to drill to deeper and in more exotic environments. New challenges to technologies to handle these challenges continue to be demanded by energy companies.
Challenging physics: Global scientific endeavors to probe the cosmos and the quantum world are leading to the study of more exotic phenomenon, which are often studied by radiation techniques. Probing so called “dark matter” is a key challenge that requires instrumentation with outstanding accuracy and precision.
Big science projects like CERN build and maintain some of the largest radiation detector facilities in the world. The ATLAS detector at CERN is some 45 meters in length and weighs over 7,000 tons. These detector systems include plastic scintillator fields to sensitive calorimetry arrays. This field always demands improvement to sensitivity, robustness and cost.
Detection Choice and Market Segmentation
As all of the above indicates, radiation detection covers a lot of markets and many different types of equipment, with the end result being a radiation detection equipment market that is highly fragmented.
• The selection of the detector by the ultimate customer for ionizing radiation depends primarily on what kind of radiation is needed to be measured. Other considerations of detector design must be accounted for and all of this factors in to the cost to fabricate a detector.
New Opportunities and New Companies
As market challenges continue to drive innovations, opportunities for small, innovative players to partner with these organizations should be present for some time. This is especially true in homeland security and defense where large aerospace-defense companies (Boeing, Northrop Grumman, and Lockheed-Martin) are used to partnering with outside innovative technology players. Also, there are a number of participants in this market of all sizes who exist and thrive; there has not been much consolidation at this time. One driver for this open platform is most likely the constant need for government entities to demand innovations to stay ahead of technological developments of other nations.
Contrast this with the large participants in the medical imaging equipment space (Siemens and GE for example). These organizations are often vertically integrated back to even the basic materials that go into their PET detectors and gamma cameras. This part of the industry went through extensive consolidation in the first decade of the 21st century, such that only a few global players are left. While these organizations still act collaboratively, small players planning on penetrating these organizations will have to do so by extensive relationship building and providing solutions that speak to their needs. This is a much harder sell than showing up with a catalog in hand.
It should be noted that new opportunities in the radiation detection space are not limited to just innovations in the detector. Innovations that improve device performance may arise in electronics or collection or even packaging.
One potential play that should be considered is a way for reducing packaging costs associated with metal halide scintillators. These materials must be packaged in airtight housing less they degrade from ambient moisture. While this is true for sodium iodide and cesium iodide to a lesser extent, it is critical for high performance halides like lanthanum bromide or strontium iodide detectors. Lowering packaging costs would be critical to the adaptation of these types of detectors.
NanoMarkets is not aware of disruptive new applications of radiation technology which are on the commercial horizon at this time. More and more though, existing applications that were once looked at skeptically and employed sparsely, are becoming more commonplace. NanoMarkets expects that irradiation for food safety will continue to grow and be embraced by the consumer as a safeguard against food pathogens. Radiation detection equipment opportunities specific to the food industry should continue to grow in the near term as well.
Radiation detection materials are a category of materials that represents a sector poised for significant growth when new materials become available in the near future. While current materials such as sodium iodide (NaI), bismuth germanium oxide (BGO, Bi3Ge4O12), lutetium yttrium orthosilicate (Lu2SiO5(Ce)), germanium and 3He (for neutron detection) are currently used in many applications, they all have at least some level of either performance or cost drawbacks for many current and proposed new applications.
The need for both high performance and higher sensitivity in homeland security and nuclear medicine diagnostic applications and for less sensitive, low cost solutions in pervasive monitoring systems presents a fertile market for new radiation detection materials.
Radiation detection materials can be divided into three general classes: scintillation detectors, semiconducting detectors, and neutron detectors. Scintillation materials are crystals that emit a flash of light when excited by radiation. The scintillation crystal is paired with a photomultiplier tube, which converts the light flash into an electric signal that indicates the intensity and quantity of the observed radiation.
NaI is the dominant scintillation material used today. Other simple salts (mostly iodides), BGO, PVT (polyvinyl toluene), and LYSO (cerium doped lutetium yttrium orthosilicate) are also used in commercial applications. While scintillation-based radiation detectors are currently the only practical solution from a cost perspective for large area or array detectors used in medical imaging and standoff security applications, their resolution, efficiency, sensitivity, and cost all need to be improved to fully meet the desired performance for today’s applications.
Semiconductor-based radiation detectors are the second major class of radiation detection materials. High-purity germanium (HPGe) is the dominant detector material in this class. Although HPGe semiconductor detectors have the highest resolution and are the only solution available for many high-performance applications, their cost is more than 10x most scintillation materials, and they require cooling to liquid nitrogen temperature to function.
While extreme cooling requirements are not an issue for laboratory applications, mobile high resolution applications are in desperate need of a low-cost room temperature radiation detection solution. CdZnTe (CZT) is showing promise as a room temperature radiation detector, and several devices are under development, but growth of the large single CdZnTe crystals necessary for large scale production has proven an elusive goal.
Materials sensitive to neutrons are the third class of radiation detection materials that will be covered in this report. 3He has long been the dominant material for neutron detection, but as discussed in below, current demand far outstrips supply, and 10B and 6Li solutions are just beginning to enter the market in significant volumes as 3He substitutes.
In this article NanoMarkets lays out three scenarios of OLED lighting going forward and offers commentary on each.
Scenario 1: OLED Lighting Prevails
This is the scenario – somewhat revised – that many forecasts of OLED lighting – including ours -- have been based on in the past. In this scenario, there are sufficient technical advancements, reductions of costs, and especially investment to make OLED lighting growth take a sudden surge.
As we have already noted the last of these criteria is beginning to look decidedly “iffy.” However, the OLED lighting fan can still point to a few positive developments in the past year. The major OLED lighting makers once again stepped up their development efforts, and progress, especially on the performance front, was made. New OLED lighting products and quite a few new luminaire designs were launched.
But getting from all this to the specific outcome that is represented by Scenario One, will be hard to achieve and will take a considerable amount of both technical and business development work over the next four to five years. Several challenges remain, including the needs for even more performance improvements, standardization as well as cost reductions and capacity expansion.
If the industry does meet these challenges, then OLED lighting could yet be the next “big thing” in lighting, or at least the next big thing in OLEDs! In particular, the prospect of using OLEDs for office lighting may still become a critical entry point for widespread commercialization, and automotive and residential lighting also represent major potential mass-markets.
Important technical improvements on track: The oft-cited, ultimate goal of OLED lighting is to sell it on the basis of its energy efficiency, which is closely tied to luminous efficacy. Fortunately, the evidence of the past three to four years is that OLED lighting efficiency is on a growth curve that will take it smoothly to the targeted 100 lm/W necessary to make OLED lighting achieve is 2015-2015 mass-market goals. This is perhaps the single major fact that OLED advocates can claim in their favor.
Similarly, luminance performance is steadily improving, and most observers – NanoMarkets included – believe that it will be sufficient to go mainstream in the 2015-2016 time frame. Improved luminance for OLEDs is expected and will be welcomed by the market, but NanoMarkets does not expect it to be a critical factor in the success or failure of OLED lighting going forward.
An industry champion to ride to OLED lighting’s rescue: Without such technical improvements the OLED lighting game would be over and OLED lighting panels would have been consigned to dustbins of semiconductor history where so many of the semiconductor innovations have gone before.
However, NanoMarkets thinks that Scenario 1 can never take place unless an industry champion emerges that will invest in OLED lighting despite the obvious risks. Such a firm will have to be not only large, but well plugged into the lighting industry, so that it can capitalize on existing supply chains to make OLED lighting happen in a mass market sort of way.
Solar energy storage with lead-acid batteries is as old as the solar energy industry itself. Off-grid photovoltaics (PV) has invariably used such batteries – in some cases just car batteries – to store energy produced during sunny periods. Until recently the market for grid-connected PV storage has been negligible, but this is changing. As feed-in-tariffs (FiTs) are reduced – and NanoMarkets expects this trend to continue globally – incentives are emerging for both residential and commercial PV users to store the solar energy they generate when the sun shines.
The solar storage business is thus doubly blessed. Not only has its opportunity space increased because of the growing number of PV installations as a whole, but non-utility, grid-connected PV has become a target has become a target market for storage for the first time.
Desperately Seeking Lithium?
NanoMarkets believes that for years to come, lead-acid batteries are going to eat up much of the available market for PV storage. Lead-acid batteries are mature, reliable, easy to find and not really that expensive. However, with growing demand for PV storage, it is understandable that battery firms have been seeking technologies that can do the job better than lead-acid.
And here are a number of alternatives. Lead-carbon batteries are a natural alternative, but remain very expensive. Many of the other alternatives – Sodium Sulfur batteries, for example – are really aimed at utility-scale generation and are not what an average PV user would consider as an alternative to lead acid.
That – more or less – leaves one main alternative to lead-acid batteries and that is lithium-ion batteries. Unlike most of the other technologies that compete with lead-acid these batteries are already in widespread use in consumer markets; cell phones, power tools and perhaps soon cars. This suggests a “fit” of some kind with the numerous commercial and residential PV installations that need – or will soon need – storage.
The fact that lithium batteries have completely chased lead-acid batteries out of the mobile communications business and is now a serious contender for electric vehicles should be considered as further evidence – albeit circumstantial evidence – that lithium batteries can sell in the PV space too. And what will sell them is their relatively light weight and their good energy density which is a vast improvement on lead-acid.
Bringing Lithium to the Solar Market
These arguments are telling and, in fact, we are already beginning to see lithium batteries creep into the PV market:
• Most notably, perhaps is Panasonic, a brand name for consumer and small business technology products, if there ever was one, which in 2012 targeted German residential PV installations with a 1.35-kWh lithium-ion battery unit (up to 5.4 kWh total per system) with a lifetime of 5,000 cycles.
• Also in Germany, in early 2013, the utility RWE started to offer its residential customers a modular energy storage system called RWE HomePower. This is a lithium-ion system developed in conjunction with VARTA. The net price of the base version of this system, with 4.6 kWh, is currently just under €13,000 plus installation costs.
• Meanwhile, in the US, Solar City now sells a home energy storage system based on lithium ion storage technology developed by the electric vehicle company, Tesla.
As NanoMarkets reports in “Opportunities for Smart Mirrors: Self-Dimming and Beyond 2013-2020”, the size of the market for smart mirror technologies is already at approximately $1 billion in 2013, and we expect the value to grow to over $3.4 billion by the end of the decade.
Some of this growth will come from increasing deployment of electrochromic self-dimming rear-view mirrors, both interior and exterior versions, like those on the market today from firms like Gentex and Magna. There is an existing, proven demand for these mirrors; they are already found in over one-fifth of new automobiles, and the proportion is expected to steadily grow over the next eight years. In fact, for many years now, the term “smart mirror” has been taken to mean just these self-dimming automotive mirrors.
However, this definition is too narrow, and in any case the markets for these self-dimming auto mirrors are largely sewn up by existing suppliers.
“Smart Mirrors” Rebooted
So for analytical purposes, NanoMarkets believes it is useful to broaden the definition of "smart mirror" to any mirror that is highly functional. Our expanded definition of smart mirror technologies includes not only self-dimming capability, but also self-cleaning and self-repairing systems via layering with various smart materials. It also includes embedded electronics like sensors, displays, and cameras that transform the humble mirror into a sophisticated, electronic device.
The latter – embedded electronics – are of particular importance in the context of smart mirrors, because there is an emerging market for sophisticated “digital mirrors” in automotive, consumer, healthcare, and advertising applications that blur the line between mirror and highly functional computer monitor. Factors that are driving demand for digital smart mirrors are: safety, comfort/convenience, design/style, and marketing.
Digital Mirrors in Automotive Applications
The main driver for adding new electronic functionality to automotive smart mirrors is improved road safety. In fact, today’s light-sensor triggered, electrochromic self-dimming smart mirrors already measurably improve safety by reducing driver fatigue and increasing response times. But safety can be further improved with the addition of more sophisticated electronics, including integrated sensor systems, displays, touch capability, Wi-Fi connectivity, GPS, etc.
Nanosilver inks and pastes have been under development for some time. One of the major claims of printable nanosilver has been that, although it is certainly more costly on a per-weight-unit basis, less of the material is needed to achieve the same level of conductivity compared to conventional materials. In addition, nanosilver's smaller particle size enables lower-temperature sintering and inherently higher resolution in printed patterns.
But these claims have not resulted in successful commercialization of printed nanosilver on a large scale:
• In reality, the high price of nanosilver has heretofore largely precluded its use in many traditional electronics applications. Even in today's market, in which silver's price is rising faster than the price of nanosilver materials, the balance has not (yet?) appreciably shifted in favor of nanosilver.
• Furthermore, even if high silver prices do eventually shift the economics in favor of nanosilver, this shift will be converted into opportunity only by those nanosilver suppliers who can tangibly demonstrate both technical and economic benefits for their customers. In other words, customers will look for materials that provide high performance, comparable or lower cost-in-use than conventional silver products, and easy-to-handle options.
Demonstration of the benefits should come the easiest in emerging electronics applications, where new printed electronics technologies are on an upswing of their own, and conventional silver is not already entrenched, such as in printed electronics applications that are emerging as part of the ubiquitous computing and/or Internet-of-Things phenomenon. These new applications may also be more able to support nanosilver's higher price, at least for a few more years, than traditional electronics applications.
Of course, the downside to this approach is that many of these novel printed electronics applications are not yet on the market in a significant way. Thus, a complementary strategy for the nanosilver ink and paste business is to stress niche products that actually exist, and in which printed nanosilver has obvious and immediate competitive advantages—like miniaturized PCBs, certain types of capacitors, and printed sensors.
Nanosilver inks: Most of the nanosilver ink products on the market have been targeted towards inkjet processing, which is typically a good fit for high-resolution printing, if not for high-throughput (although some advancements in the speed of inkjet printing have occurred over the last couple of years).
To meet the needs of high-throughput processes, nanosilver inks designed for flexographic, gravure, offset, and other high-volume printing methods have also been of interest, although they generally lag behind inkjet inks in development and commercialization. Note that low-viscosity printing—also a feature of inkjet, flexographic, and gravure printing—is tailor-made for nanosilver.
What about nanosilver pastes?
Although most applications for screen-printed silver are still defined by conventional silver pastes, there have also been advancements in nanosilver pastes.
For example, Advanced Nanotech (Korea) and Harima (Japan) both offer nanosilver pastes for higher-resolution screen-printing as a way to help manufacturers transition to nanosilver materials without wholesale changes in the printing method. These nanosilver products will come into play more frequently where finer patterning and better uniformity are needed. However, this commercialization effort has been going on for several years now, with very little to show for it.
But how far can nanosilver go?
While any successes in the inkjet sector will be associated with nanosilver, such a relationship may not be the case for the other printing methods. We note that conventional silver materials are also being successfully developed into inks compatible with flexographic, gravure, and other printing methods, which means that the use of nanosilver may not be required after all. In fact, NanoMarkets' belief is that end users will remain with the tried and tested materials unless they can be persuaded to move to more sophisticated materials.
Furthermore, today the advantages of nanosilver inks over conventional silver inks and pastes come at the cost of greater difficulty in preparing them and the nanosilver particles they contain. This greater process difficulty carries through to a higher cost-per-gram of silver contained in the inks.
In other words, often, the additional cost of going "nano" negates the savings of using less material, and the cost of nanosilver inks per square meter of printed area ends up being higher than for conventional silver inks and pastes. For firms that are already looking for ways to lower costs in a world of high silver prices, this equation does not sit particularly well.
Nevertheless, we continue to hold the view that the development of silver nanoparticle inks may be an important long-term formulation trend in silver inks. The advantages obtainable with nanosilver inks could, we believe, still pay off in certain circumstances. In particular, we see four possible ways that nanosilver could improve its prospects:
• Obviously, reductions in the cost of nanosilver inks would go a long way toward making them more attractive. The benefits of using smaller quantities of silver are obvious, and while nanosilver may be expensive now, it is still an immature material. It may take a few years for the cost of those smaller quantities of nanosilver inks and pastes to fall below that of the larger quantities of conventional silver inks and pastes, but it is reasonable to believe that it will happen in the long run.
• Printing precision is increasingly important as electronics across many applications are being miniaturized, i.e., as more and more electronic functionality is being crammed into ever-smaller units. Nanosilver ink formulations can produce finer, more reliable line widths than their conventional silver counterparts, even if multiple layers are required to build suitable aspect ratios.
• When fragile substrates (very thin wafers used in PV applications, for example) or roll-to-roll (R2R) printing are used, an argument might be made in some cases that one or more of these alternative printing methods is the way to go. Inkjet, for example, makes sense when non-contact printing is desired.
• Low-temperature processing could be an enabler for some very low-cost, flexible electronics technologies fabricated on flexible substrates. Here, the small size of the nanoparticles can facilitate lower-temperature curing of the printed silver, since sintering temperature in metallic pastes and inks is a function of particle size. This advantage potentially produces additional important opportunities for nanosilver as an alternative to conventional silver pastes.
As reported in NanoMarkets’ most recent report on industrial silver, NanoMarkets estimates that the total global market for silver inks and pastes in 2013 will be approximately $7.8 billion, but that it will slowly contract over the next eight years to about $7.5 billion by 2020.
The decline in the overall market is due primarily to two factors (1) the persistently high price of silver, which retards the use of silver inks and pastes in cost-sensitive applications, of which there are quite a few and (2) the decline in the biggest market for silver inks and pastes; photovoltaics.
High Silver Pricing to Persist: Three Strategic Options
In the past, the silver inks and pastes market have frequently had to adjust to brief periods of high silver prices. What seems to be different this time is that high silver prices are likely to persist for a number of years or even go higher.
The average price of silver is now well over $30 per troy ounce, which is more than twice those of just three or four years ago. Given the current propensity of investors to hold silver as a hedge against inflation and uncertainties about GDP and monetary policy, coupled with low interest rates, it seems unlikely that silver prices will come down any time soon.
Thus, both consumers and suppliers of silver inks and pastes are facing a difficult business climate in which there is a new paradigm for their cost calculations. In this environment, NanoMarkets believes that the ink makers have three strategic options.
There is always the default option of exiting the silver inks and pastes altogether, but we don’t see this happening except with a few marginal players. The desperation levels have just not risen to sufficiently high levels for there to be a mass exodus of suppliers from the silver inks and pastes sector; not yet anyway. The other two options available to silver inks/pastes suppliers are:
• Development of (1) silver-free substitutes based on printable copper, aluminum, nickel, and silver-coated metals, or (2) non-printing methods for deposition of circuitry (like electrodeposited and etched copper).
• Development of (1) silver-based products that have lower silver loadings but that maintain high performance, through the development of reformulated pastes with lower silver content, alternative silver powder or flake morphologies, or (2) lower viscosity/higher resolution silver inks designed for ink-jet, flexographic, gravure, and other printing processes.
In the past, substitutes for silver like these have always risen and fallen with fluctuating silver prices. Today, however, with the prospect of long-term high silver prices, there is now the possibility of a more stable business environment for them to develop, even though the market for these materials is generally inherently limited by their inferior performance compared to silver.
The bottom line is that the high price of silver is creating opportunities for new ink and paste formulations. Given that this high price is likely to persist, these formulations can be created with reasonable expectations of long-term use.
Declining Use of Printed Silver in the PV Market: The Silver Inks and Pastes Market Runs Out of Luck
Today, the PV market, and in particular the conventional crystalline silicon (c-Si) PV market, is the largest user of silver screen-printing pastes. Printed silver is used for both front-side grids and backside metallization. But usage of printed silver in PV applications is declining. Sales of silver inks and pastes for PV applications will decline from over $4.9 billion in 2013 to about $3.4 billion by the end of the forecast period in 2020.
Several, separate influences are creating this decline; taken together, these trends spell trouble for sales of printed silver to the PV sector:
• First, the high price of silver, combined with the extreme cost-sensitivity of PV general, has led PV panel makers to replace silver wherever possible. To reduce costs, printed silver tabbing strips are increasingly being fabricated with cheaper metal solders and, more importantly, backside metallization is being increasingly switched over to aluminum. The only good news here is that front-side grids will continue to be dominated by silver pastes, largely because few worthy substitutes exist for this application in which maximum conductivity is critical.
• In addition, growth rates in the overall PV market have softened considerably in the past two years. Declining growth rates in PV are, in no small part, due to a decrease in governments’ support for PV installations.
• To make matters worse, more and more PV is shifting toward thin-film PV (TFPV), which does not use nearly as much silver as the conventional c-Si PV that dominates the market today.
It is important to see this decline in the PV sector in historical context. The silver paste market has been one that has gotten lucky for decades now.
The demand for silver pastes grew large as the result of the need for membrane switches and PCBs for consumer appliances and for silver traces in heated automobile mirrors. When the growth of these markets began to wane, the silver paste market could make up ground with demand from the computer industry, then the cell phone sector, then the PV sector.
But with the demand for silver pastes and inks from the PV sector in decline, there seems to be no new markets appearing for silver pastes as has happened in the past.
Four Markets Where Silver Inks and Pastes Will Sell Well in the Next Few Years
This fairly gloomy picture should not be taken to mean that silver inks are about to join buggy whips in the ash heap of technology history. In fact, NanoMarkets has identified five areas where significant growth can still be expected for the next few years:
1. Traditional thick-film electronics. We think that traditional thick-film electronics, comprising a vast number of different printed circuit board applications as well as printed membrane switches, keyboards, surface-mounted capacitors, resistive heaters, and the like, will continue to be a growing sector. Specifically, traditional thick-film applications for printed silver will use $2.4 billion worth of silver inks and pastes (mostly pastes) in 2013, and this sector will grow to a value of about $3.4 billion by 2020.
• Most of these products are made using mature, well-established processes so replacing printed silver with a different process would be hard to achieve in many existing production lines. In addition, increased wealth in the developing world will spur increased demand in exactly the kinds of consumer products that employ printed silver circuitry.
2. New displays. New types of displays are challenging traditional displays in a number of different applications. In particular, touch displays represent a growth area for silver inks and pastes. The now dominant pro-cap touch screens require minimizing contact resistance in the panel border area, and this need heavily favors printed silver, with its superior conductivity.
• Flexible displays have been talked about for many years, but now seem to be on the verge of commercialization, thanks largely to Samsung and LG. Commercialization of flexible displays implies the use of flexible, i.e. plastic, substrates, which favors the use of printed silver circuitry, with its inherent flexibility and compatibility with low-temperature processing.
• Although sales of silver inks and pastes into the display industry are expected to decline slightly over the next couple of years -- from about $388 million in 2013 to about $379 in 2015 – NanoMarkets expects these revenues to begin to increase again starting in 2016 and to reach a value of nearly $450 million by the end of the decade.
3. OLED lighting. OLED lighting is poised for very rapid growth, especially after 2016, which is when it is anticipated that OLED lighting’s technical performance will be sufficient to meet the market needs of the broad general illumination market. Silver ink and paste suppliers should make the case now to OLED panel manufacturers that printed silver grids or bus bars, which could prevent voltage drop-induced visible brightness gradients and resistive heat losses across long spans of (less) conductive transparent electrodes, can enable the market to meet its full potential.
• Silver inks for non-screen processes: The ongoing megatrend toward miniaturization of electronic circuitry means that manufacturers will be looking for higher value-added inks that target specific, new niches. This trend will lead to increasing opportunities for higher resolution inks designed for deposition by ink-jet, flexographic, gravure, and other printing methods. Innovative suppliers will meet this challenge with new kinds of inks, including, potentially, some based on nanosilver particles. While the market in 2013 for such silver inks is expected to a modest $260 million, the value could grow to well over $1 billion by the end of the decade.
The contents from this article were drawn from the new NanoMarkets report, “The Silver Inks and Pastes Market 2013-2020” Additional details about the report are available on the firm’s website at:
Failing a sudden insurgent interest in intrinsically flexible displays, NanoMarkets believes that flexible glass will be best positioned as a thinner and lighter weight alternative to the rigid display glass. This opportunity is driven by the explosion in mobile displays, which, by their nature, place a high value on both thinness and lighter weight. Smart phones are already ubiquitous, and their average size is increasing; meanwhile, tablets are booming, too.
Flexible glass can tap into existing trends (lightness and thinness) in mobile displays, and these applications can then serve as an entry point for flexible glass to address the huge mobile display market.
Most of the displays that adopt flexible glass will be LCDs, which dominate the overall display market today. Nonetheless, the opportunities for flexible glass in mobile displays may be the greatest in the OLED display sector:
While the current electrical grid is a modern marvel, there is a general consensus that it needs to be upgraded to a Smart Grid with grid storage. Energy storage is, in fact, a vital component of the coming Smart Grid, and NanoMarkets predicts that new materials and systems for chemical batteries and supercapacitors for Smart Grid electrical storage applications represent a significant opportunity.
Even though pumped hydro is the most efficient means for storing generated power for later use, NanoMarkets believes that chemical batteries and supercapacitors represent the biggest growth opportunity for most applications, as they are not limited to certain geological locations and do not have the potential environmental impact issues of pumped hydro.
The near-term opportunities for quality and load leveling storage are clear. Approximately 90 percent of power outages in advanced economies last two seconds or less, and 98 percent of outages last 30 seconds or less, but their economic effects are large. In the U.S. alone, the impact of power interruptions due to lost time, lost commerce, and damage to equipment is estimated to range from $75 to $200 billion per year.
Supercapacitors are well-suited to many short-term (less than a minute) load leveling and quality applications, because they have an extremely fast discharge and charging response, a high current capacity, and can be cycled hundreds of thousands of times without degradation to their storage ability.
While there is currently a large growth market for supercapacitors in uninterruptible power supply (UPS) battery systems for protecting critical infrastructure, improvements in capacity and cost are creating new markets for them as well, particularly in new high-tech industrial applications.
Chemical batteries, meanwhile, are ideal candidates for longer-term (minutes or hours) power quality applications and for peak-shaving applications, because they have higher energy densities and, for many types of batteries, have long service lifetimes.
They represent a critical component of several Smart Grid applications at several levels along the value chain. Bulk price arbitrage, central generation capacity efficiency improvement (peak shaving), transmission capacity/transmission congestion relief, and the integration of variable output sources, such as wind and solar, are all crucial storage applications for chemical batteries in a successful Smart Grid.
The need for storage that can integrate solar and wind cannot be over emphasized. In the U.S., 30 states have renewable energy mandates that average 17 percent integration of renewable energy sources by 2012 to 2025. Only with a significant amount of electrical storage can this level of wind and solar be integrated into a stable electrical grid, so the value proposition for new forms of electrical storage is difficult to overestimate.
In China, for example, generating capacity is not keeping up with increased demand, and storage is being examined as a means to balance load and demand. China also has several provinces where up to 20 percent of their electrical power comes from wind. Electrical storage will be needed in these areas to provide higher power quality.
Notable Recent Developments in Flexible Glass
In the past year, we have seen the flexible glass sector expand its commercialization efforts as some of the major firms in this area have ramped up their activities. Some notable increases in the seriousness of intent in this sector over the past year include the following:
• Corning officially launched Willow Glass in 2012, its 100-μm-thick material designed for lightweight, cost-efficient products in the display industry. The material complements Corning's extensive line of display glass products with a new, ultra-thin material available in roll form.
• Meanwhile, AGC is offering a 100-μm-thick flexible glass material for "sheet-to-sheet" handling that is available with an easy-to-remove, rigid carrier glass.
• NEG has been exhibiting and marketing its own 200-μm-thick flexible glass under the name "ultra thin sheet glass" for displays and other electronics devices.
• Schott's commercially available D 263 eco product is available in sheet form with thicknesses down to 25 μm. The firm is also developing other flexible glass products.
Re-evaluating the Value Proposition of Flexible Glass: Lower Weight for Initial Revenues
As the flexible glass business has moved forward, NanoMarkets believes the firms involved have become increasingly focused on where and when money will be made with this new material. In its earliest days, flexible glass was seen as being somehow connected to the flexible display concept. However, this association is much less apparent today. Instead, flexible glass is now seen as serving more immediate demands for mobile display applications.
In NanoMarkets' view, the most immediate selling point for flexible glass at the present time is that it can, at least in theory, provide a lighter-weight and lower-cost alternative to rigid glass. Such a material is exactly what is needed by the burgeoning mobile communications and computing sector, where smartphones are getting bigger and tablets are proliferating. This growth puts a premium on lower-weight glass, since low weight is at a premium in the mobile communications/computing sector.
In fact, although billed specifically as flexible, flexible glass is actually the current end point of a long-established research program to develop thin, lightweight glass, and this program specifically has always had the mobile communications and computing market in mind.
As things have turned out, flexible glass, as it has emerged, finds the mobile communications and computing market even more ready for its capabilities than its original backers might have once thought.
As such, one might think of flexible glass as now returning to its roots in low-weight mobile display glass, which it was always bound to do. To NanoMarkets, it now seems almost inevitable that the first significant revenues from flexible glass will come from tablet and mobile phone manufacturers.
R2R Display Manufacturing and Flexible Glass: It's What's Next
Although not an immediate revenue generator, NanoMarkets believes that roll-to-roll (R2R) display manufacturing is near to generating revenues for flexible glass. Today, most displays are made in batch processes. However, there is a general concern in the display industry that it will not be easy to scale the current batch processes for making displays much beyond where they are now in terms of substrate size. Batch-mode display fabrication continues to scale, but at a much less revolutionary rate than in the past.
One of the reasons for this slowing down is the use of glass itself; beyond a certain point, sheets of glass reach a point where they are so unwieldy that they are impossible to work within batch mode—they are too heavy and too likely to break. Yet the display sector is reluctant to dispense with glass, which is seen as a high quality product that enhances the marketability of the final product. Glass is also a fine encapsulation material.
Self-cleaning windows have been on the market for more than a decade, beginning with residential markets and then moving on to commercial buildings. Several technologies are used commercially. Yet despite all this, self-cleaning windows are not that widely known or used. Nor are they easily available through the usual building products supply chains:
• This failure—the failure of self-cleaning windows to generate large revenues—is widely "blamed" on two factors; high-cost and low performance; that is to say, self-cleaning windows don't offer good value. According to one source, self-cleaning windows cost as much as 20 percent more than equivalent windows without self-cleaning capabilities.
• At the present level of development, the performance of self-cleaning glass does not really seem to be all that effective.
Is there a real chance that these kinds of windows will have more market success in a near-to-medium term timeframe? Self-cleaning windows are obviously potentially useful. Thus on the demand side of the equation, there does not seem to be a need for a detailed explanation of why self-cleaning windows would be desirable, although we do note that certain demographic changes (notably aging populations), seem to favor the need for self-cleaning windows.
NanoMarkets believes that there are, however, indications that self-cleaning windows have a bright future. The trends that impress us here are mostly technological in nature, but this shouldn't be taken to mean that they are restricted in some sense to what is going on in an industrial lab.
On the contrary, what we are seeing are signs that there is a growing technological impetus behind self-cleaning windows that will enable them to meet their "obvious" market potential. NanoMarkets believes that these newer technologies—and riffs on older technologies—will (1) improve the performance standards for self-cleaning windows and (2) make such windows more affordable.
In other words, we think there is a good chance that over the next few years, self-cleaning window technology can be improved to a point where such improvements have a positive impact on sales of such windows. In addition, there are signs that investment money may be available for self-cleaning windows. At the very least in today's capital rationing environment, self-cleaning windows products and companies have a better than average chance of getting funding.
Given the overall disappointing results to date for printed electronics, it is perhaps surprising that there has been something of a revival of interest in strategic printed electronics in the last couple of years. Not surprisingly, this effort is much more modest than the narrative of developing a large and distinct PE industry, and in the sense that the number of applications to which the new PE is directed are fairly limited.
There are a number of ways that these efforts could be viewed. A cynic might view them as no more than a last desperate gasp of firms that were active in the second phase of PE story. However, NanoMarkets believes that there are now genuine opportunities to be had as the result of PE development and that this new kind of PE, which we are going to call Printed Electronics V3.0, can learn from the failures of the past, both in applications and in printing itself, to generate new business revenues.
Within PE V3.0 we find a relatively narrow group of applications that are being treated seriously by those interested in PE V3.0, but these applications are systems that rely on a large number of components and it is these components that are actually printed. For example, from the end-user perspective one area of interest would be powered smart cards, but this might mean printing two types of components; chips and displays:
• Most of the current interest within the PE V3.0 framework is with a class of applications that are clearly strategic in nature with a tendency for them to also be low-cost and disposable/short-lived. These points are interrelated in that for very low-cost applications, it may be very hard to achieve economic viability without using functional printing.
• There are also some other applications, which we are including in PE V3.0 where printing is used (or could be used) and there is a chance that it could become strategic in nature, but where “disposability” is not really the issue. Printed mobile and TV displays and printed solar panels are the main examples here. These PE V3.0 applications are mostly characterized by the fact that, although not common, printing is being deployed by one or two firms, in a way that is hard to ignore.
What all this means ultimately is that PE V3.0 is much more modest in its ambitions. It is certainly not trying to create a major new industry for Europe or, indeed, anywhere else. More importantly in the context of this report, the applications being put forward by advocates of PE V3.0 are relatively few in number and they are limited to those where:
• The PE industry is reasonably sure that today's printing technology is up to the task set for it.
• There is a fairly clear and short path to first revenues for the systems being printed. This was something that wasn't really emphasized in the previous phase of PE and is all the more important given the current poor economic conditions that exist in many parts of the world at the present time.
What this third phase of PE has in common with the second phase is at the fabrication level. That is, we are again talking about creating fairly complex devices using printing processes. And the motivation at least is fairly strategic; printing is seen as important so that these devices can become fairly ubiquitous. However, there is in this latest phase of PE development, a lot more thought being given to how and why the market could lead to such ubiquity.
The OLED encapsulation sector has changed considerably in the past two years. OLEDs have broken out of their previous niche market pattern, in which they were used mostly for simple, passive matrix displays for MP3 players, cell-phone sub-displays, etc., that had modest encapsulation needs well served by simple cover glass technologies.
Today, however, the OLED industry is booming, with full-color, active-matrix (AM) OLEDs leading the way. Indeed, OLED displays have gone mainstream, and OLED lighting is not far behind:
• OLED displays are the fastest growing primary display type in mass-market smartphones, tablets, and other mobile computing products.
• Meanwhile, OLED lighting is now on the market in the form of designer light kits, as well as in luxury luminaires, and NanoMarkets is predicting that larger segments of the lighting market are likely to be penetrated by OLED lighting in the next few years.
• OLED TVs appear to be – finally – on the verge of mass-market introduction, with products from Samsung and LG expected in 2012 and 2013, respectively.
These trends mean that the addressable market for OLED encapsulation materials is rapidly growing and should continue to do so.
Increased Production and Larger Panel Sizes Lead to New Encapsulation Needs
Notably, these OLED market trends are accompanied by two shifts in the OLED panel demand patterns that will influence the market for OLED encapsulation.
• First, of course, increased production of OLED panels of all types is good for the encapsulation business.
• Second, there is an important, ongoing shift toward larger panels, especially in TV and lighting applications, both of which are expected to greatly increase the size of the addressable market for OLED encapsulation materials.
Why Double Glazing Isn’t Boring Anymore
Double glazing shipments worldwide are worth billions of dollars annually. But growth of this traditional business is slow (this is especially so given the woes of the construction industry) and one would never identify it as an opportunity per se; that is no one would suggest that “double glazing” as a business that people should jump into as a way of making big money. It has been at least 30 years since someone could seriously make such a claim. In one trade press article that NanoMarkets retrieved as part of the research for this report, the double glazing industry was portrayed as “boring,” which seems to NanoMarkets to be a fairly reasonable characterization of the glazing industry considered as a whole.
But in the past few years – perhaps as long as five years – there are signs that the double glazing business has started to become much less boring. What we are seeing – or at least beginning to see -- is this sector begin to clearly transcend the “double glazing” name or even the (more general) “insulated glazing” name. There seems to be a new business emerging that is more deserving of the name “advanced glazing systems,” a name that seems to capture the sense of novel technologies playing an important role.
What has happened here seems to us to be much more than a shift in industry semantics brought about by changing times and marketing approaches. Instead, we are talking a real shift in direction brought about by changing demand patterns and novel technologies. Such a change is surely deserving of a new name; so surely the “advanced glazing systems” epithet is a good one to use.
On Demand, Technology and Advanced Glazing Systems
On the demand side of the equation, the changes that we are talking about are pretty much common knowledge. For a number of reasons, energy has become more valuable and therefore ways of conserving energy themselves have a higher value:
• Advanced glazing systems seem to be a way to conserve energy and in a high-priced energy environment they take on growing commercial significance and appear to address larger markets
• Although related in part to the growing cost of energy mentioned above, NanoMarkets believes that the market for advanced glazing systems is also getting a boost from a more general societal environment in developed countries where a significant part of the population is concerned about “environmentalism,” in a general sense.
• Advanced glazing systems stand to benefit from this meme because they can be marketed as meeting the psychological needs associated with “environmentalism,” and because (more objectively) they fit round with the growing number of building codes and standards that have emerged/are emerging built around environmentalist and energy saving needs.
Although several firms tried to exploit similar opportunities without success in the not-so-distant past, NanoMarkets now believes that the time is right for PV encapsulation to lead to significant revenue generation for well-prepared companies. Today’s opportunities in PV encapsulation can be summarized as follows:
• Several novel encapsulation technologies, such as multilayer dyad films and high performance barrier films deposited using atomic layer deposition (ALD), are now emerging that can serve important sectors of the PV market.
These newer encapsulation technologies have implications for the rising-in-importance flexible PV (especially CIGS, OPV, and DSC) sector, especially for building-integrated PV (BIPV) and other applications. Encapsulation is a key enabling technology for BIPV, which is expected to be the fastest growing sector of the PV industry over the next decade and a diversification opportunity for encapsulation technology suppliers.
• Encapsulation firms can create larger addressable markets for their technologies by leveraging existing efforts for the PV sector. While encapsulation for organic light emitting diodes (OLEDs) is so often the focus of commercialization efforts in encapsulation, much of the work done for the OLED sector can be transferred to the PV sector with relatively minor adjustments.
For example, the optical and barrier performance requirements in PV are significantly less severe than in the OLED industry, yet encapsulation in PV requires different environmental stability characteristics and, often, much longer lifetimes. Differentiation of encapsulation products to meet the specific needs of the PV industry offers a way for firms to create a competitive advantage in PV while also expanding their market.
The same can be said of encapsulation in the food packaging industry; in this case, the PV industry has stricter performance specifications with respect to barrier level but also more room for added value, thus potentially creating an opportunity for food packaging firms to make their mark in the PV encapsulation industry where values are so much higher.
• Major efforts are also underway today to test the barrier properties of new encapsulation technologies. These efforts are creating an opportunity for equipment and testing firms, like market leader Mocon, to supply related test equipment. Both new testing models and equipment are needed for PV products that have 20-25 year lifetimes.
But Slow Growth in the PV Industry Will Limit Growth Rates in Encapsulation
NanoMarkets anticipates significant challenges to the status quo in the PV market in the coming decade. The PV sector as a whole is entering a period of flat or moderate growth in the next couple of years, and the industry remains highly cost-sensitive.
Until recently, the PV market was a boon to the materials industry, partly thanks to government subsidies. NanoMarkets believes, however, that the boom days are over for the PV sector, and the outlook for the next decade is much different from that of the last:
• First, the success of the PV industry is closely tied to the construction industry, which is still struggling in several important markets, such as Australia, Canada, France, Sweden, Spain, and the UK.
• Second, in most countries, many of the subsidies and tax incentives that have supported the PV industry for a number of years are being reduced significantly. Recall that when the Spanish government took this step several years ago, the PV market in Spain declined by 75 percent; Germany also recently sharply reduced PV subsidies, and the German PV industry has shrunk considerably as a result.
Today, the LCD market heavily dominates the optical coatings and films needs of the display industry. LCDs and their backlight units use diffuser films, polarizers and reflective polarizers, contrast enhancement and prismatic films, as well as antireflection, antiglare, and privacy films. But most display makers are now looking for the “next big thing” in displays. This next big thing could come in the form of 3D devices, OLEDs for mobile computing applications, and perhaps even OLED TVs in the near-term; e-paper has also grown in importance over the last few years.
Although most of the revenues from optical coatings and films used in the display industry for years to come will be generated by those used in LCDs, NanoMarkets believes that the opportunities in this space will be shaped by the emergence of the new kinds of displays outlined above. These new kinds of displays can be expected to create new kinds of optical films, and may create openings for new firms to establish a market presence and gain market share versus the competition.
Nonetheless, such changes could also create a problem for firms supplying optically functional display films that have long relied on a well-established LCD sector for sales. Both OLEDs and e-paper displays are backlight-free, and they thus require fewer optical film products than conventional LCDs.
Optical Films and Coatings for the LCD Industry: Multi-Functional Films and New Functionality
Optical films in an LCD include films in both the backlighting unit (BLU) and on the front surface of the display. BLU films include a reflector, a diffuser, one or more prism films, a rear polarizer, and sometimes a reflective polarizer). Front surface optically functional coatings or films include an antiglare/antireflective film and, sometimes, a privacy film (for personal mobile devices).
Over the next few years, we believe that LCDs will be locked in a battle with other kinds of displays for the visual quality that they offer. NanoMarkets believes many of the films and coatings that are used in LCDs will prove potent weapons in this fight. In addition, we think that the optical coatings/films can be utilized to lower the costs and improve the profitability of display makers, which will only be more challenged as the newer kinds of displays gain market traction.
Improving visual quality: With regard to the visual quality challenge, we see improved anti-glare and ant-reflection films as being a key opportunity since both go a long way to improving the readability or viewability of an LCD, and both are especially important in high brightness and outdoor settings.
With so much of the display industry focused on the mobile display industry, NanoMarkets sees films/coatings for reflectors as presenting another opportunity in the LCD sector in the near term, this is because they maximize brightness for the LCD at the lowest possible power consumption. Today, the simplest reflectors are made from metallic films, white paint, or a white pigment-filled film like 3M’s white diffuse reflector (WDR). However, we see a growing need for more sophisticated and higher reflectivity reflectors, which are typically fabricated with multilayers of alternating low and high RI polymers.
Although the early promise of organic thin-film transistors (OTFTs), or, more broadly, organic field effect transistors (OFETs), as well as organic or polymer-based memories has not been met, today there are signs that things may be turning around. In the last couple of years, there has been renewed interest in these devices, and NanoMarkets believes that the industry may be on the verge of a second renaissance.
This resurgence will be built upon improved material performance, the establishment of an integrated manufacturing and supply chain, and the emergence (finally) of a viable market for applications that will benefit from the low-cost, print- and solution-compatible capabilities of organic and polymeric materials. These applications include the following:
• Smart packaging, which includes food, personal care, pharmaceutical, and medical packaging, at least some of which can benefit from improved labeling that brings more value than added cost to the consumer;
• Interactive media, which includes gadgets such as greeting cards, simple toys, and inexpensive games, for which printed electronic components enable low enough price points to make them widely sellable, while still offering profitability to the seller;
• Branding and security, wherein printed electronics is a value-added component employed to reduce counterfeiting and/or increase safety or product compliance;
• Tagging and smartcards, which may incorporate printed electronics for logistics, tracking, and/or payment applications; and
• Display backplanes based on organic or printed electronic components, which have thus far suffered from fits and starts, but may emerge stronger once the emerging flexible display market gets off the ground.
With the possible exception of display backplanes, all of the above rely on the ability to fabricate extremely low-cost electronic components at very high volumes. Conventional silicon-based electronics could not achieve these price/volume points, but plastic electronics may be able to do so.
Extremely low-cost electronics are traditionally considered incompatible with conventional silicon wafer-based electronics that rely on expensive substrates and complicated lithography processes. But “organic electronics”, or more broadly, plastic electronics, in which the key functional electronic components, like transistors, logic elements, and memories, are fabricated with inexpensive organic or polymeric materials using inexpensive deposition and/or patterning processes on plastic substrates, are poised to change the paradigm.
The promise of plastic electronics is that it will usher in an era of ubiquitous or pervasive computing and communicating across many sectors, including those not traditionally considered the realm of “electronics”, like packaging, branding, and security.
NanoMarkets believes that, while the changes in the indium supply that we expect to see as the result of Chinese indium policy will benefit the firms manufacturing novel TCs, the effect could be temporary.
What the alternative TC business really needs to develop a sustainable business, however, are new applications where (1) the advantages of alternative TCs are fairly clearly understood and (2) market penetration by these materials is not as hard to achieve as in the conventional LCD market. There are now several applications where alternatives TCs now seem well positioned. And some of these have only just begun to appear.
The ongoing market evolution and spread of touch-screen technology: The alternative TC firms are already crowded into the touch-screen sensor sector, which they rightly see as having performance requirements that are well matched with what these firms’ new materials can offer right now. The alternative TC providers also correctly perceive that the touch-sensor firms do not have the same level of commitment to ITO that the mainstream display firms. And there are many touch-screen sensor firms, and just a few mainstream display firms.
The problem is that the touch-screen sensor market will probably never be that large and for the reasons just explained it is getting crowded with prospective TC suppliers. It is expected to grow fast, so the current focus of the alternative TC makers on this sector will most probably be rewarded to some extent at least.
A resurgence of thin-film solar panels: For the past few years, crystalline silicon (c-Si) panels manufactured in China and sold at very low prices have been crowding out thin-film PV (TFPV) technology in the solar panel space. However, as noted above, current Chinese industrial policy favors moving Chinese high-tech industry to higher value added products and we think this will mean the end of the subsidized Chinese c-Si solar panel era within a year or so.
TFPV—unlike c-Si PV technology—makes extensive use of TCs and is the one applications sector where ITO has largely been dispensed with. Which TCs are the best for TFPV has not yet been fully determined, although non-ITO TCOs are by far the most frequently used alternative to ITO. The choice of ITO alternative being used depends on the specific absorber layer being used. But if the TFPV market revives for any reason—it is good news for ITO alternatives.
OLEDs and OLED lighting: 2013 shows every sign of being the “year of the OLED.” For the past few years, active matrix (AM) OLEDs have become successful in the smartphone sector and seem likely to become even more popular in 2013. Beyond that, the first really commercial OLED televisions should be widely available by then and OLEDs are also expected to have a presence in the tablet computing market.
Although OLED lighting is not expected to go mainstream until the 2015-2016 period, we would also expect the availability of luxury luminaires using OLED panels to become more wide spread in 2013 and beyond, with their prices dropping to a point where the addressable market for these lighting products will have expanded to include the upper middle class and not just the very rich.
Faced with the fact that we may never know quite how ITO prices vary with the price of indium, manufacturers of alternative TCs have a number of options. They can, of course, continue to make unsubstantiated claims about the high prices of indium and how this makes the case for their alternative formulations. We have no doubt that this is what they will do to some extent and that these efforts will work to some extent. However, in the light of the above analysis, this strategic approach seems likely to have limited impact in the long-run.
Lower total costs: A more fruitful approach would seem to be to focus on a claim that alternatives to ITO offer lower total costs, primarily because they are associated with lower manufacturing costs. This case is relatively easy to make and, as it happens, is also often more valid than simply looking at changing material prices. Usually, this analysis is based on the undeniable fact that ITO deposition is a wasteful sputtering process using expensive equipment, while some of the most interesting alternative TCs use additive solution processing equipment with far less waste and lower capital costs.
At far as this goes, NanoMarkets thinks that the lower total cost argument is a good one and will be (and should be) part of the marketing strategy of any firm that is offering a new material for consideration as an alternative to ITO. The only problem with the total cost approach in this case is that this point has been made for a long time and clearly has not made major users of ITO rush to buy alternatives. We can see no reason why this would change in the future:
· One reason, that the total cost approach can be less convincing is that—whatever the total cost of ITO alternatives may or may not be—they are almost always of lower performance than ITO and to some extent that may be inherent in precisely those processes that are being touted as less expensive; solution processing being the main case in point. This is one good reason why today’s ITO users shy away from switching to ITO alternatives.
· The other relevant fact is that comparisons of capital expenditures between conventional sputtering and less conventional solution processing technology are easier to talk about than assess in practice and vary from user to user. For example, using depreciated sputtering equipment may be less expensive than using new solution processing equipment. In addition, in a capital expenditure comparison in which much depends on depreciation, the choice of depreciation method used in calculations becomes important. Engineers tend to assume that the appropriate method is straight-line depreciation, but this is not necessarily the view that would be taken by a competent management accountant.
Uncertainties, China and the future of alternative transparent conductors: The other factor that needs to be taken into consideration in any assessment of the prospects for alternative TCs are market uncertainties. NanoMarkets believes that various market uncertainties are currently powerful enough that they are in effect shaping the market for ITO and its alternatives. However, these factors work both in favor and against novel alternatives to ITO.
On the negative side of the equation, is the fact that—to put it colloquially— “better the devil that you know.” In the seven years or so that NanoMarkets has been covering the TC space, we have yet to come across anyone—user or supplier—that sees ITO as a wonder material. It is—some would say—a bad material, but just better than everything else. The point here is that ITO is a known quantity, while carbon nanotubes, graphene, silver nanowires and even conductive polymers come with many uncertainties attached to them in terms of both performance and lifetimes.
The technology gaps in the OLED industry have not gone unnoticed by the materials suppliers, which have been providing steady improvements in performance. Overall, most clearly needed by the OLED industry are materials used in the functional stack – emitters, hosts, transport and blocking materials, etc. – that enable higher efficiency and longer lifetimes at the right color points to achieve proper color gamut (in displays) or the right color rendering index (CRI) and color temperature (in lighting).
Obviously, US-based OLED materials pioneer Universal Display Corporation (UDC) and its materials partners are at an advantage here, at least with respect to phosphorescent technologies and the superior efficiency that they can provide, and with respect to customization and optimization of auxiliary materials to be used in conjunction with the phosphorescent materials.
However, a breakthrough by an outside firm based on non-phosphorescent (or at least not on iridium metal cores) could be quite lucrative to the inventing firm as well. Breakthroughs in any of a number of other materials could also translate into a significant opportunity.
The Need for Better Blue Emitters
In Lighting: As we noted above, lifetime is still a critical issue for up-and-coming key OLED applications. Some progress has been made on the color and lifetime of a light blue OLED emitter system that may advance OLED lighting. For example, UDC is now actively commercializing a light blue emitter that delivers 70 lm/W luminous efficacy and an operating lifetime of 30,000 hours (to 70% of initial luminance) in an OLED lighting panel.
While this achievement is notable, the industry still has much to be accomplished. First, it remains to be proven that this material can be scaled up at the customer with the same results. Second, even this performance lags behind that required to support a serious business case, i.e., at 100 lm/W and 50,000+ hour lifetimes, for using OLED lighting in general illumination applications.
In Displays: More critically, the lifetime problem has not yet been solved adequately for red, green, blue (RGB) full-color displays, especially with respect to high efficiency deep blue phosphorescent emitters.
In the AM OLED displays on the market today, red phosphorescent emitters are already used preferentially, and green phosphorescent systems are increasingly being adopted as well. But even in the relatively small, relatively short-lived AM OLED mobile computing applications, the blue emitter system is still dominated by a conventional fluorescent system.
Furthermore, there are no real signs that the industry will make the switch to all-phosphorescent any time soon, other than a vague promise by Samsung to adopt UDC’s phosphorescent blue “as soon as it can be qualified.”
The problem is that the larger-area applications like TVs are expected to have much longer product lifetimes than most mobile computing devices, which today makes differential aging among emitter systems a problem for display engineers and consumers alike.
NanoMarkets expects that the OLED TV industry will need to make a move toward all phosphorescent to allow the technology to establish a strong foothold in the display market. Solving this problem is a materials related issue.
Growing Demand for OLED Panels
But smartphones are, of course, only part of the story. Increases in demand are happening across the OLED industry, and the sector is booming. Nearly all segments are growing on a per-unit basis, from passive matrix (PM) OLED displays, to sophisticated AM OLEDs for tablets, computers, TVs, and white-emitting OLED panels for lighting applications. Overall, NanoMarkets predicts that, as a result, the value of OLED materials will grow from about $524 million in 2012 to over $7.4 billion by the end of the forecast period in 2019.
Of that total, the value of core, functional OLED materials – which is to say active layer materials like emitters, hosts, dopants, and hole and electron injection, transport and blocking materials, but excluding electrodes, substrates, and encapsulation materials – will reach nearly $370 million this year, and grow to over $2.9 billion by 2019, corresponding to about 71 and 39 percent of the total OLED materials market, respectively.
This growth will be realized through the following key trends:
· Phones and tablets: Today, Korean display giant Samsung dominates the OLED market, at least for AM OLED displays, so other panel makers need to get into the mobile computing market to solidify OLEDs as something more than specialty products, and to broaden the customer base for OLED materials.
The good news is that this shift is happening, with Taiwanese OLED makers AU Optronics (AUO) and Chimei Innolux, Chinese OLED maker Tianma, and others hoping to expand production in the near future. There are also persistent rumors that Apple may soon adopt an OLED display, which would greatly expand the addressable display market.
· TVs: Second, as we point out in this report, materials suppliers are in need of not only higher unit sales, but also larger average panel sizes, in order to see materials demand rise significantly. The good news here is that all signs point to the fact that the next “big things” in OLED displays will provide just that.
Larger-area OLED TVs from Samsung and rival Korean display maker LG Display are, at last, coming on the market in 2012. If the industry can both meet its cost goals and successfully convince consumers of the value of OLED TVs, they are poised to generate significant revenues from material sales in the coming decade.
· Lighting: The other big news in OLEDs is the steady, if sometimes disappointingly slow, progress of OLED lighting – another market with a potentially large panel area that will translate into high material demand.
This market is also finally seeing the beginning of a real commercialization trend. Hardly a month goes by without another luxury luminaire, designer kit, or OLED lighting installation project announced or launched, and NanoMarkets believes that the next three or four years will be a critical manufacturing (and market) development phase in advance of real growth, which will start to occur in about 2015 – 2016.
The PV market is undergoing dramatic change as the industry transitions from one of generous subsidies to one with dwindling subsidies, dramatically reduced prices, reduced margins, and anticipated massive consolidation.
As the PV module market shifts towards a commodity business model with associated mergers, and many players are weeded out of the panel area, which dominates the overall solar industry, there are many in the industry looking for new business models with greater opportunities for high margin growth.
NanoMarkets believes that one of the areas of high growth for solar PV is in building-integrated photovoltaics (BIPV). BIPV traditionally has been a smaller market due to high module cost and the fact that nearly all products were glass-based rigid products with either crystalline or polycrystalline silicon absorbers that were not particularly aesthetically pleasing.
That is not the case today. Many new BIPV products are beginning to enter the market that are flexible and can cover curved facades. They are often available in custom shapes that can cleanly cover building surfaces. They are also more pleasing to the eye, with a uniform dark appearance.
This new wave of BIPV products represents an attractive opportunity for new encapsulation materials. The current materials for flexible modules are relatively expensive to manufacture compared to the glass used in rigid modules.
However, for BIPV applications, where product lifetimes are 20-30 years, they represent a good value proposition for high-end applications today, and will have much wider appeal as costs come down. The larger opportunities will be in the newest generation of materials, which promise to reduce costs without reducing product lifetimes.
BIPV encapsulation opportunities exist for both rigid and flexible modules.
• In the near term, the outlook is good for rigid modules, as they are the lowest cost solutions available today.
• Long-range growth, however, will be in the flexible area.
• The trend towards CIGS in flexible modules will also be a big driver for BIPV encapsulation growth. CIGS encapsulation requirements are greater than those for a-Si (the current flexible BIPV absorber material), and module manufacturers are looking for the next advances in encapsulation materials for emerging CIGS BIPV applications.
After years of rapid growth, the flat-panel display (FPDs) industry is slowing down. This is due to sluggish economies worldwide, in part. But another force is at work too; market saturation. When LCDs first reached the market at affordable prices – some 15 years ago or so now – there was a huge installed base of CRT monitors and televisions just ripe for the picking.
Today, the old CRTs are mostly gone. The display industry is looking for new strategies to restore growth. One of these is to bring to market new display technologies that offer something that LCD cannot. The hope is that with the next big display technology hitting the market, consumers will be willing to swap out their old LCDs for “what’s next.” This might revive the display industry’s flagging fortunes.
A successful new display technology must offer a sufficient improvement over LCD and at an attractive enough price to incent consumers to behave as the display makers would like them to. This is not an easy goal to achieve when one considers that LCD can now boast a couple of decades of manufacturing and product engineering experience to its credit.
The Problem with AMOLEDs
A key example of what we mean here is active matrix OLEDs (AMOLEDs). Because they promise more vibrant color than LCD, as well as flexibility and dramatic thinness, they have long been touted as a successor to LCD. They are already present in the market place in small area applications like smartphones, but are expected to make a concerted push into the market segments where the display area is significantly larger, such as TVs.
But AMOLED displays have had trouble making it to commercialization. This has been especially true in large area displays, where production issues have been plaguing the technology. Additionally, AMOLED displays need high mobility backplanes because of the high current levels needed to drive light emission from the organic diodes.
Amorphous silicon (a-Si) backplanes, which are commonly used in LCD displays, have not worked well in the AMOLED environment and until recently, the only other high mobility backplane material available to the AMOLED market low temperature poly-silicon (LTPS).
LTPS is feasible in small area applications, and is in fact the backplane used in the AMOLEDs displays in the smartphone market at present. But it is prohibitively expensive to manufacture for large area screens. It has potential issues with uniformity and stability in such applications.
Enter Metal Oxides
If AMOLEDs cannot be deployed for large-area applications, then, by definition, AMOLEDs cannot replace LCDs as a dominant display technology. Worse, if AMOLEDs are restricted to small mobile displays then economies of scale for both OLED material manufacture and the production of AMOLEDs themselves cannot kick in, again thwarting high hopes for AMOLED technology. NanoMarkets believes that the technology that will cut through this Gordian knot are backplanes that are based on metal oxide thin-film transistors (TFTs). Such TFTs will also be sold into the conventional LCD sector and will generate more revenues from LCD applications than for AMOLED applications. But in the AMOLED sector, they will be more essential and will prove a key enabling technology for AMOLEDs. Here’s what metal oxide TFTs can offer the AMOLED business.
• A high mobility, with big enough currents to drive AMOLED displays and respond to the higher refresh rates of next generation displays;
• Relatively cheap large-scale production, that is easily scalable to large substrates;
• Small pixel sizes and hence, high-resolution displays; and
• Larger aperture ratios compared to a-Si, allowing for higher transmission through the backplane which can increase the brightness of the display without an increase in power requirements.
Growing Industry Interest in Oxide Backplanes for AMOLED TVs
We note that hardly a display industry conference goes by these days without multiple papers being read on oxide TFTs. And NanoMarkets’ believes that oxide TFT-based backplanes may well be the technology that propels AMOLED displays into the display mainstream. There can be no doubt that – after many years in the R&D wilderness – oxide TFTs are attracting considerable attention from big name firms such as Sharp and Samsung, the latter being especially important because it dominates OLED display manufacturing.
The primary focus of much of this activity is television sets. As we have already noted, this is where the backplane challenge is the greatest. It is also where the willingness of the consumer to switch technologies would have the most impact; because TV displays are so much larger and more expensive than mobile displays. And while all the focus on AMOLED TVs in the large OLED display space at the present time, can OLED computer displays be far behind?
However, NanoMarkets is not suggesting that in either the computer sector nor in the TV sector will change come quickly. Both computer displays and TVs are products with relatively long lifetimes and, in any case, there are other problems with large OLED displays that need to be overcome.
On the other hand, the intrinsic economics of oxide backplanes will be pushing display manufacturers to adopt such backplanes quite quickly. What oxide backplanes bring to the table are an attractive combination of low capital expenditures and low-cost manufacturing process:
• From the capital expenditure point of view, the dollar requirement for refitting a production line for large area LTPS production can run into the low billions of dollars. By contrast, oxide TFTs plants are about a sixth to eighth of that capital expenditure.
• While AMOLED prototypes were demonstrated early in 2012 with both LTPS and oxide TFTs, it is the opinion of NanoMarkets that in going forward, AMOLED TVs will favor oxide TFTs, as their low cost and production scalability are enabling factors in the AMOLED TV reaching a reasonable level of penetration.
And Smartphones Too
The role of oxide TFT backplanes in the smart phone sector is a little different than in the TV sector. On the one hand, we are talking about a sector that is much more of a reality than the AMOLED TV sector. Millions of smartphones using AMOLEDs are now shipped every year and they seem to be doing quite well in the marketplace.
In addition, metal oxides backplanes are ideal for satisfying important requirements of smartphone (and tablet) displays including:
• Low power consumption. Obviously important in a handheld device with limited battery life and where the display is a major contributor to the drain on the battery.
• Screen resolution. This has been of growing importance as consumers expect better image, photo and video quality out of their handheld devices. This, in turn, has been due to the evolution of handheld devices into entertainment products, with cameras, games and applications becoming strong selling points
• Sunlight readability. Unlike in indoor large area screens, is an important consideration for handheld displays and implies a requirement for a high degree of brightness.
NanoMarkets believes that Oxide TFT backplanes can help in all these regards; at least to some extent. This because of the inherent high mobility of the material, combined with the small pixel sizes that it can be used to create.
However, all these positive factors for the use of oxide TFT backplanes must be balanced against the fact that – unlike in the large display sector – oxide backplanes can expect to face significant competition from LTPS.
This is not to ignore the disadvantages of LTPS that we have already mentioned. However, as we have also indicated, these are less of an issue where LTPS is used in small displays, such as those found in smartphones.
But what might deter the use of oxide backplanes for smartphones is that:
• LTPS is already common in AMOLED displays for smartphones and displays makers in this sector may be quite reluctant to shift to oxides, since many of them have only recently established LTPS facilities.
• While making such a switch in the long run may be cost advantageous, equipment will have to be amortized first. Since oxide TFTs do meet the mobility requirements of AMOLED displays could still place oxide TFTs in a strongly competitive position with TFTs in the smartphone sector over the course of the next decade.
• In addition, while oxide TFTs are superior to a-Si TFTs along a number of dimensions, they are superior to LTPS TFTs only on cost. Metal oxide backplanes cannot match LTPS on mobility and driving currents. So any future switch from LTPS to oxides would have to be justified from the perspective of cost efficient production alone.
NanoMarkets believes that high mobility backplanes have a very important role to play in the AMOLED display industry over the course of this forecast period and beyond. As should be clear from the analysis above metal oxide TFTs represent a technology that offers value propositions for the AMOLED sector that are hard to match with any other available technology.
NanoMarkets has covered the market for dye-sensitized (solar) cell (DSC) photovoltaics (PV) for several years, but believes that since our last report—and certainly in the last two years, the DSC PV market has come of age and has moved into the early commercialization phase:
• Pilot line-produced commercial cells are being made and shipped to customers.
• The laboratory performance of DSCs is now comparable with amorphous silicon (a-Si) (PV), but with much more potential than a-Si PV for performance improvements down the road.
• In addition, DSC PV is compatible with flexible modules, solution processing, and roll-to-roll (R2R) production processes, which widens its applicability beyond that of most conventional PV technologies.
But these facts, which mean that DSC can expect to start generating significant revenues in the near future, are, NanoMarkets believes, obscured in the eyes of much of the PV industry (perhaps including investors) by history.
A Market in Early Commercialization
In the past, the DSC market has frequently been seen as a subset of the organic PV (OPV) industry. Most superficially, this viewpoint has existed because “pure” OPV and DSC use organic materials. More significantly "pure" OPV and DSC for many years exhibited the same low performance characteristics that relegated both technologies to the same low-end addressable markets.
This association made some kind of sense a few years ago, when both “pure” OPV and DSC had very similar performance and commercialization characteristics:
• However, DSC, as we have already noted, is beginning to look more and more like a commercially viable PV technology, while OPV seems to be mired in a permanent R&D phase, and has a measurably worse efficiency performance.
• Today, the DSC industry largely consists of a handful of firms that share a common history. Most of the dyes for DSC projects, for example, have come from Dyesol technology and intellectual property, while the basic structure itself is based on the original École Polytechnique Fédérale de Lausanne (EPFL) Grätzel/O’Regan-type cell. This kind of concentrated industrial structure has reinforced the idea that DSC is niche technology.
To the extent that DSC is amalgamated with OPV then, and seen as an industry sector made up of tiny firms, its image suffers. But NanoMarkets believes that the DSC industry will be able to break away from at least some of that negative image, based on its improving performance, which in turn will lead to broader addressable markets and a less niche-like industry structure:
• For a while DSC and OPV seemed to be suitable primarily for marginal products such as solar handbags or solar umbrellas; DSC seems to have made somewhat more progress in the building-integrated PV (BIPV) space than OPV.
The Dyesol-Tata partnership announced achievement of several technical milestones in 2011 at their product development facility in Wales. In addition, Dyesol and U.K. glassmaker Pilkington (owned by Japanese glass firm Nippon Sheet Glass (NSG)) formed DyeTec Solar to produce and commercialize semi-transparent BIPV modules based on DSC technology. DyeTec Solar announced in August 2011 that its production facility was fully equipped and ready to start prototype production.
• Although the materials focus is still with Dyesol, several other large and mid-sized specialty chemical firms have entered the DSC materials business, including German firms BASF and Merck, as well as Japanese firms Showa Denko and Fujikura.
There are a number of potential explanations why things have slowed down a bit in the OLED lighting market. Almost certainly the state of the worldwide economy has something to do with it. The ultimate goal is to sell OLED lighting on the basis of its energy efficiency, but for now OLED lighting is more or less a luxury item and such items do not easily succeed in difficult economic times.
In this context, NanoMarkets is particularly concerned about the economic situation in Europe, which seems to us to be especially negative for the OLED lighting market because so much of the OLED lighting industry seems to be Eurocentric. The largest suppliers at the present time are Philips and Osram and many of the OLED luminaire companies are also based in Europe.
Of course, most of these companies trade internationally, but European firms of all kinds understandably tend to have a disproportionate part of their business in Europe. And in the case of lighting firms, we note that Europe has always been the focus of high design content lighting fixtures of all kinds.
While the growth rates in the countries that are likely to be the sources of the overwhelming majority of the demand for OLED lighting will inevitably rise and fall over the next decade, the likelihood is that the high growth rates that existed in the economy when OLED lighting was first thought up are not going to reoccur for some time.
And with that in mind, NanoMarkets believes that it is certainly time to rethink our forecasts for the OLED lighting market in a lower economic growth world going forward.
Prospects of inflation: The benefits of long-term efficiencies from using SSL products of any kind are heavily discounted in an inflationary situation and we expect such a situation to arise as the result of governmental monetary policies hurting the prospects for growth in the OLED lighting market.
This kind of monetary-derived inflation needs to be distinguished from the impact of real price rises for energy and a return to hyper-growth in India and China would seem to ensure that higher real energy prices are also on the horizon. This could prove positive for OLED lighting as it will for any technology promising energy efficiency.
High unemployment: High unemployment in developed countries means less disposable income available for higher-priced lighting fixtures, which, for the time being, is what OLED lighting is. On the other hand, the highest unemployment in Europe and the U.S. is not found in the demographics where OLED lighting is most likely to be sold.
Continued problems in the worldwide construction industry: Such problems rob the OLED lighting industry of new construction opportunities; new buildings are an obvious opportunity for new types of lighting to be installed. If measured by the ratio of rents to capital values, among the major nations, only the U.S. and Japan have residential property markets that can be said to be undervalued and even there, construction markets are slow to recover.
Capital market uncertainties: Continuing uncertainties have reduced venture capital funding for OLED lighting companies that would have been common had the OLED lighting "revolution" occurred ten years ago.
Uncertainties about the phasing out of incandescent bulbs: When NanoMarkets began covering OLED lighting markets a few years back, we took it as a given that incandescent lighting would be phased out in all major countries during the 2011 to 2014 period.
We still think this is the most likely scenario. However, in the past year, U.S. consumers and their representatives seem to have become much more aware that an incandescent lighting phase out is planned and have expressed some displeasure at the plans. This may even become a minor issue in the 2012 national elections.
We also note that several Asian nations have general administrative plans to phase out incandescent lighting, but no actual formal regulatory or legal plans. This means that current expectations that incandescent lighting will be quickly phased out in these countries could easily remain unfulfilled. However, there are uncertainties of a more positive kind too. In Japan, following the earthquake and nuclear disaster, there is considerable talk of special government stimulus funding that might include subsidies for installing LED lighting. While, at the time of writing, this was merely speculation, it is hard to imagine subsidies for LED lighting that excluded OLED lighting.
The photovoltaics (PV) market has for the past several years been a big consumer of silver; in fact, it is now the single largest consumer of silver printing pastes, beating out even the big traditional markets like printed circuit boards and polymer thick-film membrane switches. Partly thanks to government subsidies, the solar industry has grown dramatically, including a significant growth spurt in 2010 followed by strong growth again in 2011, even in the midst of a worldwide recession.
But NanoMarkets anticipates significant challenges to the status quo in the PV market in the coming decade. The PV sector as a whole is entering a period of flat or moderate growth in the next couple of years, the industry remains highly cost sensitive, and government subsidies are waning. Meanwhile, the ongoing shift in market share toward thin-film PV (TFPV) is changing the nature of the addressable market for silver materials in PV. Specifically, there is an ongoing shift in demand for silver in PV applications from market-dominant crystalline silicon (c-Si) PV, which uses large quantities of silver printing pastes for front electrodes, to TFPV that, in most cases, requires far less silver.
There is some good news, however, and in our report we identify areas in which suppliers of silver-based materials have opportunities to expand their business. Most of the opportunities center on providing new silver-based products that help the panel makers reduce manufacturing costs. Examples are: new silver printing pastes with reduced silver loadings that do not sacrifice performance; new printable silver materials that enable the fabrication of finer resolution silver traces; and new nanosilver-based options that enable low-cost, solution-processable and/or printable fabrication of transparent front electrodes.
Changes in the PV Market That Affect Silver Consumption
First, the success of the PV industry is closely tied to the construction industry, which is still struggling in several important markets. According to a fairly recent issue of The Economist, there are a number of important countries where residential real estate is still overvalued, including Australia, Canada, France, Sweden, Spain and the U.K. And this slow construction growth affects the c-Si PV market the most—the sector that today uses the largest quantities of silver materials.
Second, governmental support in the form of consumer subsidies, tax breaks, and loan guarantees is under considerable challenge around the world, as governments look for ways to reduce budget deficits. We think that in most countries, many of the incentives that have supported the PV industry over the last several years will be reduced significantly. In some cases, subsidies are being supported with renewable energy mandates, but there are no guarantees that these mandates will be successful in achieving their goals in the long run.
All of these factors could have very serious consequences for firms selling materials into the PV sector. Germany, currently one of the largest PV markets, recently announced sharp cuts in feed-in-tariffs (FITs) that support its PV industry. The ramifications of these cuts are not yet fully known, but when the Spanish government took this step a few years ago, the PV market in Spain declined by 75 percent.
NanoMarkets continues to believe that there are opportunities for commercialization of smart coatings in the photovoltaics (PV) sector, even though the PV market is quite different today than it was just a year ago, both from an economic and a political perspective.
Starting in 2012, the PV market is entering a period of reduced growth. This new market is very different from the one of the last several years, in which year-to-year growth in production doubled (or more), even in the midst of a worldwide recession. Today, however, a glut of conventional crystalline silicon (c-Si) PV modules on the market after over-production by the Chinese PV panel makers, along with dropping prices, is expected to significantly slow growth rates in PV production starting in 2012 and for the next few years.
Meanwhile, the political environment has also changed. Lingering fiscal concerns in the United States and the European Union, coupled with slow growth and high unemployment, have led governments around the world to pursue serious cost-cutting measures in an effort to reduce debt. To date, most subsidies, feed-in tariffs, and other tax incentives for PV remain in place. However, their future is uncertain; governments are likely to see these subsidies as targets for the cost-cutting axe. (At the time of this writing, Germany has just announced a more aggressive FIT reduction of 30% vs the previously targeted 15%)
But what does all of this mean for smart coatings in PV applications? First of all, it means that suppliers of materials and technologies to the PV market cannot simply rely on high growth rates for organic growth of their products. It also means that the ongoing commoditization of PV, especially in the market-dominant c-Si PV sector, will encourage PV panel makers to do one of two things:
• Look for ways to cut prices in order to stay competitive and keep sales volumes up, or
• Look for ways to add value to their products and create differentiation in the market in order to maximize profit margins.
That portion of the PV sector that opts for the latter strategy—addition of value-added features to their PV products—is where the opportunities can be found for smart coatings suppliers. To capitalize on these opportunities, coating suppliers must actively make the case to their customers, and potential customers, that the additional cost of adding a smart coating to a PV panel or module is worthwhile to the bottom line.
In summary, NanoMarkets believes that there are significant opportunities for smart coatings suppliers in the PV business. The sheer size of the PV market as a whole means that the addressable market for smart coatings in PV is potentially large; even modest penetration in the PV market for smart coatings can lead to significant revenues for coatings and coatings technology suppliers. In addition, the adoption of smart coatings in PV can help PV panel makers accomplish two key goals important to the future success of the PV sector:
• Integration of smart coatings can cost-effectively increase conversion efficiencies for PV, and/or,
• Smart coatings can provide additional functionality that enables PV panel makers to create "premium" products and differentiate themselves in a rapidly commoditizing, and homogenizing, marketplace.
NanoMarkets' eight-year forecasts suggest that the market for transparent conductors (TCs) in both inorganic and organic thin-film photovoltaics (TFPV) applications will be about $90 million in 2012 and grow at a compound annual growth rate (CAGR) of over 30 percent to a value of over $635 million by the end of the forecast period in 2019. NanoMarkets anticipates this growth despite the current difficult overall environment for PV, in which government subsidies are under threat and in which there are huge pressures to reduce TFPV costs to make TFPV competitive with c-Si PV and with other sources of energy in general.
The biggest change since the last NanoMarkets report on this subject is the very different economic situation surrounding PV in general. By all accounts, the PV market in 2012 is entering a period of lackluster growth, which is in stark contrast to the last several years that saw year-to-year doubling (or more) of the market, even in the midst of worldwide recession. But now a glut of conventional crystalline silicon (c-Si) PV modules on the market after over-production by the Chinese PV panel makers, along with dropping prices, is expected to significantly slow growth rates in PV production starting in 2012 and for the next few years.
The other big change is in the political environment. Lingering fiscal concerns in important global markets in the United States and the European Union coupled with slow growth and high unemployment have led governments around the world to consider serious cost-cutting measures in an effort to reduce debt. To date, most subsidies, feed-in tariffs, and other tax incentives for PV remain in place. However, their future is uncertain; governments are likely to see these subsidies as targets for the cost-cutting axe. And the Solyndra scandal in the U.S. in 2011 didn't help matters with respect to public opinion related to government support of particular companies or technologies.
But what does all of this mean for TCs in PV applications? TCs are used principally in the thin-film and organic PV sectors rather than in the c-Si sector. And since TFPV in general is gaining share versus c-Si PV, the market prospects for TCs in PV applications are better than they might appear at first glance. We believe that the pace of growth in the TFPV markets will offset declines related to decreasing government support and slow overall economic growth, but we also believe that the days of really rapid growth are over, especially in the more established TFPV sectors of thin-film silicon (TF-Si), cadmium telluride (CdTe), and copper-indium-gallium-(di)selenide (CIGS) PV.
That said, opportunities exist for TCs to create value for leading-edge PV technologies. To capitalize on these opportunities, TC suppliers need to implement active business development plans designed to make the case that costs can be reduced without sacrifices in performance. Examples of the kinds of arguments that can be made in favor of particular TCs or TC suppliers include the following:
• Indium-free transparent conducting oxides (TCOs), or the "alt-TCOs", can replace whatever expensive ITO is left in the PV sector with minimal impact to existing production methods. Some TCOs are better suited than ITO to particular PV types based on their lower cost, commodity-scale availability, processing temperature window, or work function match to the rest of the TFPV cell. For example, fluorine-doped tin oxide (FTO), which is widely available in pre-coated glass sheets, is a natural fit for most rigid, superstrate PV configurations; on the other hand, aluminum-doped zinc oxide (AZO) is a good fit for substrate-configured cells that require lower temperatures for TCO deposition and a lower work function metal.
• Implementation of new target systems or new deposition processes, such as by transitioning from conventional planar targets to more efficient rotary targets wherever possible, could greatly improve utilization rates and directly affect the bottom line. In addition, TC (and equipment) suppliers can partner with panel makers on the optimization of existing deposition processes to maximize TC mobility, which would improve cost-per-watt values and improve the competitiveness of a particular TFPV technology for on-grid installations.
• For the most cost-sensitive and for indoor or shorter-lifetime applications, conductive polymer TCs can offer prospects for big reductions in cost, especially if high efficiency is not the most important factor for commercial success. Recent advancements in the conductivity of conductive polymer-based TCs, long a problem for these materials in the most demanding applications, make this argument more convincing.
• In the long-term, solution-processable nanomaterial-based TCs, such as those based on nanosilver, another nanoscale metallic coating, or carbon nanomaterials, make economic sense. Solution processing can be especially attractive for new PV lines where existing vapor deposition equipment is not already entrenched, and solution processable TCs will become an even bigger factor as the relative importance of flexible PV increases over the next decade.
• Finally, anticipated growth in the "premium" building-integrated PV (BIPV) market is opening up new opportunities for TC suppliers to expand or gain entry in a subsector of the PV market that is less cost-sensitive than the market as a whole.
The Aesthetic and Cost Promise of BIPV
Building-integrated photovoltaics (BIPV) is one of the biggest hopes for turning PV into a substantial industry that might eventually be self-sustaining without government subsidies:
· By spreading costs across both the building energy system (or part of it anyway) and the building fabric, it becomes possible to create a new economics for PV that—at the very least—will increase the size of its addressable market.
· The improved aesthetics associated with BIPV is also another factor that NanoMarkets expects to grow the BIPV market. For those whose tastes are distinctly in the modern era of architecture (or perhaps in the post-modern era), the BIPV buildings that have been built to date would certainly also qualify as beautiful. Certainly they are in contrast to a large—and very visible—panel on a rooftop rack that might be considered ugly by many different tastes.
However, while BIPV may be the best hope for a PV industry that can survive without so much government largesse, this should not be taken to mean that the BIPV market is free from government influence. In particular, we see a growing role for BIPV to satisfy building codes that call for zero-energy buildings. BIPV may also be important in obtaining LEED certification.
In addition, it is perhaps worth mentioning that while direct subsidies for PV are under threat, there are too many of them, and they are too diverse, for them to disappear completely. And there are some subsidies that specifically apply to BIPV. Such special BIPV subsides are available in China, France and Italy. Germany had them, but they have gone now; perhaps this is a sign where the other BIPV subsidies are eventually headed.
Is Transparency a Selling Feature for BIPV?
Most BIPV products are not transparent, rather they are opaque products—principally siding and roofing products—into which PV functionality has been integrated in some way. Transparent BIPV products—by contrast—address a very different marketplace. These are used not for siding or roofing, but rather for skylights, spandrels, facades and shading structures.
But even such applications are in fact, only partially transparent and while they could not be addressed by other kinds of BIPV product, high levels of transparency in BIPV glass are not achievable without a loss of efficiency and often an increase in cost. Nonetheless, transparency is the major factor that distinguishes the BIPV glass from other kinds of BIPV and, as a result, it will receive growing attention from BIPV glass firms, both as a way to compete against each other and against other forms of BIPV.
The “smart lighting” concept means different things to different people, but distilling its essence, what seems to be intended is lighting with an additional layer of intelligence that provides enhanced functionality; creating opportunities over and above the simple provision of light where it is needed:
• Smart lighting systems today, generally consist of sensors located at light fixtures, which are networked back to a central controller. They distinguish themselves in the marketplace by the nature of the sensor, how the networking is provided and the degree to which they provide management information.
• For the immediate future, smart lighting opportunities are strongly focused on improving energy efficiency, but NanoMarkets believes that the addressable markets for smart lighting will expand to include environments where the benefits being sold will include improved aesthetics, comfort and even improved health.
Some Embarrassing Questions for Smart Lighting Vendors
All of the above hints that a lot of money is going to be made in the smart lighting space and NanoMarkets believes that this will ultimately be the case. Nonetheless, NanoMarkets notes that manufacturers of smart lighting systems must—as part of their business case—answer some questions about what is new and different about their systems:
• Although presented as something new under the sun, smart lighting is clearly related to the residential and commercial building automation systems that have been touted by various firms since the oil crisis of the 1970s. These systems cannot be said to have been abject failures; they are certainly used in commercial and industrial buildings to some extent. But building automation is not the huge industry it was supposed to be. And for one reason or another, building automation systems have not often been used to control lighting systems. They are more likely to control HVAC. This raises the issue of whether there is now enough incentive for automated lighting systems to be widely used and what that incentive is. What does today’s smart lighting systems have that the old building automation systems lacked.
• One can also see something of the smart lighting system concept in the simple sensor that switches on and off lights in rooms. These are especially common in rest rooms in relatively low occupancy buildings where these rest rooms are not used all the frequently. These systems are clearly useful, but can hardly be considered an opportunity. There do not seem to be large addressable markets for this kind of simple sensor plus light system that remain untapped. But given that, does the market need a more complex system, such as implied by the smart lighting concept?
NanoMarkets anticipates significant challenges to the status quo in the photovoltaics (PV) market in the coming decade. The PV sector as a whole is entering a period of flat or moderate growth in the next couple of years, and the industry remains highly cost sensitive. Meanwhile, the ongoing shift in market share toward thin-film PV (TFPV) is changing the accepted landscape of available PV technologies. This movement, in turn, is causing a shift in demand for transparent conductors (TCs) in PV applications from market-dominant crystalline silicon (c-Si) PV that uses little or no TCs to TFPV that, in most cases, requires the use of high performance TC electrodes.
Changes in the TFPV Market that Affect TCs
The PV market has, for the past several years, been a boon to the materials industry. Partly thanks to government subsidies, the solar industry has grown dramatically, including a significant growth spurt in 2010. NanoMarkets believes, however, that the boom days are over for the PV sector, and the outlook for the next decade is much different from that of the last. First, the success of the PV industry is closely tied to the construction industry, which is still struggling in several important markets, such as Australia, Canada, France, Sweden, Spain, and the U.K. Second, we think that, in most countries, many of the subsidies and tax incentives that have supported the PV industry for a number of years are going to be reduced significantly. Recall that when the Spanish government took this step a few years ago, the PV market in Spain declined by 75 percent.
This slow growth affects the c-Si market the most, but the TFPV market is not immune. And the penetration of TFPV will happen gradually, rather than sharply, and we are not certain it will happen rapidly enough to overcome sluggish overall growth prospects. The end result of this analysis is that the TC industry can no longer rely on the TFPV industry to provide new business based on rapid growth. Complicating the picture, too, is the fact that growth will occur only as long as the TFPV industry is able to keep up with the continuing cost reductions in the c-Si sector, and as long as the flood of low-cost Chinese silicon modules cause minimal disruption to the TFPV business models.
The expected trajectories of the different PV sub-sectors and their impact on the TC business are quite different:
• The success of cadmium-telluride (CdTe) PV, driven by a single firm, First Solar, has created a de facto entrenchment of a single TC type, namely fluorine-doped tin oxide (FTO) in this PV technology. Until now, this situation has meant that there were few opportunities for other materials (or other suppliers) to gain entry. However, with the recent entry of GE into the fray, things may be changing in CdTe PV. And since First Solar’s success has proven that CdTe PV can effectively compete with c-Si PV, we expect that other panel makers may also explore implementation of CdTe PV. This new scenario could present opportunities for TC suppliers to gain entry by offering products that provide an additional efficiency, cost or other market-differentiating advantage beyond that which FTO can offer.
• The situation has not been so great at firms producing copper-indium-gallium-(di)selenide (CIGS) PV. The shuttering of Solyndra in 2011 and the exiting of Veeco in 2010 caused some concern that CIGS was headed for failure, but we think instead that the struggling industry needed the consolidation. Those that remain may be in a better position now to learn from the mistakes of the failed firms, and innovative firms will look for new ways to reduce costs and improve performance, both of which are very much tied to the choice of TC.
• Thin-film silicon (TF Si) is still around, and still accounts for the biggest chunk of the TFPV market. We expect this sector to remain large throughout the period covered by this report, but we also anticipate that its market share will continue to shrink as other more cost-effective PV technologies take hold. In this market, we think that cost cutting, rather than innovation, will rule the day, which means that low-cost alternatives that require minimal changes to implement—i.e. principally transparent conductive oxides (TCOs)—will see opportunities to expand or gain entry.
• Meanwhile, organic PV (OPV) and dye-sensitized cell (DSC) PV have struggled to take off as quickly as expected, and the outlook for these sectors, although promising, remains somewhat uncertain. OPV and DSC have thus far mostly used ITO TCs based on legacy rather than strategy, while these technologies have developed. However, OPV and DSC are now entering a do-or-die commercialization period during which the realities of scale-up are front and center, and where the need to keep costs down and performance high will favor evaluation of many different TCs, including those like nanosilver and conductive polymers that promise low-cost, sputter-free processing.
Full color, AMOLED displays are now part of the mainstream, with Samsung’s Galaxy smartphone products leading the way. OLED TVs appear (finally) ready for commercialization in the next year or so. OLED-based lighting is also already on the market; although these products consist almost entirely of luxury lighting at the present time, large lighting panels for offices may just might be the next big thing in the lighting market. (Or at least the big-thing after the next big thing.)
One materials company – Universal Display (UDC) – seems to be benefitting strongly from these trends. UDC has pioneered phosphorescent OLED (PHOLED) technology for quite a few years now and it is widely accepted that only the use of PHOLEDs will enable OLEDs to reach the efficiencies required for truly deep penetration by OLED technology.
Already, almost all commercially available AMOLED products already employ PHOLED technology, with only the blue PHOLED emitters still lagging (a bit) in lifetime performance. And there can be no doubt that UDC is a huge beneficiary from this situation.
Nearly all of the important OLED manufacturers are already UDC licensees, including Samsung, which currently makes more than 90% of the OLEDs in the world. Other UDC licensees include LG, Lumiotec, AUO, Chi Mei/Innolux, Panasonic Idemitsu Lighting, Pioneer, Konica Minolta, Philips, Sony, and NEC. That’s a pretty impressive list!
Understandably, in the suddenly booming state of the OLED industry, other firms would like to be in the PHOLED space too. Duksan and Sun Fine Chemical are two possible contenders in this space, for example. It is also well understood that the only effective way to undermine UDC’s dominance in the OLED materials market is weaken UDC’s IP position. Based on this understanding, patent challenges – some successful, others not – have been brought in Japan, Korea, and the EU.
So one has to ask the question, “just how vulnerable is UDC really?” And our answer to this question is “Not very. At least not in the short term.”
UDC holds key patents related to iridium phosphors. No one disputes this, and recent “news” that UDC’s patent had been invalidated in Europe was misleading. The EU patent office upheld UDC’s claims on iridium emitters, although it did request that claims be based on other core materials be separated out into other applications.
It is also true that three patents have been invalidated in Japan in a suit brought by Korean materials supplier Duksan, which has a vested interest in not losing its Samsung business to UDC. But the invalidated patents were not fundamental composition of matter patents. Also, the JPO decision is under appeal, so the ultimate outcome is still unknown.
Meanwhile, the UDC juggernaut rolls on. The company has continued to sign both new and extended licensing agreements. For example, both Pioneer and Panasonic Idemitsu licensed the UDC technology last year, and Samsung recently renewed its license of UDC technology, saying that it plans to start using UDC green emitters and plans to commercialize products with UDC blue materials "as soon as they can be qualified." Even Lumiotec, which had been holding out without a UDC license and launched its first products on an all-fluorescent platform, recently reached an agreement with UDC and is now transitioning to PHOLED technology.
And, UDC has also its own de facto development line in the US in the form of its joint development project for OLED lighting with Indian firm Moser Baer. The heavy involvement of UDC means that the Moser Baer line can effectively serve as a "test bed" for UDC materials, which will further strengthen UDC’s ability to maintain its dominance in the industry. In addition, UDC has at one time or another announced working partnerships with DuPont (in the solution-processed material business), GE (in the R2R OLED business), Novaled (once rumored to be a UDC acquisition target), and others.
And we believe that the various IP challenges currently amount to the usual semi-desperate attempts by other materials firms to gain some competitive advantage over UDC, which cannot be achieved by any other means.
For example, we expect that UDC is going to end up in an increasing number of patent disputes in important countries including the U.S. Now, UDC has plenty of cash on hand to defend itself against any future attacks on its IP; the company is currently sitting on about $250 million raised from investors last spring. But as we know, courts are unpredictable institutions and it seems reasonable to believe that at some time and in some place, some court is going to invalidate an important UDC patent.
Also, the EU court decision makes it clear that UDC cannot claim property rights over non-iridium cores. Such cores are in development and when they appear, the force behind UDC’s patents may be seriously diminished.
The good news for UDC is that commercialized non-iridium materials would seem to be years off; although surprises happen. Meanwhile, to adjust to the new realities, UDC will have to transform itself into a new kind of company and we are beginning to see the company do just that through its expansion into other OLED materials – hosts, HILs, ETLs, encapsulation chemistries, etc.
With these other materials, UDC can capitalize on its reputation for high quality and it strong supply chain relationships. And it may even develop strong new IP along the way.
But in the meantime, we suspect that the assault on UDC is only just beginning. As the OLED industry gets bigger and bigger there is more and more incentive for other firms to come gunning for it.
In NanoMarkets' upcoming report on conductive coatings, we identify two key growth areas:
• Fast growing and highly dynamic application areas such as solar panels, emerging electronics, etc., where the needs for conductive coatings are still in a state of flux. NanoMarkets firmly believes that some conductive coatings firms are going to make considerable amounts of money in these sectors, where they will benefit from growth in the underlying addressable markets; but the flip side of this scenario is that these markets are constantly shifting ground, and demand for new materials can disappear here as fast as it appears. Put in economic terms: they are quite risky!
• Legacy applications, where there are still plenty of examples of existing coating technologies that are less than perfect. Electroless copper for electromagnetic interference (EMI) shielding coatings and indium tin oxide (ITO) transparent electrodes for displays could be cited here. There are fewer risks for entering coating manufacturers, but also less opportunity to build a very large new business. Still, we think that it is encouraging that conductive coatings firms that look hard into existing markets are likely to find some new ways to make money.
While in a broad sense the applications for conductive coatings haven’t changed much in years, there are some important trends that are shifting demand patterns. In the solar energy sector, NanoMarkets expects to see a growing emphasis on energy conversion efficiency as solar subsidies begin to go away. This shift translates into a need for more effective electrodes and hence for improved electrodes. With energy storage also becoming more important, there are new kinds of batteries and supercapacitors on the market that also need higher performance electrodes. These demands for better electrodes obviously translate into new opportunities for conductive coatings of various kinds going forward.
Meanwhile, the display industry is itself looking for ways to adjust to the fact that the boom days for LCDs are over. On the one hand, this effort includes trying to squeeze the biggest possible margins out of the (still gigantic) demand for LCDs that remain. On the other hand, it means looking for entirely new business opportunities outside the mainstream LCD industry. To date, these opportunities have included e-paper, OLED displays, transparent displays and flexible displays. All of these new types of displays have appeared on the market (with varying degrees of success) or are about to do so.
The details of these changes in the display industry are not all that important here, but suffice it to say that all of these new kinds of displays represent a challenge to the dominant transparent conductive coating: indium tin oxide (ITO). No one – and certainly not NanoMarkets -- believes that ITO is going to be anything other than the dominant transparent conductor for a long time to come. However, it is also impossible to doubt that the trends described above in the display industry will not enhance the opportunities for new conductive coatings of various kinds.
While these developments in the display and solar panel industries are new – or at least new-ish – and, we think, deserving of immediate attention for market strategists in the conductive coatings industry, it is also important to recognize that trends in the electronics and communications industries continue to promote growth in the conductive coatings market. Thus, there is nothing really new in the following items, but they continue to counteract the core maturity in the conductive coatings space:
• The expansion of electronics, especially of electronics that support pervasive wireless computing, is fueling growth in the market for EMI and radio frequency interference (RFI) coatings. Legacy products will continue to do well, but new solutions for shielding are also expected to grow. This application was once considered slow growth, but has transformed into one that has greater potential than ever before.
• Electrostatic dissipation (ESD) and antistatic markets are benefitting from the trend toward pervasive electronics, and are further fueled by the onward march of Moore’s Law, which makes errant charges ever more harmful in electronics manufacturing and assembly. Antistatic coatings for packaging and industrial clothing are likely to see a boom as feature sizes decrease.
Lithium-ion batteries are a technology poised to see a large growth in revenue in the next five years because of their potential in applications such as electric vehicles (EVs), consumer electronic devices and Smart Grid applications. That there is a clamoring in the market for a drastic improvement in lithium-ion battery technology is obvious to see:
• EVs are trying to compete with the internal combustion engine, an established technology that is likely not going to be beaten in the mass market anytime soon.
• Smart and application laden consumer devices are rife and are only becoming more application heavy, which is a huge draw on battery life.
• Additionally, power companies are pushing to respond to residential and industrial energy needs with smart energy grids to reduce the number of brown outs and blackouts and the ability to integrate renewable energy sources into the grid.
Of all the battery chemistries contending for a place in these markets, the lithium ion is arguably the best poised to enter and capture sizeable portions of these segments or at least has a fighting chance to do so, but a performance increase is necessary to assure this battery chemistry gains a strong foothold.
The Importance of Electrodes for Lithium Battery Performance Improvement
A fact worth noting here is how mature the lithium-ion market is. It is not a market where disruptive, performance enhancing technology is common. But with a sudden projected increase in unit volume and performance demand, there is now potentially a very large market that is not having its needs ideally met.
The realizable market opportunity exists because of the plateau that the current industry standard electrodes have reached. Technological innovation currently provides a minimal increase in performance year to year in current lithium-ion batteries:
• It is more processing improvements and improvements in cell design that have been providing incremental improvements in battery performance in the recent past.
• However the performance demands of the market are growing at a pace too quick for the tweaks that can be made to the current battery to match. This mismatch between the expectations and needs of the market and the inability of the current industrial state of the art has provided a technological gap that needs to be filled. Since performance of the lithium-ion battery is so heavily performance driven, a large opportunity here exists for developers of anode and cathode materials.
To successfully enter and maintain its hold in the newer market segments listed above before strong inroads are made by other battery chemistries, the lithium-ion battery, NanoMarkets believes, needs materials advancements to propel it out of the performance plateau that the current industry standard has found itself in. As a result, the time is ripe for a profound improvement in the performance of the lithium-ion battery, and novel electrode materials are being investigated to provide this:
• The current graphite anode, and the lithium-cobalt cathode used in the most common lithium-ion chemistry are at the point of being phased out because they are nearing the limit of technological innovations that significantly improve their performance. The fact that the lithium-ion battery hasn't had a strong performance boost in recent years, leaves the door open for other battery chemistries to make strong cases for themselves.
• Nonetheless, there is no outstanding novel electrode material technology that has made it to the production line and satisfies the expected increasing demands in battery performance.
• Additionally, certain technologies have proved to be better at addressing specific value propositions. There are inherent tradeoffs when attempting to improve the performance of the lithium-ion battery, and this makes it nearly impossible to find a material improvement that will provide an improvement on all fronts. Each technology addresses the needs of particular market segments, and with targeted efforts, material developers will see a real revenue opportunity from potentially high volume and/or high growth market segments.
The development of advanced materials that will replace the current state of the art anodes and cathodes is based on the improvement in energy density and/or (depending on the market segment) power density provided to the battery. Having mentioned the "make or break" nature of the energy and power density properties, it is important to note that each market segment will identify certain key secondary properties that materials developers need to have a very strong handle on. Weight, form factor, life cycle and environmental impact are a few such examples. This is where product differentiation among electrode technologies will decide which materials will excel in a given market segment. While the differences may be subtle between market segments, it is the deciding factor between materials producers not aligning the value proposition of their product with the demand of their target segment.
Cathode improvements: Cathode materials tend to provide more diversity in terms of the cell characteristics they have an impact on. While anode materials are being investigated mostly to improve the energy density of the cell, various cathode materials can either improve the energy or the power density, provide faster charging times, more safety and/or lower costs.
The cathode reaction in the lithium-ion cell is also a safety concern, and while the potential to improve the energy density must be considered, the stability of the materials in the cell environment is a crucial concern.
A lithium-manganese based cathode is right now the furthest penetrating competitive technology to the conventional lithium-cobalt cathode. Other materials that bear looking at are:
• Lithium iron phosphates and their derivatives.
• Composites of nickel, manganese and cobalt are being developed specifically for the automotive market segment. With development being pushed in tandem by established companies in both the battery and automotive spaces, we can expect this technology to be a frontrunner to capture the opportunity in that segment.
Anode improvements: Next generation anode technologies are typically identified by their potential to hold lithium ions. In general, replacement anode materials have been less common than those for cathode materials:
• At this stage silicon, nanostructured carbon, and oxides of titanium and vanadium have been identified as viable alternatives to graphite for this enhanced ability.
• The metal oxide materials are seeing development in the labs of the larger, more established materials suppliers. Hence, their entry time into the market is expected to be quicker due to ease of integration with current battery manufacturing processes.
• Silicon has the highest theoretical capacity for lithium ions, but until recently has had problems with durability. However structural modifications to the silicon electrode have let it become a potentially disruptive technology in this market. The silicon anode is a materials technology that is being pioneered by smaller, early stage companies hoping to make a strong impact in the industry. While it has a longer development timeline, its potential to make an impact is sizeable, making it a materials technology worth investigating.
Nanomaterials: The manipulation of the physical structure of the active electrode material also creates another opportunity in this space. In an effort to increase the surface area for the storage of charge and to address issues with durability (due to the significant expansion and contraction of some materials when they take up or release lithium ions), developers are using processing techniques to create nanostructured versions of electrode materials.
Nanoparticles or nanotubes in the form of a powder are examples. The opportunity that could be realizable here is for producers of binding materials that provide a conducting matrix in which the nanostructures can be embedded. Binding materials are already being used in batteries to hold together powder based electrodes and improve conductivity, and will continue to see applicability as electrode materials are pushed towards powdered forms to increase surface area for lithium-ion absorption.
Finally, a big question materials developers will need to answer as they see a realizable opportunity before them in a very mature market is how they are going to integrate their product into the production line of battery manufacturers.
The more established companies like Sony, Sanyo and Samsung will already have this in mind when thinking of the materials they are developing but new entrants to this market will have the added burden of creating manufacturing processes compatible with current production processes unless they want to bear the manufacturing cost of the entire battery. A company's approach to this challenge will be a significant product differentiator and will determine of which market it can realistically meet the unit volume demands.
From NanoMarkets' upcoming report, CIGS Photovoltaics Markets 2012
Thin-film photovoltaic (TFPV) cells using Copper Indium Gallium Selenide (CIGS) as the absorber material have been promoted as the “next big thing” in PV for almost a decade.
After years of results that have been disappointing compared to consensus expectations, it is high time to take a sober look at the market for CIGS going forward in light of the current state of the technology and competitiveness of CIGS compared to other PV technologies. Other factors playing into the mix are the likelihood of decreased subsidies for PV going forward in North America and Europe, and the effect of significant increases in known reserves of natural gas, which have lowered and stabilized prices compared to the volatility and high prices seen in the 2007-2008 timeframe.
While there have been many disappointments for CIGS both with respect to the technology and its viability compared to competing products, the available data today is becoming much clearer with respect to:
• How close CIGS is to credible large-scale production than it has been before,
• Its price compared to other technologies, and
• The reliability of CIGS modules in real world applications.
As the efficiency of CIGS material is the highest of the thin-film PV absorbers, and it can be made into flexible modules, the key area where CIGS seems poised to dominate is in the building integrated photovoltaic area (BIPV). Here its light weight and efficiency, which increases the amount of electricity generated per area, are significant advantages over competing technologies.
While some start ups in the field such as Solyndra have imploded, other large manufacturing firms have aggressive CIGS product ramps planned. The increased competition from Taiwan and China will result in a shake-out in the industry, but ultimately will yield a price point that will likely lead to the adoption of CIGS in BIPV and others areas where module flexibility and high efficiency are key “care about” areas.
After many years of being no more than a niche, the smart windows market now seems as if it is about to generate major revenues for companies that are actively involved. Drivers include:
• Growing consumer awareness of energy conservation, green building, fuel efficient transportation, and the desire for novelty and convenience.
• Larger addressable markets as the result of emerging middle class populations in Asia (India, China) and Latin America (Brazil).
Meanwhile, new smart windows technologies are emerging that enable energy conservation through smart windows and hence are providing several growth opportunities for various companies in the smart window value chain:
• The smart windows market provides growth opportunities to everyone from materials/coatings suppliers to glass manufacturers to window manufacturers, and most importantly to end users such as builders, building owners, home owners, and transportation owners.
• No matter what technologies emerge as the winners, glass manufacturers are certainly going to be the beneficiaries of smart window growth. One factor that will help with acceptance of the slightly higher cost of smart glass compared to the standard glass used in buildings and transportation is the already high current cost of standard glass; substituting standard windows with functional smart windows with only a marginally higher cost will be more easily accepted by the consumer.
• As the demand volume for smart glass increases, there will be further growth opportunities through cost reductions for smart coatings and materials and in smart glass manufacturing.
Passive Smart Windows
Although awareness of smart windows has only increased in recent years, in reality smart windows have existed for at least the last 15. These older smart windows were produced by retrofitting existing windows with window films based on low-e coatings that provide energy savings. We classify these retrofitted windows as passive smart windows; while these films are functionally smart, they do not provide their functional benefits “on-demand”.
• There are many retrofit window film products that impart functionality and provide other benefits to windows. These benefits include the blocking of harmful UV radiation from sunlight, the blocking of heat coming inside through the window in the summer, and the retention of heat inside a room and the maintenance of the ambient indoor temperature in the winter. They all enable energy conservation by reducing the use of energy to keep buildings warm in the winter and cool in the summer.
• There are other window film products that also improve the aesthetics of the room. These films eliminate the need for traditional window treatments such as blinds, shades, curtains, etc. and save on maintenance costs.
Although the films designed for retrofitting of windows have been available for a long time, due to their evident additional installation costs, the market for these products has started growing only in recent years along with the increasing awareness of energy conservation.
A note on self-cleaning windows: Yet another category of passive smart windows is self-cleaning windows. These windows offer more convenience than energy savings. Owners of buildings (commercial and residential) spend quite a bit of money and time to maintain the windows so that they provide a clear, aesthetically pleasing view of the exterior environment. However, while self-cleaning windows do provide the benefit of eliminating the labor costs associated with maintenance, the cost of applying these coatings vs. the savings in maintenance costs is difficult to justify for existing windows.
NanoMarkets therefore believes that self-cleaning windows will be more easily adopted in new construction where the impact of the additional cost of self-cleaning coatings can be softened with the overall cost of a smart window. As the self-cleaning window concept becomes more accepted in new construction, the cost of self-cleaning coatings will decrease and enable growth in the retrofit market as well.
Supporting the case for a future in which nanometals generate new business opportunities is the fact that they have—under other names—been around for some time already. This means that there are established technical skillsets, supply chains, etc., that can be brought to bear on the current nanometal opportunities. What one must take into consideration in assessing the market potential for nanometals are:
• Very thin layers of metals are routinely deposited using vacuum evaporation, sputtering, etc. in the semiconductor industry. Although this industry regularly operates at dimensions under 100 nm, it is not usually considered to be “nanotechnology,” presumably on the grounds that sub-100-nm microelectronics is part of a mature pattern that follows Moore’s Law, while nanotechnology is supposedly something leading edge. Nonetheless, the above indicates that the fabrication machinery exists to set down metals that are nanometals in at least one dimension.
• Some nanometals are now used routinely in medical and healthcare applications. Nanosilver powders are a powerful antibacterial and antifungal agent and colloidal nanosilver has been used in a variety of treatments for decades. Nanogold has some interesting applications (at least potentially) in the treatment of cancer and other diseases.
These established uses for nanometals again suggest established skillsets that can be leveraged into other applications spaces; electronics and energy applications. But there are also other ways in which the use of nanometals in medicine has implications for the energy and electronics space. One of these is the fact that developments of new materials for medicine have implications for medical electronics. Another is the fact that history here has implications for how much it may be possible to regulate nanosilver and therefore restrict its use/sale in electronics and energy applications. The regulatory powers of government agencies are often defined in terms of their power over “new” materials and it has been argued that—because of the longstanding use of colloidal silver—nanosilver is not new.
• There is also already a supply chain of sorts for nanometals for energy and electronics applications. However, these applications are today found mostly in the R&D/university research community. This is a start, but it is important to remember that this community has entirely different needs than the commercial electronics and energy industries. Most obviously we are talking about much smaller volumes in the research community and higher prices than the commercial electronics and energy industries could support.
Less obviously, the research community is anxious to have available as many nanomaterials as possible so that they can explore as many different directions as possible. By contrast, mainstream industries want to standardize on as few materials as possible, so that experience curves can be climbed and economies of scale achieved. One implication of this situation is that there are opportunities for firms to develop reformed supply chains for nanometals that are more appropriate to the higher volume markets that NanoMarkets sees appearing in the near future.
There is nothing intrinsically new about transparent electronic materials. Glass and (more recently) transparent plastic have been used as substrates for displays, solar panels and large-area sensors for years. In addition, a range of transparent conducting materials—notably indium tin oxide (ITO)—has been developed for use in transparent electrodes. And, of course, optoelectronic materials—of which there are many—must be transparent to some degree.
Until quite recently the statements above were at best a set of interesting, but unconnected, observations. Over the past decade new transparent electronic semiconductor materials—primarily metallic oxides—have appeared and there are now increasing signs that a complete transparent materials set may emerge in the electronics sector. These materials, NanoMarkets believes, will serve as an important enabling factor for new products in the display, smart windows, lighting, solar panel and large-area sensor markets; perhaps other sectors too.
Despite appearing to be very different, these application areas actually have quite a lot in common; in fact they overlap. A smart window could also be a display, lighting or solar panel, for example. And all of the areas mentioned above qualify as large-area electronics in some sense. Finally, displays, smart windows, solar panels, panel lighting and large-area sensors are similar enough that they share a number of important desirable features such a strong aesthetics, efficiency, etc.
While each of these product types has its own requirements, the similarities among them seem sufficient for this entire group of applications and products to benefit in similar ways from a coherent and comprehensive transparent materials set. Such a materials set would serve as a key enabling technology adding features and functions to transparent electronics. In other words, there is an opportunity to develop a more comprehensive and higher performing transparent materials set that could enable transparent electronic products to evolve to a point where they themselves can generate more revenues. This, of course, is also an opportunity in its own right.
Oxides, Organics and Nanotech: Materials for Transparent Electronics
Parts of the electronics suite are already well developed. This is particularly true for transparent conductors, which have received considerable attention over the past few years. This high level of interest, however, has occurred not so much because of transparent electronics in the sense that we are using the term here, but rather because of the need for improved transparent conductors in the display and solar panel industries more generally. In particular, these industries have looked for ways to get around the lack of flexibility and high cost associated with the industry standard transparent conductor, indium tin oxide. Transparent conductors that have been proposed as an alternative to ITO include transparent conductive oxides other than ITO, conductive polymers and various nanomaterials.
The Effect of the High Price on Silver on the Industrial Inks and Pastes Market
Silver has always been an expensive metal and probably always will be. But the most obvious change in the silver inks/pastes market since our last report is the seemingly persistent high price of silver, with no relief in sight. Silver commodity prices have been pushed upward because of the uncertain global economic environment in which investors have shifted increasingly toward “hard” assets. Silver ETFs have accumulated large stores of silver in order to handle the increased demand for precious metal investments.
At the time of writing, silver prices have somewhat stabilized, but they have done so at a level nearly twice that of just two years ago (in inflation-adjusted dollars). And there are no good reasons that the situation will change very much over the next five years or so.
None of this is especially good news for the silver inks and pastes business, since the price of these materials is largely determined by the price of silver and these materials are often sold into moderately price sensitive environments. Despite these negatives, however, there are some reasons for executives in the silver inks and pastes business not to feel too depressed:
• The high price of silver is now a fact of life for the electronics industry. On the one hand, its unique conductivity characteristics ensure that silver is hard to dispense with in many applications.
• Where silver inks and pastes can be dispensed with their high price will enable supplier firms to develop silver inks and pastes substitutes with an assurance that the market for them will persist. In the past, silver ink/paste substitutes have appeared and then disappeared when the price of silver fell again. Given the current economic climate, it seems that the manufacturers of silver ink/paste substitutes are in for the long haul this time around.
• Counteracting ongoing worldwide economic sluggishness will be increased industrialization and urbanization of the developing world; which is likely to increase the per capita expenditures on the kinds of products in which silver inks and pastes are used. And, of course, silver inks and pastes are now used in so many consumer products that the increase in the world population is itself a spur to demand for silver inks and pastes.
• There are a number of interesting applications for silver inks and pastes that are just emerging. They include, for example, OLED lighting, and sensors. NanoMarkets believes that there are real opportunities here, but we also caution that some traditional applications that use quite a lot of silver paste at the present time are likely to experience at best modest growth, and this could hurt the silver inks and pastes business in the next few years. Examples here are plasma TVs (in long-term decline) and crystalline silicon solar panels (a market likely to see a decline in government support).
In a touch display, the touch sensor sits on top of the display (or potentially it is integrated into the display) and the display itself is most likely to use conventional LCD technology, although e-paper and OLEDs are also a possibility. Both the sensor and the display will use transparent electrode material and in both cases this material at the present time is likely to be indium tin oxide (ITO), but alternatives to ITO are increasingly a realistic possibility.
In fact, it is possible for the sensor and the main display in a “touch screen” to use a different kind of transparent conductor. This possibility is reinforced by the fact that the touch sensor is typically manufactured by a specialist sensor firm, which is not the major LCD firm that makes the underlying display. Indeed, among the manufacturers of transparent conductors, touch-screen sensors, these days, are everyone's favorite market for ITO alternatives. The reasons for this are easy enough to understand:
• The touch-screen display market is exploding. Touch screens have been found in niche applications since the 1960s, but with the arrival of iPhones and tablet computers, touch has become ubiquitous. Almost all touch display technologies make use of ITO, so there appears to be a growing opportunity/addressable market for ITO alternatives for the touch sensors used in touch displays.
• Touch-displays seem to have a special and immediate need for ITO replacement. ITO is notoriously fragile and inflexible. Touch displays are—by definition—touched frequently and therefore the sensors are at risk of damage. This would seem to enhance the need for ITO alternatives in this sector.
• It is easier to get into the touch sensor business than into the main flat-panel display business. There are numerous firms in the touch sensor business, but far fewer flat- panel display (FPD) makers and in any case—given that they have invested huge amounts into display fabs—they are always reluctant to take on new materials or processes. In addition, touch sensors often have somewhat lower performance requirements than FPDs, making market entry for novel materials makers somewhat easier.
Another related issue is that touch-sensor firms already buy-in their transparent conductor on a film and what the firms that sell alternative transparent conductors have on offer is, in a sense, "plug compatible." Compare to the main LCD makers, who do their own sputtering and are unlikely to abandon their unamortized sputtering plant or take on the (potentially large) economic switching costs of entirely new transparent conductor materials and processing technologies.
Development of OLED technology for lighting markets is not as mature as for displays, but NanoMarkets still expects this sector to grow dramatically over the coming decade. And because OLED lighting panels are likely to be a (1) a mass market and (2) consist of panels a lot larger than the average OLED displays, the market for OLED lighting materials should ultimately be a lot larger than those for materials in the display sector. However, much more risk is associated with the lighting sector, for materials suppliers and just about everyone else.
NanoMarkets believes that materials suppliers will play a big role in whether the OLED lighting industry booms or settles into a niche pattern. For real, sustained growth in OLED lighting, new, better materials and processes are needed to enable this growth.
OLED Lighting Manufacturing Capacity Shaping the Need for Materials
The OLED lighting materials business will be shaped initially by the needs and preferences of those pioneer firms that are bringing the first OLED lighting panels to market. At the present time, the manufacturing infrastructure for OLED lighting is still at an early phase of development, but it has moved past the laboratory stage to pilot plants. From at least some of the OLED manufacturing companies, there have also been statements of intent regarding both plans for expansion and the kinds of manufacturing facilities that they plan to deploy. However, these statements have been made over a period of years, and it is hard to know how seriously to treat them, especially in this era of financial instability.
This uncertainly presents a real challenge to the materials firms hoping to supply the OLED lighting industry. The challenge consists of determining how much capacity there is likely to be for OLED lighting over the coming decade, who will be providing that capacity, and where the capacity will be built. It also includes determining which materials will be required. Will the OLED manufacturing continue to largely run classic vapor deposition equipment, or will solution processing take hold? If solution processing succeeds, will it be in the form of small-molecule materials or will polymer OLEDs finally make a play in lighting?
OLED Lighting Materials: Risks and Uncertainties
Some of the OLED materials firms that we have talked with, see exciting possibilities for their businesses in the OLED lighting market, but they also perceive the high risk. For now these materials firms are now supplying relatively small amounts of OLED materials to these first OLED lighting manufacturing plants may well emerge as the materials market leaders later in the decade. Among the most important current
issues that materials firms have tho think about in the OLED lighting space are:
- The dominance of phosphorescent emitters from Universal Display Corporation (UDC) in important sectors of the OLED lighting market;
- The increasingly important role of Chinese OLED materials suppliers;
- The significance of solution-processable small molecule OLED technologies; and
- The continuing failure of polymer OLEDs in the OLED lighting market.
The situation of all of these areas is very fluid and in all of them changes could completely reshape the opportunity profile for OLED lighting materials suppliers.
The dominance of UDC: At the moment, UDC holds an essential position with a dominant intellectual property (IP) portfolio focused on small-molecule phosphorescent emitter technologies. And even more importantly, UDC has been very successful in getting OLED lighting manufacturers to employ UDC technology, through partnerships and licensing deals.
However, the recent invalidation of a key UDC PHOLED patent in Japan may mean that the market will open up to other materials firms. This decision is under appeal, and its long term implications have yet to become apparent. In the past, the ability of other materials firms to gain a foothold in emissive technologies for OLED lighting has been hampered by UDC’s dominance.
The role of China: There are now several Chinese firms making OLED materials, and there is at least one firm in Mainland China – Visionox – producing OLED lighting panels. Most of the principal OLED materials firms are in the developed world but given the determination of the Chinese government to create more domestically sourced IP and given that OLEDs are a particular topic of its attention, NanoMarkets believes that competition from Chinese companies in the OLED lighting materials space.
Solution-processing of small molecules: This solution processing approach has the potential to deliver the advantages of solution processing to the OLED industry without forcing the industry to shift to an entirely new kind of material (i.e., polymers):
However, at this time, only GE, in cooperation with DuPont, is planning to use solution-processable small molecules to build OLED lighting panels, and it not certain whom else DuPont – and any others developing solution processable small molecules like UDC – can persuade to buy into the idea.
At the same time, GE is struggling to commercialize the solution-processed materials, and the current status of the GE pilot line is uncertain. It is not yet entirely clear what this will mean for the future prospects of solution processing in OLEDs, but we think it is safe to say that solution processing – especially printing – has proven much harder than the industry initially expected.
Polymers in OLED lighting: Sumitomo Chemical with its ownership of CDT controls the nexus of polymer OLED EML material IP. However, although Sumitomo and other proponents of polymer OLED technologies continue to push for polymers to gain entry into the market, not a single OLED lighting manufacturer is actually using polymers today. As a result, Sumitomo remains a marginal player in the OLED lighting space.
NanoMarkets believes that polymer OLEDs might have a role for really large lighting panels at some time in the future, but given the lack of activity with polymers in lighting today, we think that it is fair to say that betting on a vibrant market for polymers in lighting is taking a big risk.
How Materials Firms Can Win the OLED Lighting Battle
For now the only serious commercial markets for OLED lighting are to be found in the luxury luminaire market and that is where the OLED lighting business will stay unless costs can be reduced. All projections – including ours – that show OLED lighting reaching revenues in the billions of dollars assume major reductions in OLED lighting costs from where they are now. This is not an entirely materials related issue.
Nonetheless, it is closely related to materials and it presents opportunities for the materials makers:
Economies of scale that will come into being as the OLED business as a whole ramps up. At the moment, pricing for OLED materials sits uncomfortably between the kind of pricing one expects for materials sold largely into R&D environments and ones that apply in commercial specialty chemical markets. Opportunities exist for materials firms that can shift their pricing structure more towards the latter.
Initial costs for OLED lighting – as for other solid-state lighting – will be high and the only way that OLED lighting can be expected to prove in economically will be in terms of a total cost model. This in turn depends heavily on lifetimes and also on luminance, both of which are heavily materials-dependent challenges. Several different materials in the OLED stack can affect lifetime, including the emissive technology used and the quality of the encapsulation scheme.
Indeed, cost is not the only factor critical to the success in the OLED lighting space that the materials firms can impact and with which they can achieve a competitive edge. Much of the raison d’etre for OLED lighting in the first place is enhanced efficiency and that is very largely a materials issues.
There are also materials issues that relate to panel itself:
At the present time, OLED panels are quite small; too small to be competitive in the office lighting market, for example, which is where some observers of the OLED lighting scene, expect OLED lighting to get its big break. Materials – both substrates and active organics – may have a role in taking OLED lighting to the next stage; that is larger panels.
The stage after that, as many people see it will be flexible – or at least conformable – lighting panels. This transition to flexibility is materials dependent and will rely on the availability of suitable substrates and, most importantly, on high performance/low cost flexible encapsulation materials.
Thus the future of the OLED lighting market is heavily dependent on materials selection, and the maturity—and prices—of available OLED materials remain a challenge to market. However, this should be seen as an opportunity for materials makers, especially since the potential volumes are so high. Assuming for the moment that OLED lighting is able to capture even just a few percent of the lighting market, the square footage of OLED lighting sold will be considerable and will easily outshine the amount of OLED material sold for displays. This makes it a market that OLED materials suppliers cannot afford to miss.
The value that would be created by a flexible glass material has long been recognized. Supposedly the Roman Emperor Tiberius was presented with a drinking bowl made of flexible glass. The Emperor threw the bowl on the floor and it dented rather than shattered. But not much seems to have been heard of flexible glass since. NanoMarkets research has uncovered that over the past few decades the term “flexible glass” has come to be used in a metaphorical sense, to describe a series of materials that were made from resins and plastics and that otherwise had glass-like properties. Unfortunately these flexible pseudo-glasses could seldom compete with actual glass in terms of transparency or in its barrier qualities.
However, since the early 21st Century a handful of leading glass companies have been developing genuinely flexible glasses that are the heirs to Tiberius’ bowl. The firms involved in this work include AGC (more commonly referred to as Asahi Glass), Nippon Electric Glass (NEG), Tokyo Electron Glass (TEG) and Schott Glass. However, the firm that is most closely associated with flexible glass is Corning, which certainly has the greatest mindshare in this space and has done the most business development work to promote the concept of flexible device.
Nonetheless, actual flexible glass has proved slow to develop and bring into the marketplace. This is surprising in a way in that all we are really talking about here is regular glass that has been made exceedingly thin so that it can be flexed. Meanwhile, a few flexible pseudo-glasses remain out in the marketplace, but are sufficiently different from real glass to be a distinct category of product and to be clearly distinguished from regular glass in terms of the value they can offer.
Conversely, as the Tiberius story seems to suggest glass is highly and intrinsically valued, but its inherent rigidity would seem to detract from its value. The story also suggests that flexible glass could address some very large markets indeed and this possibility shouldn’t be dismissed lightly. However, for now the flexible glass will be used primarily within what would be regarded as the electronics industry.
More specifically, there is an understandable connection made between flexible glass and flexible electronics, because flexible glass would apparently represent an excellent substrate and barrier material for flexible electronics products. However, NanoMarkets believes that there are more immediate markets for the first wave of flexible glass offerings to tap into.
When NanoMarkets first started providing analysis of the transparent conductor (TC) industry, some six years or so ago, the industry was easy to characterize. ITO ruled the roost, except where the market was looking for especially low-cost solutions; in antistatic applications. True, executives in the display industry – and even in the transparent conductor industry itself – knew all the unkind things to say about ITO. It cracked, it cost a lot, even that it had a yellowish tinge, etc., etc.
When one examined at the alternatives, ITO began to look pretty good. None of them could compete with ITO on the crucial transparency and conductivity parameters. In any case, most of the alternatives to ITO were not ready for prime time; at best they were in that limbo phase called sampling. The threat to ITO from its rivals was negligible.
The one exception to this rule was in the thin-film PV (TFPV) application, where alternative transparent conducting oxides (TCOs) quickly made their mark. First Solar the dominant supplier has adopted FTO as its transparent conductor, while most of the firms in the CIGS space use AZO. In the a-Si PV sector, FTO and AZO are also used. As an aside, there is an important takeaway from all this. Applications that are relatively new – such as TFPV – are more likely to adopt new TCs. By contrast consider the conventional – and highly established -- LCD industry, which continues to demonstrate considerable reluctance to ITO alternatives.
While the use of TCOs other than ITO in the TFPV industry is proof positive that, ITO doesn’t always get to win; it hardly represented a paradigm shift. It was, after all, a just a switch from one TCO to another. In the past year to two years, we have seen something genuinely new in the TC space; the rise of the nanomaterials.
Nano-TCs: More Firms, More Materials, More Applications
By rise, we have in mind three things. First, while there have been firms around developing nanomaterial approaches to rival ITO, there are now a lot more such firms and they appear to have been quite successful in attracting capital. Second, there is now considerable diversity in the nanomaterials being offered in this sector. A few years back nanomaterial challenges to ITO consisted entirely of carbon nanotube inks. Take a look at this space now and you will also see silver nanostructures in solution, silver grids, copper-based solutions and graphene. As NanoMarkets discusses in its upcoming report, we would not be surprised to see nanostructured polymers also enter this fray.
The third aspect of the rise of the nanomaterials materials that needs to be considered is that some of these materials might now reasonably be considers to be commercialized. True, some of these materials remain well within the lab, but some are out there is products that you can buy now. One of the important messages that have come out of the interview program that NanoMarkets has just completed with manufacturers of TCs is that several nanomaterials are now commercialized. They are being used in a very small number of products and often in limited quantities. But in the past year they have crossed an important barrier.
Marketing, Messaging and Conductive Nanomaterials
What all this means is that firms that have in the past focused on developing materials that can be sold into the TC space must now change track and focus on marketing. Until now such firms have largely been able to get away with vague statements about targeting the touch screen market, or “flexible displays,” or something of this sort. But this won’t get them very far in terms of actually generating new business revenues.
One part of the marketing strategy for “nano-TCs” will certainly be to match the material’s capability to the opportunities. A material that will make a superb antistatic coating for the outside of a touch panel may be completely unsuitable for the transparent conductive material in the touch sensor itself. In a few cases, nanomaterials may actually facilitate new applications. The example that is usually mentioned in this context is that of flexible displays; but flexible displays have challenges other than the TC one. Where we are seeing nano-TCs going where ITO fears to tread is in the large panel sector, where ITO isn’t sufficient to bring the electricity to the outer limits of the panel. Such panels exist in the PV sector and it is easy to imagine similar problems appearing in large displays or in the OLED lighting sector.
Above all, the nano-ITO firms are going to have to message effectively and this is something that they have never done especially well. For example, we often hear about how ITO suffers from a yellow tinge. But how much does this really matter in the marketplace, especially when your nano-TC has a blue tinge or a grey tinge! One factor that does matter of course is cost and if you can show that your nano-ITO is lower cost than ITO you are in good shape. But what does that really mean? Are the old stories about the impact on the price on indium on the price of ITO just old wives’ tales? Some people think they are. But NanoMarkets analysis suggests that we just don’t know!
Messaging and marketing are going to be major challenges for firms offering new solutions (both literally and figuratively) in the TC marketplace.
While our recent report is not intended as a guide for venture capital (VC) or strategic investors, but it is possible to identify some market needs in the OLED encapsulation sector that may be of potential interest.
The following factors that lead us to believe that there are some real opportunities for investment include:
• 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.
Given the above factors, 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.
From where will the investment originate? We do not anticipate any new outside investment in cover glass encapsulation. Instead, we expect 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 we have 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).
But what kind of investors are we really talking about? Are these venture capital opportunities, or something else? In NanoMarkets' opinion, we think that additional or new VC investment is unlikely, if for no other reason than that the OLED industry has already been around long enough for VC firms to get in (and get back out, in some cases); the time for high risk/high return investing has probably passed. Investment from angel investors is more likely than VC investment, but again here we think their time has largely passed.
In contrast, investment in the form of takeovers by large industrial firms, especially big consolidated firms in the display or lighting device or materials industries, is far more likely.
• Large and mid-size firms already in the display or lighting markets can more readily be pulled into strategic deals based on synergies that lead to larger cash flows than pure equity investors would realize.
• In addition, NanoMarkets believes that it will continue to be important for encapsulation firms to be sufficiently linked into the OLED supply chain, and that it will be increasingly important for all existing and new encapsulation suppliers to partner closely with end-users.
• In fact, we have already seen OLED manufacturers acquire encapsulation firms with Samsung's de facto takeover of the Vitex Barix technology, and we expect this trend to continue with other encapsulation firms.
NanoMarkets will be releasing a new report in November on flexibe substrates. See here for details.
Flexible electronics have attracted a great deal of interest in recent years. At least in theory, they offer a number of important advantages for displays, lighting, solar panels and sensors. In addition, flexibility to some degree is implied in the notion of R2R processing. Each of these applications requires different strategic thinking about the appropriate flexible substrate to use, but there is also an important commonality which NanoMarkets believes will create a vibrant market for flexible substrates of all kinds.
The Big Problem With Selling Substrates into the Flexible Display Market: Flexible Displays Don’t Exist!
Flexible displays have been proposed for about a decade now and have been on show at display conferences and exhibitions for about as long. They are frequently cited by literature in the printed and organic electronics disciplines as an important trend for the future. In addition, within the community of firms making materials suitable for flexible substrates, there is a view that there is considerable potential for making sales to a vibrant flexible display market of the future.
For the time being this potential is just that - potential and little more:
• We think that substrate firms should be careful not to talk themselves into believing that there is more here than meets the eye. Certainly, they should not expect much short term revenue from the flexible display sector. As yet there have been no flexible displays that are commercially available and promises made by a few firms to bring such displays to market have been broken.
• That said, flexible displays do seem to have the potential for real world applications -- if anyone could build them, that is -- and the recent announcement by Samsung that it plans to introduce these displays to the market has lent them considerable credibility.
The main application for flexible displays would be to enable portable displays of reasonable size that can be plugged into a cell phone to serve better as a video device or IT tool. The first real rollable displays now look like they will as likely be OLED displays, since OLEDs can provide superb color, while the most common e-paper technologies are color-challenged:
• Conformability only would seem to be good enough for flexible substrates used in signage applications.
• From the substrate perspective, rollability will probably suffice for now in the display sector, but the idea of a display that can be crumpled up and put in one’s pocket, implies three-dimensional flexibility - a technology that doesn’t exist yet.
• Three-dimensional flexibility would seem to fit well with the e-paper concept, since real paper is flexible in this sense. For a time, “e-paper” and “flexible displays” seem to be synonyms for each other.
Substrates for flexible displays may be relatively undemanding in terms of durability, at least at first when they are used with cell phones; cell phones generally last between a year and two years. However, electrical and optical requirements for substrates used in displays may be more stringent. For example, a substrate that stretches a bit might be acceptable for a PV panel, but with a display it would tend to distort the picture. Very tight electrical specifications are required for much the same reason.
OLEDs are highly vulnerable to oxygen and water vapor, so they present an encapsulation issue; developments to improve barrier performance have been discussed in the OLED industry since its earliest days. Until recently, however, OLED encapsulation materials represented a relatively small market for chemical companies and a few startups. For many years there were few signs that OLEDs were going to break out of their niche market pattern, with almost all of the OLED market being accounted for by passive matrix displays for MP3 payers, cell phone sub-displays, etc.
The situation was further complicated by the popular notion among OLED manufacturers that encapsulation was the least of their worries, since most OLEDs could be successfully encapsulated in a stack that often also included desiccant under glass using epoxy adhesives for edge sealing. The simple glass and epoxy encapsulation approach was not only all that was required for small displays, it was all that display makers were willing to pay for, and it continues to be the principal encapsulation strategy in place today.
Even as the size of the passive matrix OLED business grew, true opportunities for OLED encapsulation were highly limited, and few materials firms were able to sustain a business based on encapsulation materials alone. And although materials suppliers were initially happy to supply these applications, they did so with the expectation that markets large enough to justify their efforts would eventually emerge.
Finally, A Growing Market for OLEDs Emerges
Fortunately (at least for encapsulation systems makers), the opportunities have grown in recent years in important ways:
• OLED displays have at last been “mainstreamed” with the arrival of mass-market cell phones containing active matrix OLEDs as primary displays; NanoMarkets has estimated that the size of the total OLED materials market exceeded $300 million in 2011.
• Meanwhile, OLED lighting is now on the market in the form of “designer” chandeliers and table lamps, and larger segments of the lighting market are likely to be penetrated by OLED lighting in the next few years.
• And while the first attempts to introduce OLED TVs stumbled, it seems that 2012 or 2013 will see the introduction of OLED TVs on the market with much greater chances of market success than the products that preceded them.
These trends mean that the addressable market for OLED encapsulation materials is rapidly growing and should continue to do so. Importantly, the fastest-growing applications for OLEDs involve larger-area panels that by definition consume relatively larger amounts of materials. NanoMarkets predicts that the OLED materials market will reach over $5 Billion in sales by 2018, and at least 10%, or about $500 Million, of this revenue will come from encapsulation materials and technologies. But the success of the market is not a foregone conclusion; better encapsulation technologies at reasonable costs are required if larger-format OLEDs are going to meet their potential.
NanoMarkets predicts that the OLED materials market will increase from $317 million in 2011 to just over $5 billion in 2018, with revenues from cathode, anode and encapsulation materials gaining in importance over the period.
This strong growth is fueled by a sea change in the status of the OLED industry. For many years, the industry has been plagued with the low volume/high price conundrum for several years. Bu that that situation appears to be changing, according to NanoMarkets’ recent report Markets for OLED Materials-2011. Cell phones with OLED main displays are now completely mainstreamed, there are perhaps as many as 20 different kinds of OLED luminaires available for purchase and the large display makers look like they are going to put a serious effort into marketing an OLED TV in the next year or so.
For the better part of a decade, OLED materials have represented little more than a niche opportunity for specialty chemical companies and a few start-ups. These firms existed solely to serve the needs of the slow growing market for passive matrix (PM) OLED displays used in some niche applications. What is clear now, however, is that active matrix (AM) OLEDs have now matured to the point that they are about to explode into the consumer electronics marketplace. As a result, the addressable market for OLED materials will expand considerably:
• The arrival of mass-market cell phones that use OLEDs for their primary displays – the widespread use of active matrix OLEDs in Samsung phones in particular – has dispelled any doubts about the market potential for AMOLED technology.
• The potential for OLEDs is possibly greatest in the large television market, an area where color quality obviously means a great deal. Samsung, Sony and LG have all produced OLED TVs. Panasonic (in conjunction with Sumitomo) and Seiko Epson have also have worked on developing OLED TVs. LG executives have been quoted as saying that they expect to ship a 40-inch OLED TV by 2012 and that the company will build a plant capable of producing 50-inch OLED TVs with a completion date in 2012. It will not begin mass producing OLEDs until 2014, however.
• Considerable attention is now also being given to lighting using OLED panels. The high efficiency of OLEDs has attracted the attention of governments around the world that are funding programs to promote solid-state lighting (SSL) as a replacement for the incandescent bulb. At the present time there are about 20 different OLED luminaires on the market costing in the $2,000 to $5,000 range. There have also been a slew of customized showroom installations and light sculptures that have used OLED lighting.
Despite these encouraging signs, technical issues must be addressed. New equipment and processes are necessary if traditional vapor deposition techniques are to be employed. And blue OLED materials with longer lifetimes are needed for red, green, blue (RGB) full-color displays. And these developments will need to stay ahead of continuing advances in LCD technology. Significant research programs within the industry are making progress, though, and NanoMarkets believes these technical issues will be addressed in an effective manner within the next eight years.
Emerging technology markets are difficult to forecast in part because new applications often depend on several component innovations. Each of these technologies evolves independently, but the application cannot emerge until all of the components are sufficiently mature.
Smart labels for shipping and logistics are such an application. They incorporate RFID tags, sensors, and batteries. For cost reasons, the ideal smart label would use printing technology for all three components. Yet printed electronics are just beginning to become commercially important, and as a result the technology needed to support smart labels is only starting to emerge.
The first element, the RFID tag, is probably the most mature. In its most basic form, an RFID tag is simply a remotely readable memory. It stores anywhere from a few bits to several megabytes, depending on the tag, and draws the current it needs via induction, from an RF coil in a reader device. While it’s generally agreed that future supply chains will depend on RFIDs to track everything from work-in-progress to shipping containers to individual retail packages, concrete applications have lagged behind forecasts.
RFID tagging requires a substantial investment in both the tags themselves and the supporting infrastructure of readers, data management software, and so forth. The benefits of tagging may not be realized until every item that moves through a facility is tagged, which often means that many different vendors and customers must support the project. In an airport baggage handling facility, for example, untagged pieces of luggage might have to be placed in tagged bins. The added costs of handling untagged items would offset some of the benefits of tag-based handling.
Meanwhile, ongoing weak global economic conditions have slowed all forms of business investment. Expensive projects with uncertain financial returns will continue to move slowly as long as economic conditions remain poor. At the same time, even with relatively slow adoption rates of adoption the market has already progressed to the point where many businesses and consumers are at least somewhat familiar with RFIDs. Millions of people use RFID-based tags to pay highway tolls and transit fares electronically; millions of dollars worth of high-value manufacturing depends on RFID-based WIP tracking.
Applications like RFID-based toll payment systems often add a battery, the second of our three components. While passive tags are only readable from a relatively short distance, powered tags can actively transmit to a reader some distance away. Powered tags are also appropriate for locations — such as inside vehicles and shipping containers, or inside livestock — where large quantities of metal or water reduce signal strength. These tags often appear in permanent or semi-permanent installations, and as a result the required battery life can be between three and five years or even longer. Such tags are expensive, however, and therefore not really suitable for disposable applications like smart shipping labels.
Hence the importance of our second key innovation, printed batteries. While conventional button batteries encase the electrodes and electrolyte in a metal can, printed batteries typically screenprint these layers onto a plastic (or even paper) substrate, then seal the battery with a second plastic film. Though they offer less storage capacity than conventional batteries, their solid-state nature makes them more durable and easier to integrate with smartcards, smart labels, and other low profile devices. Simplified integration, in turn, helps drive down the overall cost of systems containing printed batteries. While printed batteries do not yet offer the performance needed by active RFID tags, they offer compelling cost reductions for disposable applications. A battery-assisted tag may offer a compelling compromise between the performance and lifetime of active tags and the low cost of passive tags. Indeed, Nanomarkets expects battery-assisted RFID tags will be one of the leading markets for printed batteries for the duration of our forecast.
Once an inexpensive power source is available, many other applications become possible. With a battery, an RFID-tagged shipping label becomes an autonomous device, able to perform independent tracking and monitoring functions as the package moves through the global shipping system.
Cold chain management is one of the first smart label applications to appear. More than $30 billion in meat, seafood, and cheese is lost to spoilage each year, along with a similar amount of fruit and vegetables and more than $5 billion in pharmaceuticals. While it is easy to tell if a frozen package is thawed when it reaches its destination, cold chain failures are usually less obvious. A package of fish might have been sitting on a sunny loading dock for several hours in transit, for instance. Though re-frozen by the time it reaches the destination, it might already have degraded, or might have a shorter remaining storage life than expected. A medicine intended for a remote village might become less effective or even dangerous if not stored properly. Without in-package monitoring, there’s no easy way to tell that the cold chain was compromised somewhere along the way.
Which is where our third important innovation, sensors, enters the picture. Once a power source is available, combining a temperature sensor with a timing circuit allows the smart label to record its temperature at regular intervals, storing the information in the RFID tag’s memory where it can be read at the destination. Because the label is remotely readable, it can be sealed inside the package, at the same ambient temperature as the contents. Given the thermal history, the recipient can decide whether to accept the shipment without inspecting the contents. A more sophisticated device could generate an electronic alert if it detected an out-of-specification temperature, allowing corrective action before degradation of the package contents occurred.
One commercial example is the Sealed Air Turbo Tag, powered by a battery from Blue Spark. PowerID, spun out from Power Paper in 2007, focuses on tagging and smart packaging applications as well. In addition, Enfucell is collaborating with Finland’s RFID lab to develop tagging and smart packaging applications of RFIDs. This spring the company shared in a grant to Europe’s Ropas consortium, aimed at development of wireless sensors printed on paper.
The basic combination of a battery, a sensor, and an RFID tag could be applied to other types of packages as well. Precision optical and mechanical devices are very sensitive to vibrations; incorporating an accelerometer into the shipping label could show whether a package had been shaken or dropped. With potentially hazardous cargo, smart labels could alert the shipper to possible leaks or to conditions that might rupture the shipping container.
As the key components of smart labels mature, we expect what is now novel — as is often true — will become commonplace. Devices once used for high value shipments could eventually make their way into picnic coolers and boxes of holiday cookies. But for now, printed batteries are helping smart labels take the first steps from concept to commercial reality.
Forms of zinc and tin oxide have been proposed as an alternative to indium tin oxide (ITO) in the display and PV industry for many years, with mixed commercial success. In the thin-film PV (TFPV) space, alternative TCOs (alt-TCOs) have done well with fluorine tin oxide (FTO) and aluminum zinc oxide (AZO) becoming quite common at this point in time. However, attempts to sell indium zinc oxide (IZO) into the display space have not succeeded to any strong degree.
The motivation for using alt-TCOs is usually that money can be saved on materials, and most often because large amounts of indium can be avoided. This matter has taken on a new urgency in view of recent Chinese industrial and trade policy, which favors controls on exports of indium. The Chinese government has also shut down environmentally unsound indium extraction facilities. The potential opportunities for alt-TCOs seem to have grown as a result, although these TCOs also now have to compete increasingly with next-generation transparent conductors that will almost certainly outperform them given time.
Adding to the fun are new applications for alt-TCOs and the emergence of new kinds of TCOs. One new application that we see as being of considerable importance for these materials is so-called smart windows. Such windows have enjoyed niche status for many years, but may well emerge as a mass market product if the green building movement continues to fulfill it's promise.
Finally, with the help of a semantic stretch, one might consider the use of the metal oxide materials considered in this report in thin-film transistors (TFTs) as part of the opportunity space for alt-TCs. Here one is, in effect, saying that a transparent conducting oxide is also a semiconducting transparent oxide. Taken literally, these statements are simply a contradiction in terms. However, given that these alt-TCOs are neither very conductive nor very semi-conductive, we hope that the reader will forgive our embracing of this contradiction. We should perhaps mention that some of the most interesting new alt-TCOs are emerging in the context of TFTs.
The Joys and Otherwise of Sputtering
While such new applications are certainly the most interesting from a purely intellectual point of view, and we think may also turn out to be the most profitable opportunities for alt-TCOs in the end, they are certainly also the most risky. It also seems likely that they will take quite a while before they generate significant revenues.
Given the extraordinarily difficult business climate that pertains at the present time, it seems that many makers of alt-TCOs will be looking for more immediate and less risky opportunities. The least risky of these opportunities is certainly in the TFPV space, where suppliers of AZO and CIGS can simply expect to see sales rise as CIGS and CdTe continue to experience growing revenues. This application is a low risk opportunity in that all the alt-TCO has to do is follow the TFPV industry onwards and upwards.
In the past two years, the OLED lighting business has shifted from being one entirely consumed by R&D to the production of actual products. For now, however, these products are confined to luxury table lamps and chandeliers with price points measured in thousands of dollars and volume sales measured in the thousands of units, if that. Production issues are secondary considerations for such products; from the production standpoint, OLED lighting is currently a cottage industry.
One reason for OLED lighting being so niche-like is that, at today's costs, OLED lights can be no more than playthings for the rich. True, there has been some progress. Two years ago, the one or two OLED luminaires that were on the market were affordable only by billionaires. Today there are more than 30 such luminaires available and they can be purchased even by millionaires. But no one is expecting to see OLED lighting at their local supermarket—or even their local department store—before 2015 or so.
There are some commentators (without any demonstrated history in this market ) who apparently believe that OLED lighting will never get beyond the luxury market. Today, for example, you can buy OLED lighting from a very high-end furniture store such as Roche Bobois and some analysts believe that is where they are going to stay.
NanoMarkets are not in this group of analysts and, more importantly, it seems safe to assume that it is unlikely that firms of the caliber of GE, LG, Osram, Panasonic Philips, Samsung and so on would have gone into the OLED lighting business with luxury luminaires made by craft workers solely in mind. Almost certainly, their assumption is that eventually OLED lighting will reach a point where it is generally affordable and that, along with LEDs and CFLs, OLED lighting will be used widely in general illumination applications.
Certainly, most of the firms that NanoMarkets has talked with as part of its ongoing research into emerging markets in the OLED lighting space have bigger visions of where OLED lighting is headed. Most observers of the OLED lighting scene believe that OLED lighting will present a genuine challenge to more mature forms of lighting by 2015 or so, although much will depend on the ability of the OLED lighting firms to come up with OLED lighting product designs—including the luminaires—that will make this possible, both in terms of design (including form factor) and price point. Even if OLEDs take just a very small share of the global lighting market, we think this technology will ultimately generate billions in new business revenues. At least some of the large firms that have entered this space clearly seem to believe the same thing.
The recent announcement that Konarka Technologies, leader in the organic PV (OPV) space, has teamed with the ThyssenKrupp Steel Europe is a potential game changer for OPV. Interest in OPV remains strong; new firms, new capacity and new products. Yet that OPV has not fulfilled its early promise is a conclusion that remains inescapable. It was always understood that OPV would be low efficiency, but this was supposed to be compensated for by low dollars per watt too. But it hasn’t happened.
As a result, NanoMarkets’ expectations of OPV’s future have been less than optimistic. We have gone on record as saying that revenues from OPV could be as much as $56.1 million in 2011 growing to $383.0 million in 2018. These are not terrible numbers and suggest that OPV could probably keep a few moderate sized firms busy. But they aren’t numbers that could justify the amount of money that has been thrown at the OPV space by investors in recent years.
The problem with OPV has always been what to do with it; given its inherent limitations, that is. In the recent past, the best that could be hoped for in terms of early revenues from OPV was a new generation of portable solar battery chargers where OPV’s flexibility would be an advantage and its low efficiency would not be too much of a disadvantage. Beyond that, OPV seemed destined for use in novelties and oddities such as solar umbrellas. The use of OPV in building- integrated PV (BIPV) has always beckoned, in part, because of OPV’s relatively small decline in efficiency in less-than-perfect light conditions.
But “OBIPV,” as it were, has always been stymied by the need for lack of a really good encapsulation technology and NanoMarkets, in its recent forecasts, has not included the possibility of huge revenues flowing to the OPV makers from building-integrated applications. We are not yet ready to completely revise our forecasts for OPV based on Konarka/ThyssenKrupp Steel arrangement, but it certainly gives us cause to re-examine them on the basis that two serious players now say they are developing “steel roof and other construction elements for BIPV.”
Inkjet once seemed well positioned to gain revenues, market share and expanded addressable markets as the result of the demise of contact printers in the office. Ultimately, however, it lost much of that market to low-cost laser printers. As a result, the inkjet industry has been pushed into looking for new opportunities. Its most noticeable success has been in providing color printers for the home and small business markets at prices that make these printers almost throwaway items. Far less noticeable has been the rise of industrial inkjet, initially for graphics and, more recently for functional printing. With the home computing sector reaching some level of maturity, functional printing in particular (which remains at a very early stage of its evolution) looks like a potentially profitable future direction for the inkjet industry.
Functional jetting already seems to be a major preoccupation for some makers of inkjet equipment and print heads and service bureau. However, the specific opportunities for ink makers and specialty chemical companies that are inherent in “jetted manufacturing” are not always all that apparent. NanoMarkets believes that these opportunities are obscured by the extreme diversity of applications that fall under the title of “functional inkjet” and the resulting lack of color on just what kinds of inks are needed for these applications. One of the main objectives of this NanoMarkets’ analysis in the functional inkjet ink space, therefore, is to sort through this diversity and to analyze where the revenues will be generated in the functional inkjet inks business over the next eight years.
Here we define “functional printing” to include any kind of additive process that is intended to create things rather than images. As has often been noted, the biggest difference between functional printing and graphics printing is that while graphics printing is intended to produce something that is judged by its aesthetics, functional printing is supposed to produce something that works. In the view of the firms we have talked with in the functional inkjet space, making something is harder than decorating it!
Be that as it may, we believe that the revenue-generating opportunities for ink firms in the functional inkjet space fall into five different classes of printing.
The “New” Printed Electronics and the Ink it Needs
For the most part, this is what most of functional jetting is about at the present time; using industrial inkjet printers to create small devices or small parts of larger devices. Included in this class are applications as simple as printed silver interconnects between panels or devices, all the way through to completely printed computing chips.
This kind of functional inkjet can, in effect, be considered as an extension of a trend that has been around for decades in the form of thick-film printing of circuitry for membrane switches, automotive heaters and printed circuit boards (PCBs). It has also been the mainstay of photovoltaics; the silver grids that distribute the electricity from conventional (i.e., crystalline silicon) solar panels are printed using thick film techniques. Broadly, these otherwise disparate applications share the fact that they are created using screen printing and that they involve a fairly low level of patterning compared to what is the norm in the semiconductor industry.
The undoubted success of the thick-film type of functional printing helped fuel the discussions and activities of a few years ago around of the concept of “printed electronics” (PE). PE was a kind of functional printing that supposed to lead to printed devices that were much more complex/smaller than what thick-film technology was (and is) capable of. The hope of PE in general was that using printing instead of the classical fabrication technologies of the semiconductor industry would reduce the costs of manufacturing a wide range of devices including displays, sensors, PV panels, batteries, RFID chips, etc.
The argument behind this hope was that (1) printing is additive, supposedly lowering the operational and materials costs of fabrication and (2) printing machinery is, generally speaking, lower cost than classical vapor deposition and related patterning equipment used in the semiconductor industry. Although many kinds of printing were suggested or actually utilized as part of the PE paradigm, inkjet—because of its ability to finely pattern—has been frequently cited as the printing technology of choice for PE.
As it turned out, things did not go the way that PE’s advocates hoped. There were many reasons for this. There were certainly macroeconomic and other exogenous factors that have little direct relevance to the markets and ink-related matters. For one thing the PE of a few years ago seemed to seriously overreach in terms of applications. While the thick film revolution in its early days was firmly grounded in the huge consumer demand for new and better appliances and automobiles of the 1970s, PE seemed to be chasing of applications—such as flexible displays and RFID tags—for which there was little pent-up demand and whose timetable for adoption was very speculative. The world’s financial pains of the last few years have not helped much either.
However, there were more fundamental reasons why the original PE did not take off. Printing of functioning electronic devices turned out to be much harder to do than most of the people involved thought would be the case. Firms leaped into the business of printing display backplanes or PV panels and found that their early timetables proved unrealistic. Some of the early firms went forward with their general business plans but quietly started to use more conventional deposition and patterning equipment with the promise that they would eventually use printing as they had already suggested. Where inkjet printing was specifically cited as part of a manufacturing strategy this sometimes proved problematic because of scaling to higher speeds or the availability of inks.
Still “printed electronics” in the form described above seems to be seeing something of revival in the past two years or so, but the “new” PE is of a more pragmatic kind than the older type of PE that we described above. The firms and individuals in this space now seem to have much more modest expectations. Instead of being satisfied with nothing less than the printing of a complete RFID tag, they are now much more likely to be content with successfully (successful in both the economic and technical senses) printing just the antenna. We note also that representatives of PE firms are now appearing at conferences that are primarily intended for the traditional thick-film industry, suggesting that the new PE thinking is that it might make money by improving on existing business models rather than by creating an entirely brave new world of printing electronics.
Inkjet’s role in all of this has yet to be determined. From a positive perspective, we note that most of the firms that we spoke with in the inkjet industry seemed to think that the new PE would be the market sector that would generate the largest revenues for functional inkjet in the near term future. We also note that inkjet is very well established as an R&D tool in printed electronics, in part because, as a maskless technology, it is very well suited to making just a few devices.
Assuming that the new PE proves to have “legs” the primary opportunity that it seems it will create will be for conductive inks—especially silver inks—but semiconducting and dielectric inks are also an important part of this story going forward. Printing silicon has been talked about and researched for a decade and appears to be on its way to attainment, but only slowly.
Inks and Jetted Bio-devices: From Test Strips to Organ Printing
The use of functional inkjet for creating bio-devices seems to have emerged not so much from a jetting industry push, but more as the end-user community discovered that inkjet was capable of depositing small quantities of delicate materials. Indeed, one major functional inkjet provider has reported that as the first overenthusiastic wave of the PE “revolution” retreated a few years ago, it derived some sales comfort from what seems to have been something of a surprise—biomedical markets.
This segment of the market is fairly diverse in terms of both applications and in terms of inks. The applications that are usually cited as near-term ones are diabetic test strips and DNA arrays. These are already very high volume products, with good prospects for the future based on current health and demographic trends. Inkjet is already used for both these products, although there seems to be some disagreement about the degree to which it is used to create diabetic test strips.
The use of inkjet is also expected to expand well beyond test strips and arrays. Jetted biosensors have been created in the lab for quite some time, so it seems that this market could expand quite soon. It is also very much in tune with larger trends in medicine, national security and environmental monitoring. However, there seems to be considerable enthusiasm for the use of inkjet in regenerative medicine; particularly in organ and skin printing. While no one really expects this to be common in the near future, there seems to be a sense in the inkjet community that regenerative medicine will create significant revenues for inkjet.
This raises the question of what materials can be made profitably into jetted bio-inks. The answer seems to be that most can be. At various time times inks have been made out of a wide range or organic molecules (including DNA), proteins, cells, etc., although primarily in a research context. We also note that this application sector can overlap in terms of inks with the PE sector. For example, silver inks may well be used in sensors of various kinds. It also seems likely to us that for the regenerative medicine applications that some see as being jetted in the future a whole range of new inks will have to be developed.
Inks for printing on Non-Standard Substrates: Tiles, Textiles and Beyond
Printing on non-standard substrates does not quite seem to fit the usual definitions of functional printing. This is because nothing is specified about function as such, leaving open the possibility that inkjet will be used to decorate rather than to add/increase functionality.
And this is precisely the case. One opportunity that is mentioned frequently in this category is that of ceramic inks, that is inks that can coat ceramic substrates (primarily tiles) with color. This is not an easy thing to do because ceramics are so porous, so special inks are needed. The other non-standard substrate that receives significant attention in the inkjet community is fabric/textile.
In both cases, the motivation for printing onto these substrates is to create small runs of decorated substrates to respond to the consumer need for a wide range of colors and styles in tiles, fabrics and clothing and also to ensure that a specific color and pattern not be too widely distributed. Everyone wants to be reasonably certain that his or her kitchen will look significantly different from that of friends and relatives! The main reason why inkjet is seen as having an opportunity here lies in inkjet’s ability to create products in small numbers, because it is maskless.
A variety of specialized inks have been developed for these applications. Pigments used for printing onto ceramic tiles are usually large particle size, stable inorganic powders that must be able to withstand a high-temperature firing step (up to 1300°C) required to fuse the powder into the molten surface of the ceramic tile. There are even specialized inkjet printers for ceramic printing, although these seem to use sol-gel inks rather than inorganic pigmented inks. Meanwhile, some observers believe that inkjet technology has the potential to replace existing finishing and coating technologies and create new materials for the technical textiles sector. Another use for functional inkjet in the textile sector is as tool for smart textiles to put into place the materials that enable the textile to respond to mechanical, thermal, chemical, electrical or magnetic stimuli.
Inks for 3D Printing: New Life for Manufacturing
“3D printing” refers to creating a one-off (or limited volume) product, by building up the product one layer at a time. This technique has been available for some time and has mostly been used for prototyping in a wide variety of industries. However, the technique is now being expanded to the manufacture of products that are actually sold on the market.
This trend has led to 3D printing being heralded as a new form of manufacturing that might reindustrialize the developed world, create manufacturing industries in the less developed world and create an entirely new form of manufacturing environment in which a far greater variety of products than now can be highly customized, either at the factory itself, or by the end user.
Because 3D printing can be used for so many applications, the materials used for this kind of functional printing are very diverse. In addition, we note that not all 3D printers are inkjet printers in a conventional sense. There are specialist 3D printers which are inkjet-like in that they have nozzles but for large scale modeling these may enable large amounts of material to be deposited; quite the opposite to standard inkjet.
On the other hand, most 3D printing is done with more standard industrial inkjet machines and alternative approaches are available. In one method—sometimes called the MIT method—the layers are built up starting with powders, but these powders are formed into a solid layer using liquid binders which are deposited with inkjet. An additional resin may also be used to give the finished product more durability. This approach is fast and relatively low cost, but tends to produce rough looking objects and, given the number of materials, is fairly expensive.
Another approach, which is superior in a number of ways, is polyjet printing. In this process, as the name suggests, the printers have two or more jetting heads. Typically, one builds the model, while the other jets the support fluids. The support material is a gel-like substance, which is easily washed away. The final model is said to have a smooth finish and be ready for sanding, painting, drilling, or tapping.
Inkjet and Fluid Micro-dispensing: Not Quite Printing
In essence, functional inkjet machines are devices that can accurately deliver small quantities of fluid without much wastage. This fact can be exploited by using inkjet as a dispensing tool and a market for doing just that has emerged. Typically, the use of functional inkjet for micro-dispensing applications is not just to place small amounts of material, but also where they must be dispensed in the form of fine structures such as micro-lines, micro-dots, and three-dimensional structures. Although micro-dispensing isn’t quite printing, this patterning aspect makes the line between microdispensing and printing quite small.
Using inkjet for micro-dispensing has a number of advantages and, of course, which of these advantages matters depends on the particular application. However, in general, where inkjet shines in this regard is that it is a non-contact printing method (and hence can dispense onto delicate substrates) and it has the ability to cover large areas. Additionally, it is an on-demand process and conducive for printing multi-layer devices.
The fluids for which functional inkjet has been used to date include a variety of biological materials along with some non-biological materials such as solders and adhesives. Within the biological sphere, inkjet is considered to be a good microdispensing technology for reagents, enzymes and other fluids that are deposited on biological substrates. Microdispensing using inkjet has been demonstrated with a wide range of viscosity and rheological properties.
Functional Fluid Making Opportunities for Inkjet
The five areas outlined above will present considerable opportunities for materials firms and ink makers to produce fluids suitable for jetting. None of the five areas are new. Nonetheless, NanoMarkets believes that functional jetting is about see a resurgence for a number of reasons.
One of the most important of these reasons is that industrial inkjet machines have now reached a speed where they can be deployed for serious manufacturing applications, although it is important to note that we are talking about the larger and more expensive machines here. Conversely, smaller and lower-cost machines, priced at well under $10,000 may open up the market to an entirely new kind of manufacturing—desktop manufacturing—that could parallel the success of the desktop publishing revolution of a couple of decades ago.
We also note that this isn’t the only important trend with which the process of functional inkjet may be aligned. For example, within the scope of functional jetting comes a broad range of biomedical applications, all of which make small contributions to the urgent need to improve healthcare. Also, some marketing experts see the need for industry and commerce to offer more customized products in the sophisticated markets of the developed world. Here again, functional inkjet can be of help.
We believe that there is plenty of room for ink and materials firms to tap into these opportunities. Eventually, these firms will start to offer off-the-shelf inks for functional inkjet, although this opportunity still seems to be one that will not produce significant revenue for quite some time to come; it will have to await the standardization of applications, which seems a long way off. For the time being, we think that most opportunities for materials are going to require some customizing for specific applications or even specific customers. Nonetheless, we have little doubt that these are real opportunities.
Building integrated photovoltaics (BIPV) is a new and dynamic market, with complex sub-markets, and very different market entities pulling diverse BIPV technologies into use. As an extension of the global photovoltaics (PV) market, both large established PV module suppliers as well as small niche architectural firms are trying to push BIPV into the market. Historically, the volumes sold of BIPV products—relative to PV products as a whole—have been low due to both a lack of demand and a lack of dedicated products for the building industry. However, NanoMarkets believes that the demand for BIPV would have been greater had dedicated products been more widely available.
As additional dedicated BIPV products are released to the market, we think that the key decision-makers are discovering new ways to add value to buildings. Ultimately, for BIPV to yield solid business opportunities, architects, builders, and roofers all must work with proven solutions, and proven BIPV technologies provide another way to win new customers/clients. Grid-connected BIPV is not just for "enthusiast" or "Green" people anymore, and "bankable" BIPV can now provide an attractive return-on-investment (ROI) for many buildings in many locations. Depending upon incentives and lease-back financing schemes, BIPV can potentially reduce the total costs of constructing homes and commercial buildings, and may also add significant value to building retrofits.
The combination of dedicated and bankable BIPV products with proper financing can open up new addressable markets. From the supply perspective, BIPV offers new revenue-streams for PV panel suppliers, and new differentiation in the market-space for architects, builders, and roofers.
BIPV Market Drivers
Aesthetics: The first generation of BIPV systems was primarily architectural in nature. It consisted of attempts to make the PV panels more unobtrusive, by choosing thinner panels and installing them parallel to the roof surface or even hidden on a flat roof. In addition to helping PV appeal to a broader audience, the first generation of BIPV also was intended to meet the requirements of certain local governments, which have either mandated BIPV or required that PV panels be hidden from view, despite a lack of dedicated products designed to achieve these requirements.
These first-generation BIPV systems are not our primary concern in this report. Rather, we are more interested in BIPV products as opposed to BIPV design. The BIPV products we have in mind here are those that integrate smoothly with building surfaces. At a minimum, they are laminated on roofing or wall materials; more specialized products also serve as roofing or cladding themselves or even as skylights or other building features. Dedicated BIPV products, properly installed, simply look better to most observers than BAPV, and so provide a lasting value.
Costs: Inevitably, the cost of a BIPV system will be higher than a standard PV panel of a similar performance. Due to the dedicated design of second-generation BIPV systems, and the distinctly different sub-markets for roofs, windows, and sidewalls in buildings, any given BIPV product will see lower volumes compared to mainstream "utility panels" and will thus not enjoy the same economies of scale. However, with demand expected to steadily increase over the next eight years, NanoMarkets expects that BIPV products can be made on dedicated production lines and so will see steady reductions in manufacturing costs.
The ultimate goal for BIPV systems is that they can lower the total costs of construction of a BIPV-enabled building, since the cost of using BIPV materials will be lower than using conventional building materials in conjunction with conventional PV systems. However, for the BIPV market to establish itself what we are going to need to see in the next few years, is proof that this kind of economics can be established for BIPV. And this is where the opportunities lie. If costs for BIPV begin to reach the point where BIPV products can be positioned as part of a standard portfolio of high-end building materials then the demand is expected to explode.
Since cost remains a significant part of the demand equation, the dynamics of pricing must be considered. NanoMarkets considers that BIPV suppliers will target certain price-points in reference to existing high-end building materials and options. In such a scenario, the demand is not particularly "elastic" with price, but instead should spike up once threshold levels are achieved.
Three Approaches to Building Integration: Rigid, Flexible, Transparent
From a product perspective, NanoMarkets believes that the BIPV market fits best into three broad categories, based on the function that the BIPV products serve in the building envelope. These categories are (1) rigid BIPV tiles and panels, (2) flexible BIPV products and laminates, and (3) transparent or semi-transparent BIPV glass products. Each of these product categories are at a different level of technological maturity and also have significantly different addressable markets.
Rigid products: Rigid BIPV products generally rely upon crystalline silicon (c-Si) or multi-crystalline silicon (mc-Si) wafers as the cells from which to build customized building cladding structures. The silicon wafers required may be obtained from any supplier, and the module manufacturing required may not be significantly different from that needed to create conventional PV panels, which are overwhelmingly rigid.
However, the aesthetic and functional and regulatory requirements of BIPV create new opportunities for product differentiation compared to mainstream PV panels. Consequently, NanoMarkets believes that there are distinct opportunities in this space that BIPV can tap into in a manner not available to conventional PV panels.
Rigid BIPV products that are available or planned include tiles that are designed to interlace with conventional roofing tiles or cladding materials; larger tiles that serve as entire roof portions or wall portions themselves; and thin, flush-mounted panels that overlay conventional roofing or siding but are specifically designed for flush mounting on buildings.
Flexible products: Flexible PV laminates are a newer direction for BIPV than the rigid systems described above. Besides flexible PV laminates, which are designed to be glued onto existing building materials such as metal roofing, there are also products like flexible shingles that interlace with conventional asphalt shingles. Also coming soon are flexible building materials with PV cells built or deposited directly onto them. These products aim to integrate the PV panels more completely with building materials than today's laminates that are applied in a separate installation.
The flexible product segment of the BIPV market clearly involves novel products and as such represents a riskier business proposition than the rigid BIPV products described above. They are also reliant on using newer materials platforms; primarily thin-film and organic PV, since these materials are flexible and conventional c-Si PV is not. It is still an open question as to which of the several thin-film/organic approaches to PV is best suited to flexible PV.
Transparent: BIPV glass products can generally be considered as a sub-class of "Smart Windows," specifically similar to electrochromic windows in that active electronics are involved in both functional types. In many cases, transparent BIPV based on thin-film PV technology is a way of using glazing to make PV cells and modules into decorative building features. Several companies have announced plans to integrate semi-transparent thin-film absorber materials with transparent conductors to compete directly with electrochromic glass windows. Both amorphous-silicon and CIGS thin-films have been explored as the PV absorber material.
The initial markets for BIPV glass are in skylights, facades, curtain walls, and shade structures such as canopies and it can often be easily built to custom dimensions and shapes, either by adjusting the number and spacing of crystalline silicon cells or by cutting thin-film PV panels to size. The possibility of windows that are also PV panels should start being realized, but the manufacturing platforms necessary to produce glass of this kind in high volumes still seems quite far off. Initial BIPV glass windows will be created on pilot lines with limited yields and profitability.
Thin-film batteries can be defined in a number of ways. For the purposes of this article, we will use the term “thin-film batteries” in the loosest and most literal sense to describe any battery that is thin. Thin, in this case, refers to length scales on the order of microns. By and large, this will be used to imply a battery that is all solid state in nature and is deposited by thin-film manufacturing techniques. We make this distinction to differentiate thin batteries from printable batteries, which are covered as their own topic in a separate report published by NanoMarkets, though there are certainly devices in which the distinction begins to blur. And, of course, both thin-film and printable batteries are very different in design and manufacture from the more usual kinds of small batteries found in stores.
We note that there is also another definition of thin-film batteries that is considerably more specific, although fairly frequently used. This is the definition of thin-film batteries that refers specifically to the thin-film rechargeable lithium batteries that were developed by Dr. John Bates and his team of scientists and engineers after more than a decade of research at Oak Ridge National Laboratory (ORNL). In the view of some of the firms and individuals active in the thin-film battery space, and to whom we have spoken, only technologies based on ORNL’s design and chemistries are truly thin film.
The New “Smartness” as a Driver for the Thin-Film Battery Market
The emphasis on such niceties is in some ways indicative of the way things used to be in the thin-film battery business. NanoMarkets has been covering the thin-film battery market for five years now and has often indicated a sense of this technology being one that is in search of applications. In such circumstances, it is no surprise that the thin-film battery industry dwelt on issues such as definitions.
The time when thin-film batteries can be characterized as a technology desperately seeking something to do has not yet passed. But the fact that some of the firms in this space (Cymbet, IPS and Solicore) have received significant investments in the recent past seems to indicate that things are changing. NanoMarkets believes that this “something” is the growing mega-trend towards “smartness,” that is, the embedding of computer chips and sensors in everyday (and not so everyday) objects.
We speak of smart grids, smart phone, smart appliances, smartcards, smart packaging, and smart medical devices. These smart devices are appearing now and they all add additional—and presumably more useful functionality to earlier, dumber versions of the same device. While such trends have been talked about for a while, they actually seem to be appearing in the real world at the present time.
There is an increasing use of smartcards, particularly for a stored-value card in public transportation systems. Distributed and inexpensive sensor networks make it possible to monitor complex systems, such as traffic patterns or the health of a remote oil or gas pipeline, with as much fidelity as desired. These sensors can report wirelessly in real time. Radio frequency identification (RFID) tags track the location and contents of inventory, also in real time.
The new “smart world” can be powered in a number of different ways. In some cases, completely conventional batteries can be used. But in many cases; this is prevented by an inappropriate form factor, weight, or by lack of flexibility; this is the case with powered smartcards, for example. In some cases, these devices may be powered to some extent by an energy harvesting approach or by an inductive field generated by some kind of reader system, but battery power installed in the electronic device itself usually enables such devices to provide a much higher level of functionality. For example, battery-powered smartcards can have their own displays for one-time password security or to print the balance of the stored value—something that would be hard to achieve any other way.
The Business Case for Thin-Film Batteries
This is a wave that thin-film battery firms must catch, if they are finally to generate money for their shareholders. They cannot hope to make a success by simply improving their performance, since such an approach misses out on the crucial demand-side factor. In addition, while some thin battery makers have attempted to create their own markets by inventing applications for their batteries—cosmetic patches for example—this is not an especially easy thing to do, especially for a small company. And while thin-film batteries are solid-state batteries and hence safer than conventional batteries, the battery safety issue seems less of a selling point than it was a few years ago, after there had been several well-publicized incidents of exploding batteries.
To finally make money in the thin-film battery space, NanoMarkets believes that suppliers of these products will have to demonstrate that (1) their battery technology can enable new smart applications; that is, these applications will be either impossible or impractical without such batteries and/or (2) reduce the total cost of ownership of the powered device.
While these value propositions can be brought to bear on many different areas in the new world of smart technology, large sensor networks provide a good illustration of how they can be applied.
Consider the case of a sensor network that monitors the health and activity of a natural gas pipeline. The pipeline snakes through a remote location for hundreds of miles. Could these sensors be powered with conventional batteries? Possibly. But this raises the issue of the life of the battery being shorter than the life of the pipeline, so that there is the prospect of replacing hundreds or thousands of batteries along the length of the pipeline; a prohibitively expensive proposition. A thin-film battery combined with an energy scavenging device can last for years and therefore significantly reduce the total cost of ownership of the sensor device, when the cost of battery replacement is eliminated.
Could energy scavenging devices be used on their own in such cases? Again, possibly. But if real-time data is required, this solution will not work as there may not be sufficient energy available at all times. In this sense, the thin-film battery combined with an energy harvesting device is an enabling technology for a smart system that might not be able to be effectively powered any other way.
The Cost Issue: The Elephant in the Room
While the smart “revolution” that is beginning to take shape is what is going to make profitable the efforts of the thin-film battery industry over the past few years, it won’t show the cost-related “elephant in the room” the exit. That is, thin-film batteries are, for the most part, lithium batteries that are a lot more expensive than regular batteries. This is partly because manufacturing of thin-film batteries is still in very small quantities, but also because thin-film battery technologies are at a relatively early stage of development.
Some firms have accepted that and gone for very specialized applications where cost isn’t really an issue. Medical implants need small, thin batteries and this is an obvious market for thin-film battery makers to chase after. Other thin-film battery firms are looking at cost reduction strategies at the factory level. For example, Solicore has coatable electrolytes.
Such developments are ongoing and may ultimately enable some thin-film makers to break into the market segments currently controlled by standard lithium-ion batteries. This market is vast, and includes batteries for laptops, cell phones, and other assorted pieces of consumer electronics. And as the technology is introduced into plug-in hybrid and pure electric vehicles, lithium-ion batteries will continue to sell in high volumes.
But thin-film batteries attacking these mainstream markets do not seem likely to emerge any time soon. Thin-film battery manufacturers are not targeting these mainstream applications. Traditional lithium-ion batteries have so many engineering hours behind their development, and are made in such bulk, that a thin-film battery will have a difficult time competing.
Beating standard lithium-ion batteries is not something that thin-film batteries are about right now. This may (or may not) come in time. For now, NanoMarkets believes that the opportunity that thin-film battery makers will be able to tap into, will be the “new smartness.” In the past year, we believe the buzz about smartness has finally begun to turn into action.
The whole of Asia must be considered a major opportunity area for the OLED lighting business. Most of the countries in Asia are experiencing high economic growth and their manufacturing sectors are—generally speaking—moving to increasing levels of technological sophistication, both in terms of the products they supply and the kinds of manufacturing technology they deploy:
The economic trends in Asia imply both expanding markets for OLED lighting in the form of larger middle classes that may be exactly the kind of consumers who buy the products of which the early wave of OLED lighting may consist. All of the fast-growing economies in Asia have enjoyed vibrant construction markets, a very positive sign for the future of OLED lighting. However, in many countries it remains to be seen for how long many of these property booms are sustainable.
Increased sophistication of the semiconductor industry in non-Japan Asia implies that OLED lighting could find a successful manufacturing home in Asia as it begins to reach volume production. China is now focusing on building up its facilities to manufacture much more sophisticated products than in the recent past and other countries—Indonesia and Vietnam—are also anxious to develop new semiconductor industries. Meanwhile, Japan is quietly building a competent and comprehensive OLED lighting industry.
Each country, of course, has its own demographics, its own opportunities and different timeframes for realizing those opportunities, as well as particularities in terms of market needs and the regulations impacting the OLED lighting market. Each country also has a different story with regard to the size and sophistication of its indigenous OLED manufacturing sector and how that sector is likely to evolve going forward.
Japanese consumer response to the arrival of LEDs also seems to have been relatively enthusiastic with one Japanese newspaper article talking about them "selling like hot cakes" and going on to talk about "the new generation of light bulbs . . . quickly empt[ying] store shelves." This openness to new SSL lighting technology would also seem to bode well for OLED lighting as it comes onto the market in Japan.
Japan is usually considered to be a market of early adopters, meaning that consumers in this country tend to adopt and legitimize new technologies before much of the rest of the world does. Most electronics products are released in Japan very early in their market cycle and we expect this factor to apply to OLED lighting. As an example of the kind of pioneering direction that OLED lighting might take in Japan, we cite the activities of Kenwood, the home and automotive electronics company that has demonstrated an ultra-thin stereo speaker that is also an OLED white-light panel.
However, we note that the surge in demand for LED lights in Japan has mostly been in response to deep price cuts and the first wave of OLED lights in Japan are likely to be very expensive items. In addition, the uptake of LED lighting has been specifically for LED bulbs and no equivalent OLED product yet exists. Given this, the parallels between OLED and LED lighting can be stretched too far.
NanoMarkets believes that the power consumption issue driving OLED lighting markets in Japan is of special importance in Japan, which imports more than 80 percent of its energy. We think this will be one of the key "triggers" in the Japanese OLED lighting space, the other one being the enthusiasm with which Japanese consumers adopt new technology, especially electronics technology. Perhaps the most important regulations relating to the products covered in this report are those emanating from the Ministry of Economy, Trade and Industry, which require the ceasing of production and sale of incandescent bulbs by 2012 in Japan.
Many of the major light bulb manufacturing firms (and even a few retailers) in Japan have already abandoned the incandescent bulb and the fact that these organizations have been quite proactive in this space may have helped shaped the enthusiasm for LED lighting in Japan and will also impact the development of OLED lighting in a positive way. LED lighting is also mentioned specifically as an item preferred in government purchases as part of Japanese "green purchasing" regulations and these regulations may well be extended to OLED lighting in time.
The short-term impact on OLED lighting of the recent disasters in Japan does not seem to be all that great; for the most part, firms producing OLED products in Japan have been minimally affected by the earthquake and tsunami. However, we believe that the events of early 2011 will leave a longer-term mark on the OLED lighting industry in Japan and that this mark will largely be positive. One factor will be that the energy efficiency and renewable energy memes are likely to become more diffused in Japanese society as a result of the inevitable anti-nuclear sentiments that are likely to emerge in Japan. In addition, with almost 50,000 buildings destroyed by the tsunami and earthquake there may be a construction boomlet in the country that could result in a need for next-generation lighting systems.
As a nation, Japan has emerged as perhaps the leading center of OLED lighting development and manufacturing in the world, with both giant multinationals and start-ups involved in its efforts. Among the major Japanese firms that are directly involved in the manufacture of OLED lighting are Konica Minolta, Mitsubishi, NEC, Panasonic, Pioneer, Rohm, Showa Denko, Sumitomo and Toppan Printing.
The Chinese market for OLED lighting could not be more different to the Japanese market. The addressable market as measured by the number of homes is huge; there are 385 million households in China. However, despite the surge in standards of living in China in the past ten years, per capita purchasing power in China remains very low; around 18 percent of per capita purchasing power in Japan. This means that as a whole, the Chinese population is not in a position to rush out and buy the latest high-tech lighting innovations, including OLED lighting.
At the present time, OLED lighting markets in China, to the extent that they exist at all, consist of purchases of high-value designer lighting for prestige buildings such as one finds in a few cities—most noticeably Shanghai, and perhaps some purchases by the urban wealthy. And those in the OLED lighting business who want to model their future success on the LED industry in China should note that while the output of the Chinese LED industry at the present time is enormous, a significant proportion of them go into decorative mirrors, jewelry and other such items. This may also represent a potential target market for OLED lighting in China. We note that OLED lighting and mirrors have already been created as prototypes in other parts of the world.
Beijing Visionox appears to be the one prominent Chinese OLED company to be emphasizing OLED lighting products at the present time, although there are perhaps 20 more OLED producers currently active in China. However, NanoMarkets expects to see considerable efforts from the Chinese government to develop high-tech industries in China in the immediate future and this determination may well help grow the domestic OLED industry in China. The need for more domestic technology development to serve Chinese consumers rather than exports is key to the latest—and all-important—Chinese five-year plan.
China does not yet seem to have a fully developed policy for phasing out incandescent lighting, which is perhaps a little surprising. However, there have been major CFL promotional programs initiated in China, beginning in 2007. And the Chinese government has also introduced measures to encourage public institutions to buy efficient lighting. There are also local government incentives being offered to reduce the use of incandescent bulbs.
The evolution of Korean high-technology industries is characterized by (1) a high degree of coordination by the central government at all levels of the supply chain and (2) a desire to leapfrog other nations by opting for the "latest and greatest" technology.
The Korean government has been sponsoring the advancement of SSL since the mid-1990s. Public programs boosting the LED business in Korea include the LED Lighting 15/30 Project, which aims to replace 30 percent of lighting devices in Korea with LED lighting by 2015. NanoMarkets strongly believes that this kind of program will come into existence in Korea to support OLED lighting too. Also, much like Japan, Korea imports more than 80 percent of its energy, so energy efficiency could be an important trigger issue for the development of OLED lighting in this country. We also note that the Korean government is investing 30 billion won (US$26.8 million) in a fourth-generation in-line deposit system manufacturing process for white OLEDs.
The Korean industrial policy has not always been successful. However, in the display space, the two leading Korean display firms have leapt to prominence in a very short space of time. These firms—LG and Samsung—are also already involved in the OLED lighting space. LG's OLED activities were significantly strengthened at the end of 2009, when LG acquired Kodak's OLED business. Recently, Samsung started to develop OLED lighting modules and has already shown prototype panels that it claimed were built on existing PMOLED production lines.
Taiwan is a powerhouse in both the LED and OLED display industry, which sets this country up ultimately to be a force to be reckoned with in the OLED lighting space. By 2012, incandescent bulbs are expected to disappear completely from the shelves of Taiwanese retailers, opening up the way for more solid-state lighting solutions including OLED lighting.
The Taiwanese OLED industry, although very well established, seems to have gotten into the OLED lighting business relatively late. Before 2010 there was very little activity in this space. In the past year to 18 months, however, AU Optronics has gone into this space and there have also been OLED lighting-related announcements from Taiwanese researchers related to improving the CRI for OLED lighting. We believe that Taiwanese OLED display panel makers should not find much difficulty in the transition into OLED lighting because of their wide experience and expertise in OLED technology.
Opportunities for International Business in the OLED Lighting Space
OLED lighting is likely to develop in Asia under the powerful influence of national industrial policies that strongly favor domestic suppliers for domestic markets:
This is especially obvious in the case of China, whose current five-year plan is specifically intended to promote high-tech industries in China, with OLED lighting products almost certainly considered as one of the industries likely to receive support in this way.
In Korea a focus on specifically Korean standards in high-technology industries in the past has tended to make it difficult for foreign suppliers to enter this market. There are no specifically Korean standards for OLED lighting at the present time. However, Korean Standards (KS) have been developed for LEDs and, once again, this may be indicative of the directions that standardization of OLED lighting finally takes. There is a plan to make the Korean KS standard for LEDs part of the IEC process of international standardization for LEDs.
Finally, we note that the luminaire industry in any country is strongly dependent on local tastes and so tends to favor domestic suppliers, or at least suppliers with a domestic presence.
Materials, Equipment and Licensing: More Open Borders
Where such barriers to entry appear to be less important is where materials' licensing arrangements or equipment is involved. Here, the market seems to be much more open and opportunities easier to capitalize on. It is true that some local governments in China have provided support for companies that produce equipment in their localities, but generally speaking, OLED lighting firms buy their equipment from whoever has the best equipment at the best prices:
In recent news a Korean OLED plant that was about to go on stream, has had to delay because of shipping delays by a Japanese equipment company impacted by the consequences earthquake and tsunami in that country.
Universal Display in the U.S. has signed a technology and licensing agreement with Moser Baer for OLED lighting panels. Universal Display will provide Moser Baer with OLED materials and technology assistance. This follows the two companies' joint project to design and build a white OLED lighting manufacturing facility in the U.S. This project was awarded $8.3 million from the U.S. DOE (total cost will be around $20 million)—and the first pilot line is scheduled to be online during 2011.
UDC has been selling its materials to multiple Asian companies in the OLED displays and lighting space. Among the firms to which UDC supplies OLED materials are NEC Lighting, Panasonic, Showa Denko and Sun Fine Chem.
Opportunities for Crossborder Alliances in OLED Lighting
In addition, formal crossborder alliances impacting the OLED lighting space are not uncommon and may become more common in the future. Perhaps the most important one at the present time is the alliance between GE in the U.S. and Konica Minolta in Japan. GE is one of the so-called "big three" lighting companies and is aggressively pursuing R2R OLED lighting manufacture. GE's relationship with Konica Minolta has the goal of bringing OLED lighting products to market.
The power of brands and design: Finally, it is worth noting the power of brands in this space. Some of the most important international consumer electronics brands are moving into the OLED lighting space and this will help them gain market share in the OLED lighting market worldwide. Many of these brands bring with them established marketing channels primarily for consumer electronics products (rather than lighting products).
Yet another direction for international cooperation is in design. While U.S. firms have long made use of European industrial designers, the novelty of OLED lighting may open up new possibilities. Thus, KM has hired Mexican design studio Agent to produce two concept lights.
Taiwan/China: For cultural reasons, if for no other, Taiwanese LED manufacturers have built ties to LED manufacturers in China, where they can capitalize on the low cost of Chinese labor and Chinese government subsidies.
That said, we note that Taiwanese-Chinese collaboration in the advanced lighting space may go beyond simple manufacturing arrangements. For example, Taiwan's ITRI and the Beijing National Electric Light Source Quality Supervision and Inspection Center have signed a mutual agreement for cross testing of LED products. Under the agreement, LED products tested by ITRI can be exported to China. Such arrangements may not survive the current nationalism inherent in Chinese technology policy. There again, if such testing arrangements cut both ways, pragmatism might dictate the survival of such arrangements.
While it was always understood that OPV would be tricky to encapsulate if its flexibility was to be preserved this has proved a high-cost exercise as well.
And functional printing, which was supposed to lead to low-cost electronics and PV of all kinds has proved to be a useful tool, rather than the harbinger of a manufacturing revolution.
Although early proponents of dye-sensitized cells (DSC) dreamed of a future in which DSC would compete primarily on cost, it now seems that this future is unlikely to come about. As far as we can tell, First Solar is today's cost leader in the PV space and the company's CdTe panels also perform better than DSC. Since the end of the silicon shortage, crystalline-silicon PV costs have fallen considerably and may even eventually approach the inorganic thin films in terms of cost.
The market for transparent conductors sold into the photovoltaics (PV) sector for electrodes is currently made up of transparent conducting oxides (TCOs), including indium tin oxide (ITO). PV, however, is the first major high-performance application for transparent conductors to largely shake its dependence on ITO in favor of less-costly TCOs, mainly tin oxide- and zinc oxide-based materials. This places the PV industry in the somewhat comfortable position of having relatively few cost incentives for making changes to the transparent conductors used; the status quo—TCOs—are already cheap.
However, this should not be taken to mean that there is no incentive for PV manufacturers to switch to other transparent conductive materials, or even that there is never a cost incentive to do so. Indeed, while non-ITO TCOs are cheap from a materials point of view, the processes used to form coatings with them are certainly not cheap. Sputtering equipment and other similar vacuum deposition equipment is expensive, and the energy required to achieve the deposition conditions is certainly costly as well.
Thus, the next major shift in transparent conductor usage will be toward materials that can be deposited by cheaper methods—printing and coating, although obviously PV manufacturers will not pay heavy premiums for materials that can be processed in this way.
Opportunities for ITO Firms—Are There Any?
ITO has been displaced by tin oxide and zinc oxide to a large degree in the PV industry, but there are still significant amounts of ITO used. NanoMarkets believes ITO will continue to see a declining penetration over the next eight years. But because the PV sector itself is growing, the revenues that ITO suppliers will derive from the PV sector will continue to grow as will the volumes of the material shipped into the sector.
The reasons for this thinking are: (1) ITO can still claim to offer superior transparency compared to other TCOs, and (2) because of the development of market segments that favor “premium” products. One good example of where ITO is likely to be used is in BIPV glass. BIPV is close to being a luxury product and is one where transparency is important for obvious reasons. In addition, in BIPV glass, the cost is dominated by the glass itself so the cost of ITO is not such a big deal.
NanoMarkets believes that the PV technologies that will use the most ITO will be OPV and DSC. This is despite the wide perception that these technologies will be made or broken primarily by the cost points that they can achieve. In fact, OPV and DSC look less and less like they will be able to offer major cost improvements and their commercial success is now completely dependent on their ability to exploit their unique characteristics—primarily transparency and flexibility. Transparency gives OPV/DSC an opportunity in the BIPV glass space and we have already noted why ITO might claim that market. But we also noted that OPV/DSC no longer has cost as part of its stated unique selling proposition, so at least ITO is not going to be ruled out immediately on cost grounds.
Opportunities for Other TCO Firms in the PV Space
NanoMarkets believes that non-ITO TCO firms catering to the PV sector will see their volume shipments and revenues grow over the next eight years. This is because substitution of ITO with other, less expensive, TCOs remains—and it will continue to throughout the forecast period—a major trend for transparent conductors in the PV industry.
And while other transparent conductors—printable ones, conductive polymers and nanomaterials—will make some inroads into the PV market, the extent of their penetrations will not be enough to significantly concern the TCO industry. The market share that is captured by these printable materials will remain quite small throughout the period considered in this report. This is especially the case for the largest volume PV technologies in the thin-film PV space: CdTe and TF-Si. The volumes they achieve will be significant for the firms involved, but not as significant for the TCO firms from which they capture share.
Non-ITO TCO firms have the opportunity to increase volumes by supplying the growing PV technologies that already use them—CdTe, thin-film silicon, and CIGS. But they also have the opportunity to gain new footholds with two PV technologies that currently use only ITO: namely OPV and DSC. Not all OPV and DSC applications are as well insulated from PV cost as BIPV is; in fact, many will remain very sensitive to cost. TCO suppliers can gain volumes and make money by helping OPV and DSC move away from ITO in these applications as part of their cost reduction efforts.
Opportunities for Nanomaterials and Conductive Polymer Firms in the PV Space
Nanosilver-based transparent conductive films are on the verge of an opportunity not seen in the history of the transparent conductor industry: the ability to produce films that are both more transparent and more conductive than ITO, in commercial quantities and at lower cost. The importance of this development in the long run cannot be overestimated; it will eventually have major implications for all of the industries that use transparent conductors.
Carbon nanotube-based transparent conductors appear to be approaching a similar game-changing opportunity in the long run. Although the carbon nanotube itself is quite new and still not yet fully understood, it seems likely that these carbon nanotube-based materials will produce commercial-volume films exceeding ITO’s performance just a couple of years after the nanosilver ones do.
In the short run, adoption of such new technologies will almost certainly be rather slow and deliberate. In the PV industry, the differences in deposition processes between these nanomaterial-based materials and the standard TCOs are substantial, and somewhat risky considering the low cost of the non-ITO TCOs they would displace. NanoMarkets sees an opportunity for these materials to capture a two-percent share of the transparent conductor market in PV by 2014. And because the cost of these films is mainly in the value of the materials rather than the cost of depositing them—as is the case for TCOs—that two percent share will produce 10 percent of the transparent conductor revenues in the industry.
Conductive polymer firms also have opportunities for growth in the PV market, even though their low cost means that the revenue-generating potential is relatively small. The best opportunities are in OPV and DSC, in part because OPV already widely uses the same conductive polymers as hole injection layers/planarization layers between the active material and an ITO electrode. But both OPV and DSC will also benefit from these conductive polymers because both flexibility and cost are critical to many of the applications in which they are to be used, more so than PV performance. As OPV shifts away from ITO and the need for HILs shrinks, the new electrode application of these materials can help to fill in the gap and even grow volumes and revenues beyond what was generated by the HILs.
How New Developments in the Transparent Conductor Space will Create Opportunities for PV Panel Makers
Among PV panel makers, the development of the transparent conductor industry will produce opportunities to reduce costs and improve performance. The most immediate opportunity for PV panel makers is for thin-film silicon, OPV, and DSC manufacturers, the ones that still use ITO mainly because of its legacy. These firms have the opportunity to reduce costs by switching from ITO to one of the lower-cost TCO— tin oxide or zinc oxide. Doing so could save over 75 percent of the materials cost of the ITO, an amount that fluctuates with the price of indium and ITO.
A major approaching opportunity for PV firms is to use printing or coating to deposit the transparent conductors instead of sputtering or other vacuum deposition techniques. The advantage of doing so is not in the savings on materials cost—when the alternative is a low-cost TCO like zinc oxide or tin oxide—but in reducing the cost of applying the materials. This opportunity covers three classes of transparent conductors: conductive polymers, nanosilver-based films, and carbon nanotube films. There have also been attempts to print both ITO and other TCOs, but the commercial impact of such work seems to be negligible.
Conductive polymers: PV manufacturers have the opportunity to use conductive polymers in this regard, offering the greatest potential savings among the transparent conductive options. Manufacturers that take advantage of this route will maintain materials costs similar to those of the inexpensive TCOs, but will take full benefit from the lower cost of printing versus vacuum deposition. But this opportunity is mainly one for devices that do not require high performance, yet do require high flexibility and low cost. The conductive polymers are not very conductive or transparent in comparison to the other options, and devices using them would trade a performance hit for the lower cost and greater flexibility.
OPV is an especially good fit for using conductive polymers as electrodes because it already uses the same materials as HILs. In an overly simplistic approximation, using conductive polymers as electrodes would involve little more than leaving off the ITO layer.
Nanomaterials: The opportunities for PV manufacturers to use nanosilver- and carbon nanotube-based materials to print electrodes are geared more toward high-end flexible applications. These materials are the ones with the potential to exceed the transparency and conductivity performance of ITO and other TCOs. If they are able to achieve this higher performance, then there will be no performance hit for using them. And while these materials are not yet commercialized in any sense that is useful to determine initial pricing, NanoMarkets expects their materials costs to be higher than those of ITO, but for the low deposition cost to approximately make up for it.
Hence, the total cost of using nanosilver- and nanocarbon-based materials is likely to be greater than that of using tin oxide or zinc oxide. But this is still a major opportunity because it can enable high flexibility in products that rely on both flexibility and performance. This opportunity is closer—beginning in 2012 or 2013—for nanosilver films than it is for carbon nanotube films, which will begin to be used in significant volumes a year or two afterwards
NanoMarkets believes that the market for smart windows will grow substantially over the next eight years, becoming a billion-dollar market by 2015 and then more than doubling by 2018. There are several driving factors for this growth, which are discussed in the main body of this report and outlined here:
Added value: The smart window product types we discuss in this report add significant value to conventional windows in certain important market niches. Yet, the overall size of the worldwide flat glass market—some six billion square meters today,—is sufficient that even niches of well below 1 percent of the market can generate substantial sums of money from high-value smart windows.
Developing electrochromic coatings that are less costly and that provide a broader dimmable range. The limited dimmable range of some electrochromic and similar technologies limits their usefulness, and increasing that range would drive faster adoption—and increased sales of the materials that allow it. Electrochromic windows are also the most costly of the smart windows and lowering the cost of the coatings will also boost growth rates.
Opportunities for Architectural Windows Firms
The earliest opportunity for glass suppliers is for electrochromic glass, which is already established in self-dimming automotive mirrors. The automotive market can be expected to begin using electrochromic glass in other places—like side windows and sunroofs—before too long. Glass firms that have forged the right relationships with auto manufacturers will be the first to benefit.
ITO and Costs: The Real Story
Despite the end of the silicon shortage and the economic problems that beset much of the developed world, and the construction industry in particular, the prospects for thin-film photovoltaics (TFPV) still look quite good. The thin-film silicon sector is recovering from a bad couple of years as it has both adapted to the end of the silicon shortage and weeded out non-productive suppliers. First Solar, which dominates the CdTe sector, seems to have survived the downturn quite nicely. And the CIGS sector, while it has yet to keep its promise of high-efficiency with all the advantages of conventional solar panels, at least is still keeping that promise alive. In addition, while the end of the silicon shortage may have got rid of one of the main reasons why TFPV experienced a boom in the first place, the fact that TFPV can offer flexible PV products for building-integrated PV (BIPV) applications is a new reason why TFPV might be chosen over conventional PV.
Often described as a class of “miracle” advanced materials that will transform electronics and photovoltaics, the actual record of conductive polymers has been decidedly mixed. For example, the expectations for polymer-based photovoltaics, or conductive polymers as a transparent conductive coating, have never been met. And in the one area where organic electronics has taken off commercially—OLEDs—it is organic small molecule materials that have been widely used, not polymers. To the extent that conductive polymers have been used in commercial applications, they have tended to be low-value applications; notably anti-statics.
This underachievement of conductive polymers has not been widely recognized, especially by trade, business and popular science publications which go on reporting on these materials as if they were highly successful in the marketplace, or at least soon will be. As we have noted, however, this does not seem to be the case. But this is not to say that conductive polymers do not have a commercial future. This future, NanoMarkets believes, will depend on the clear identification of specific high-value applications where the use of conductive polymers makes sense because of their unique properties; that is, all the advantages of plastics with conductivity too. It also depends on the resolution of a handful of important technical problems that continue to beset the conductive polymer business.
In view of all this, NanoMarkets believes that there is a need for a careful and realistic assessment of the market potential for conductive polymers going forward and this is the main reason why we are publishing this report. “Realistic” in this sense means not only taking into consideration the relatively low level of success that conductive polymers have had to date in the electronics world, but also (in a more optimistic vein) what improvements can be expected in conductive polymers of the future and where they may shine in the future.
The Future of Conductive Polymers: Room for Improvement
NanoMarkets believes that a number of technical developments are taking place that will improve the performance of conductive polymers and will—as a result—expand the markets available to conductive polymers over the next five-to-eight years. The most dramatic of these developments relates to nanostructuring conducting polymers in order to provide the advantages associated with higher surface area and better dispersability.
But there are also plenty of other opportunities for making the value propositions of conductive polymers in the electronics industry more viable; ones that don’t stretch all the way to using nanotechnology. Many of these revolve around the materials themselves or manufacturing processes. For example, in many cases industry is looking for more consistent materials and improved (which means lower cost) synthesis techniques. Improved materials synthesis might, for example, come from reducing the number of steps in the synthesis process; a relatively small step, but one that needs careful consideration.
Other improvements to look for are improved solubility of polymer materials. Many doped polymer materials are salt-like, which diminishes their solubility in organic solvents and hence their processability. The current solution to this issue—the addition of solubilizing substituents—only tends to complicate the synthesis process, thereby adding to the problem mentioned above. So other directions would be a welcome new direction for conductive polymers. In addition, greater solubility opens up the way for the use of solution processing; one way to reduce manufacturing costs.
Yet another issue surrounding conductive polymers at the present time is their relative instability under normal atmospheric conditions, which implies the need for better conductive polymers or better encapsulation, or both.
NanoMarkets believes that all of the above areas could represent significant opportunities for specialty chemical firms and even start-ups looking to expand their presence in organic electronics. By coming up with improvements of the kind profiled above, these firms could also considerably expand the addressable markets for polymer electronics, which now represents a relatively marginal activity, dominated by low-volume or low-value products.
NanoMarkets has been tracking the photovoltaics industry and believes it is at a crossroads. A combination of factors now threaten to send the PV industry, kicking and screaming, back to the days when it catered to no more than a niche market. At the same time, PV technology is maturing and there is a growing realization that standard PV panels are becoming commoditized.
The combination of commoditized products and shrinking traditional products is not an attractive environment for solar panel manufacturers to make money and perhaps by now some of the old timers in the PV industry are chalking up the current situation as just another disappointment in an industry that has seen lots of disappointments since the 1970s. However, NanoMarkets believes that PV may not only be "saved" by building-integrated PV (BIPV) but may actually flourish. What BIPV does is to bring an entirely new value proposition to the PV market both in terms of cost and in terms of aesthetics. And a result, BIPV promises the PV industry an opportunity to create new higher value products, exactly what an industry with a commoditizing product set required. The purpose of this report is to explain how the BIPV business case can best be made and the purpose of this Chapter is to set out the basic "facts of the case" and to sketch how this report is designed and what its key objectives are.
Trouble in PV Paradise
After several years of impressive growth, NanoMarkets sees the solar panel market as entering a new phase of its market evolution; a phase where it will face three extraordinary challenges. The once almost-certain subsidies that were the primary cause of solar's growth in the recent past are in danger of disappearing and the "environmentally conscious" consumer market segment which has always proved a mainstay of the PV industry is, we believe about to contract. At the same time, one PV panel is becoming much like another:
- On the policy front, it is by no means certain that governments will or can keep up the subsidies that supported the photovoltaics boom of a few years back. While PV subsidies would have seemed a "sure thing" in most major markets four years ago, they can no longer be counted on going forward. The need for governments in the developed world to cut back on expenditures over the next few years is hardly in need of explanation these days and energy subsidies are certainly not going to be exempt from such cuts. And as we have seen from Spain, and to a lesser extent Japan, when subsidies go, the PV market has serious problems.
- In fact, the current economic problems that the developed world is only slowly escaping is something of a "double whammy" for the PV industry. Not only are the (apparently) essential subsidies challenged, so is the size of one of PV's key markets; the "environmentally conscious" building owner. From its inception the PV industry could count on a segment of the population to buy into PV, without much regard for actual returns on investment, because it was the "right thing to do" or because consumers wanted to be seen as doing "the right thing." NanoMarkets now expects the "environmentally conscious" market segment to shrink because in difficult economic circumstances, we see many consumers who might otherwise have been motivated primarily by environmental concerns becoming much more concerned with return on investment (ROI) issues.
- This shrinkage of a traditional market for PV will only reinforce the growing importance of ROI in the solar panel industry, because to grow significantly beyond where it is now, the solar panel market will need to convince a less environmentally focused group of consumers that shifting to PV makes sense; economic sense that is. But unfortunately, solar panel makers have relatively little control over most of the financial factors that make up the ROI equation. Indeed, the primary way that panel makers can influence this equation is through price. This, of course, is a polite way of saying that the solar panel market is becoming commoditized.
NanoMarkets/Smart Grid Analysis’ latest research suggests that a sweet spot for the emerging microgrid market is to be found in the institutional/campus market segment. According to our analysis, no other segment comes close in terms of market size; institutional/campus grids will already generate over $400 million in revenue in 2011. This segment will also grow faster than any other segments, except the specialized military market and the niche-like “off-grid” market. By the time 2017 rolls around, we expect the worldwide market for institutional/campus microgrids to have reached well over $1.0 billion.
Our analysis suggests that there are a number of reasons why institutional/campus grids are likely to take off in the near future. On the demand side, we believe that the capabilities of microgrids are strongly aligned with the current market needs of the campus user community. On the supply side, a slew of new technologies are bringing down the cost of sophisticated microgrids, making them available to smaller schools and industrial campuses which could not have seriously considered such a high-level of energy management until now.
Familiarity and Ideology Breeds Microgrids
One reason for being bullish about campus microgrids is that the educational community is where one is most likely to find energy management administrations that are highly enthusiastic about energy efficiency and the use of renewable energy for its own sake. That is, in addition, to all the purely economic arguments for putting an independent microgrid in place in their campus, they place a very high premium on clean and efficient energy, per se. In addition, many of these educational institutions contain medical or other emergency facilities that are completely dependent on electricity to perform their functions; the high power quality guaranteed by microgrids would seem to help considerably in this regard.
What also helps in selling these the campus market on the microgrid concept is that they may already familiar with it to some extent; directly or through their peers. In many other segments of the microgrid market the whole notion of an independent grid is a novel one and it will take some time for the user community to adjust to the idea. But in the institutional and campus grid segment, there are already independent distribution grids in place. To cite a few U.S. examples: Iowa State (34 MW); University of Texas-Austin (85 MW); University of Alaska Fairbanks (22 MW); Yale (22 MW); SUNY Stony Brook (45 MW); and Wellesley College (7 MW). All this may suggest that campus management is at least a little way up the learning curve that it will be necessary before they make substantial investments in microgrids,
It is important, however, to recognize that the grids mentioned above, do not quite qualify as true microgrids. More specifically, they do not include storage for load shifting or automated sensors for internal control and microgrid automated power shedding. What they do include is combined heat and power (CHP) generation, which in turn offers increased efficiency and results in a microgrid configuration that is already economically competitive with grid power.
In fact, we see the CHP factor as another plus for sales of microgrids into the campus sector. In theory, CHP could be part of any microgrid project, but we believe that CHP is particularly easy to efficiently implement in a geographically compact group of users, such as an educational, industrial or office campus. Also, many advanced new hospitals are already using CHP and thermal storage, and have UPS requirements, so the transition to a microgrid strategy for these facilities again represents an incremental change and not a paradigm shift in their design.
All these factors combine to help create a business case for microgrids in campus environments that could not be easily made in other segments of the market. What is more, the addressable market is huge consisting as it does of the many thousands of campuses around the world where administrations are concerned about energy efficiency and where perhaps these administrations are keen on deploying solar panels as part of their generation mix.
Reaching the Smaller Campus With Microgrids
As things stand, many of these thousands of campuses – even where the management has been aware of the benefits that microgrid can bring – have seen the cost of these grids as prohibitive. However, we believe this will begin to change. Specifically, NanoMarkets believes that the addressable market for campus grids is being expanded by a slew of technology advances that are bringing down the cost of energy storage, frequency regulation and grid management more generally. While, as we noted previously, the independent grids that are currently run by campuses are not really fully qualified microgrids, the latest developments in power electronics, sensors and software will bring true microgrid capabilities to smaller campuses for the first time, in much the same way that developments in optoelectronics gave birth to small scale optical networking.
The situation is, in fact, very reminiscent of what happened in telecommunications where small schools, suddenly found themselves graduating to their own fiber optic networks that would have been beyond their budgets and ability to manage a year or two previously. In the microgrid business, we expect to see something similar occur and we think that firms that are in the microgrid space should be encouraged by this historical parallel.
As a result of all this, we expect the addressable market for microgrids to expand to smaller environments such as emergency service facilities or smaller hospitals; facilities rated in the 500 kW–4,000 kW range. Such smaller grids will be true microgrids in nature with CHP as the primary generating resource, thermal storage for heating and cooling needs, electrical storage to provide enhanced power quality and reliability, multiple levels of power quality to provide ultra-high quality to key assets with lower levels of quality to non-essential loads and pervasive sensors to enable load shedding of non-essential resources.
NanoMarkets sees the growth in these smaller grids as being especially strong after 2015, which will give enough time for the newer grid technologies to “kick in” and provide lower prices for microgrid components such as control software, plug-and-play peer-to-peer microgrid networks, electrical storage and thermal storage. Meanwhile, we expect to the microgrid business for large educational campuses continue to expand, both with upgrades of existing grids and with entirely new and fully qualified microgrids.
The information for this report was drawn from NanoMarkets’ report, Microgrid Markets and Opportunities. Please click the link for additional details about the report.
The high cost of silver has become increasingly painful to users in the electronics industry over the past year. Silver has always been an expensive metal, but such users have often been persuaded not to use silver alternatives (such as copper, carbon or aluminum) by the fact that silver is the world’s most conductive material.
This physical fact won’t change, but as the price of silver rises, the incentive for users to move to non-silver products can only increase. In fact, at the present time, some of the worst nightmares for silver ink manufacturers and their customers are coming true, with silver prices increasing 50 percent in 2010 alone. At the time of writing, silver is nearing $30 per ounce and the upward price trend seems all but certain to continue. Such silver prices, combined with the high cost-consciousness of the device manufacturers that use silver inks and pastes, mean that silver ink and paste suppliers are being squeezed tightly in their margins. The prospects of inflation consequent to government monetary policies in major nations throughout the world can only make prospects for the future worse.
Nonetheless, having studied the market for silver inks and pastes for five years now, NanoMarkets believes that any substitution away from silver inks and pastes will occur at the margin; there will be no wholesale abandonment of such inks and pastes. Silver is entrenched in the conductive printing market simply because it is, without any reasonable dissension, the best material for the job. In most cases, users of silver inks and pastes can’t do much more than reduce waste and shop around for the lowest-cost suppliers that fill their needs.
But that doesn’t mean that makers of other conductive inks won’t keep offering substitutes for silver. Copper, carbon, and aluminum will continue to vie for portions of the printed conductor market, with renewed vigor in some cases, as they seek to offer less-costly alternatives to ever-more-expensive silver. And in some cases they will succeed in penetrating further into these markets, although typically as a complement to silver rather than as a complete replacement. Combination inks—combining silver and carbon or silver and copper, for instance—can offer modest savings when the highest level of performance isn’t critical. Such combination materials have been around for many years.
Nanosilver: The Answer to High Silver Prices? Or Still an Academic Effort?
One highly-publicized—and highly researched—approach to “using less” silver has been to use nanosilver-based inks and pastes in place of the conventional “micro” silver that makes up the vast majority of the market.
The thinking here, of course, is that nanoparticles of silver contain less “inactive” silver in the center of the particles, and hence equivalent conductivity can be achieved with much less material. But while the science supports this approach to some extent, nanosilver has still not taken off as many have hoped it would.
We note, in particular, that the markets that the manufacturers of nanosilver inks and pastes promised to penetrate a few years ago are still using little nanosilver; or none at all. Part of the problem seems to be that the savings from using less silver are largely—sometimes completely—eaten up by the higher cost of the nanosilver itself, let alone the changes in design and equipment that are needed to use it. And after a while, nanosilver ink makers can only begin to lose credibility, if they haven’t already done so.
But like the producers of silver substitutes, nanosilver ink developers and suppliers are also emboldened by the rising cost of silver. With (proportionately) smaller quantities of silver being used in nanosilver preparations, the rising price of silver has a much smaller impact on the cost of nanosilver inks and pastes than it does on conventional silver paste. This enhances nanosilver inks’ value position as a conventional silver replacement; in some sense it narrows the gap between nanosilver and conventional silver inks and pastes. And to some extent the old arguments for nanosilver still remain intact; these include that nanosilver makes sense where screen printing is unsuitable and/or where inkjet provides significant benefits.
So which will it be? Can nanosilver ink costs come down enough that conventional silver paste users will consider it a reasonable alternative to thick-film? Or will the economic uncertainty and risk aversion that typify the current age cause device manufacturers to settle in with the conventional silver materials they are already comfortable with, leaving nanosilver largely as a research material with some industrial niches? This report examines these questions, but part of the answer appears apparent in the growing interest in nanosilver-based inks in the important transparent conductor market, poised to become a major niche for nanosilver inks, although admittedly of a rather different kind and from different suppliers than were prominent a few years back.
Four Reasons for Skepticism about the Prospects for OLED Lighting
With new companies entering the OLED lighting business seemingly every month, it is increasingly vital to go beyond the hype and identify why the world really needs OLED lighting and how the manufacturing and marketing of OLED lighting can generate new business revenues. Certainly even a casual look at the OLED lighting space so far suggests that there are at least four reasons to be skeptical about OLED lighting’s prospects:
· This field seems to have taken off when a number of firms quit the active matrix (AM) OLED space and went looking for a new OLED related business. In a sense, this may have been a vote of confidence in OLED lighting (why chase after a market you don’t believe in?), but it is hardly a proof of its commercial viability.
· While OLEDs undoubtedly provide all the advantages usually associated with solid-state lighting (SSL), they will have to compete in the solid-state lighting market with inorganic LEDs (ILEDs), a significantly more mature technology. And what OLEDs supposedly have to bring to market that ILEDs cannot offer are unproven; features such as flexibility and the ability to be manufactured using R2R processes.
· OLED lighting products available to date – and there is a growing number of them -- fall into the category of “designer lighting.” The fact that there are such products at all is certainly a reason to think well of the future of OLED lighting, but most forecasts of OLED lighting (including ours) presume a significant penetration of the general lighting market, which designer lighting of the kind in which OLED lights are now incarnated could never achieve. While OLED lighting manufacturers seem to believe that OLED lighting will in some sense become fairly close economic substitutes for incandescent bulbs and florescent tubes – products that are currently sold at throwaway prices – it is far from clear how the lighting manufacturers get from here to there, as it were.
· The bold predictions that are made for OLED lighting are mostly predicated on the view that there will be a rapid phasing out of incandescent bulbs in most of the developed world and that fluorescent lights will not be able to easily fill the gap that is left. This is implicitly a judgment about both the capabilities of fluorescent lights and of the effect and persistence of regulation related to phasing out inefficient lighting sources. But how far can this judgment really be justified?
In its report on carbon inks, pastes and coatings, NanoMarkets has identified a new breed of applications in the energy sector where conventional carbon inks and pastes have an important role to play and where substantial revenue opportunities will be available over the next five to eight years. Carbon materials suppliers who can sell a “green tech” marketing story will be able to distinguish themselves in the marketplace with products which are, by all appearances, not garden variety carbon pastes.
Despite the end of the silicon shortage and the economic problems that beset much of the developed world, and the construction industry in particular, the prospects for thin-film photovoltaics (TFPV) still look quite good. The thin-film silicon sector is recovering from a bad couple of years as it has both adapted to the end of the silicon shortage and weeded out non-productive suppliers. First Solar, which dominates the CdTe sector, seems to have survived the downturn quite nicely. And the CIGS sector, while it has yet to keep its promise of high-efficiency with all the advantages of conventional solar panels, at least is still keeping that promise alive. In addition, while the end of the silicon shortage may have got rid of one of the main reasons why TFPV experienced a boom in the first place, the fact that TFPV can offer flexible PV products for building-integrated PV (BIPV) applications is a new reason why TFPV might be chosen over conventional PV.
Thin-Film Silicon: Beyond Amorphous Silicon?
During the silicon shortage polysilicon spot prices went from around 60$/kg to a high of 450$/kg in mid-2008 and have fallen to around 70$/kg today. This spike in price provided the opportunity for improved a-Si modules to be introduced to the market and the opportunity for CdTe to get a foothold in the market place. But at current prices for polysilicon, the future of thin-film silicon has been effectively decoupled from events in the silicon markets and refocused on how well thin-film silicon can compete on price and performance for market share both with crystalline silicon PV and its cousins in the TFPV family.
At heart these are very much materials issues. Thin-film silicon material has an inherent weight and flexibility advantage over conventional silicon because of the materials that it uses. This is, obviously, very well understood by materials suppliers, but we note that the rise of thin-film BIPV, which may put flexibility at a premium, is very good news for materials firms selling into this space in that it means greater volumes of thin-film products sold.
But where we see a genuine value-added opportunity for materials suppliers in the thin-film silicon space is through the supply of new kinds of silicon. Traditional single and dual-junction amorphous silicon cells have reached maturity and are at the point of incremental cost cutting. Current cells remain attractive for applications which require low cost and do not require high conversion efficiencies (8-10 percent). But suppliers of a-Si panels are looking at ways that they can get a little closer to competing with c-Si panels at the margins and in certain applications.
From a materials perspective, the excitement here is in the area of microcrystalline, nanocrystalline and advanced heterostructures (nanorods, etc.) which may give a path to 12-18 percent efficiency while reusing much of the same knowledge base and manufacturing infrastructure, thus providing a potential path to greater efficiency with little increased cost. The new structures based on microcrystalline or nanocrystalline silicon also are much less susceptible or immune to the loss of efficiency from the Staebler-Wronski effect that plagues true amorphous cells.
While the advantages of these new materials has been long understood, there are now strong signs that these advanced materials could fundamentally change the game plan in the thin-film silicon space by opening up new markets for thin-film silicon PV and perhaps enabling new materials firms to enter this space with strong and protectable IP positions. We note that combinations of thin-film silicon and c-Si are already common in the form of Sanyo's Heterojunction with Intrinsic Thin Layer (HIT) cell and a first step towards using nanosilicon may be a hybrid approach of this kind. Thus, Innovalight's printed nanocrystalline silicon PV material will wisely first be used commercially in this way on top of a c-Si wafer, in order to debut with a premium product instead of a low-performance pure nanocrystalline silicon-only cell that is unlikely to be favorably received in the marketplace.
Not all of the opportunities in the thin-film materials space are quite as "high tech" as the ones discussed in the previous paragraph. Lowering overall cost is an area that materials vendors can exploit to increase their market share. The best example we have seen of this to date is in the area of silane quality for amorphous silicon sells. The vast majority of silane sold for solar applications is of semiconductor quality. But at least one vendor now sells a "solar quality" silane which does not degrade cell efficiency but does lower silane costs compared to semiconductor grade silane. This kind of thinking will have to be applied over the entire materials value chain for each of the TFPV technologies to achieve full competitive advantage in the marketplace.
While not exactly a materials opportunity, it is also worth noting that turnkey a-Si equipment manufacturers and their customers were forced from the market as a result of the downturn, their misfortune has created a glut of slightly used or even unused a-Si equipment that can be either used for a-Si deposition or modified to accommodate micro or nanocrystalline deposition techniques as demand rebounds. The purchase of used equipment at 10-20 cents on the dollar could make business plans for novel thin-film silicon solutions more attractive than outfitting equivalent CdTe or CIGS factories with new equipment.
CdTe: Is There Life Beyond First Solar and What Does It Mean for Materials Suppliers?
While our focus in this report is on materials suppliers, not panel makers, it is impossible not to mention First Solar in any kind of discussion about CdTe. First Solar dominates the CdTe space and seems to be very good at what it does; the low cost structure of First Solar's manufacturing is well known. The dominance of First Solar has important consequences for the materials space, however. Because of this dominance, the CdTe space has brought about standardization of the materials used for CdTe PV in a manner not seen in the other materials-defined sectors of the PV industry.
Of course, First Solar's market share is simply today's reality and there is no law that says that other CdTe panel firms cannot be formed successfully although perhaps First Solar has set the bar quite high. One of the reasons that First Solar is so strong in this space is that other CdTe suppliers of the past have had management problems and have had problems that are not any indication on how things will pan out in the future. We note there are now several firms active in the CdTe space that deserve to be taken seriously. Several possible competitors for First Solar on the horizon are Prime Star Solar (backed by GE), Abound Solar (formerly AVA), Q-cells/Calyxo-USA.
The success of any one of these firms could have a fairly profound impact on the supply of materials for the CdTe space. Some of the smaller CdTe PV companies developing alternative manufacturing processes hope to compete with First Solar's offerings. While First Solar relies on vapor transport deposition which is around 70 percent efficient with respect to metals, others are developing electrodeposition techniques which are up to 99 percent efficient in their use of Cd and Te, which may provide these competitors a path in the long term to achieve a lower overall cost structure than First Solar's vapor transport process. This is especially true if demand is brisk and the cost of Te goes up.
But since the newer companies are using different deposition techniques to First Solar, their materials requirements are likely to be somewhat different from those of First Solar, allowing the entry of newer suppliers, perhaps.
Definitions and Categorizations of Smart Coatings
A smart coating is defined as any coating that changes material properties in response to an environmental stimulus. Coatings have been engineered that link changes in light, temperature, humidity, pressure, electrical current, and many other inputs to a variety of outputs. One can imagine innumerable stimulus/response pairs, each with its own potential application and development challenges.
Obviously, the definitions provided above are broad enough to cover a very wide range of coatings. However, in terms of smart coatings that are likely to generate significant revenues within the eight-year time frame of this report, the kinds of coatings that are worth considering constitute a fairly short list. This list will include coatings with the following types of functionality: anti-corrosive, self-healing, adaptive camouflage, antimicrobial coatings, drug delivery, smart optical capability, and enhanced protection for consumer electronics. But this is not an exhaustive list. In terms of end users, the sectors where we expect to see the most demand for smart coatings are the military, energy, medical, transportation, and consumer applications. However, it is important for the reader to understand that in all of these applications and sectors, smart coatings are more expensive than traditional coatings. NanoMarkets believes this will continue to be true for the foreseeable future.
Therefore, when discussing smart coatings, it is important to consider how smart coatings justify this higher cost; that is, how business cases can be built to support their use. Some of these business cases will be based on the fact that a smart coating can fill an unmet need in a market place that is relatively price insensitive such as military and medical applications. Other smart coatings attempt to lower the overall cost of ownership of the item being coated. This can be done by extending lifetime, increasing functionality, or reducing installation costs, for example. A newly developed smart coating that does not fit one of these two business plans, is unlikely to represent a commercially viable opportunity.
Smart coatings and smart surfaces: We note that the term “smart coating” has a meaning that is close to that of “smart surfaces.” These are not precise technical terms, but for the purposes of this report, we take smart surfaces to be a somewhat broader term and one that includes materials that are not coatings but rather materials whose surface has been engineered (perhaps nanoengineered) to provide functionality that is very similar to the smart coatings reviewed here.
Military Applications: Early Revenues for Smart Coatings
The military—especially the U.S. military—has traditionally been a large and early market for emerging technologies and advanced materials, and smart coatings are no different. Two areas within the military sphere that we believe are important early markets for smart coatings are anti-corrosive coatings and adaptive camouflage.
Anti-corrosive coatings: By its own estimates, corrosion costs the U.S. Department of Defense (DOD) $20 billion per year. Of that, $4 billion is related to painting and re-painting of equipment and structures. To help lower those costs, the Army is working with various companies to develop smart coatings that can reduce the corrosion problem, or at least serve as an early warning system.
With regard to the latter, coatings that send a signal to maintenance crews when the underlying metal is corroding are being developed. This signal may be a simple color change, or it may glow under a fluorescent light. More technologically advanced—and therefore likely to emerge somewhat later in our forecast period—are self-healing coatings that can actually resist corrosion. The U.S. Army is working on such coatings with (for example) Autonomic Materials.
The value proposition of both types of smart coating is compelling and multifaceted: fewer man hours spent on maintenance, greater equipment longevity and uptime in harsh environments, and a reduced cost of ownership. Ultimately, NanoMarkets expects to see the two strategies implemented side-by-side. The self-healing coatings will be able to extend the mean time between failures of the substrate, but they will not be able to self-heal indefinitely. Because of the longer time between failures, it will become more important to employ corrosion sensing coatings. Such coatings will draw attention to the problem areas during the infrequent times when maintenance is required.
Adaptive camouflage: The military is also working with industrial partners on developing adaptive camouflage. Most camouflage currently employed by the military is passive. Think here of the iconic green and brown fatigues designed to look like wooded terrain. As sensing devices get more sophisticated, so too must the camouflage designed to help soldiers evade detection.
With this in mind, thermochromic (changes color in response to heat) or photochromic (changes color in response to light) coatings can help to mask the infra-red signature of a tank. However, actual implementation of such materials has proved tricky. Significant technical challenges must be overcome, such as slow response time and poor infrared matching to the environment. However, in life-or-death applications such as military camouflage even small improvements in performance are better than nothing. Expect to see such coatings increasing in use, concomitant with technical advances.
The fact that the two substrate layers in the pseudo capacitor are so close together means that a lot of supercapacitor material can be packed into a small space, which results in very high capacitances and energy densities. Capacities of supercapacitor systems can now reach 5,000 farads with energy densities rated up to 30 Wh/kg, according to one source. This high performance characteristic of superconductors has also led to some other names being given to supercapacitors. These names tend to imply superlative performance and include “supercondensor,” and "ultracapacitor." In this report, we will use the term “supercapacitor” throughout. NanoMarkets believes that this high level of performance, coupled with the many applications in which supercapacitors can be applied and the opportunity for product improvement, is a major opportunity for revenue generation over the next decade.
Like many “new” technologies, the supercapacitor actually has a long history that goes back decades. One source traces the concept back to work done by GE as early as the late 1950s. However, the first commercial supercapacitors seem to have emerged five years or so ago and now get considerable attention for applications ranging from “Smart Grids” to transportation to renewable energy systems to consumer electronics and power tools. Our own analysis suggests that the market for supercapacitors in the Smart Grid market alone will reach $3.8 billion in 2015.
In addition to their energy density, supercapacitors can offer other advantages over other forms of energy storage. These include low maintenance costs and reliability. When supercapacitors are coupled with batteries, they can reduce the peak power requirement, prolong the battery lifetime and reduce the energy requirement (or the size) of the battery required. The batteries provide the energy, and the supercapacitors provide the instantaneous power needed. Therefore, although batteries and supercapacitors are different ways to store energy, they are not necessarily competitive; they can work together in some applications. Batteries typically have much higher energy densities than supercapacitors, while supercapacitors have the ability to store large amounts of energy and then release the energy in large bursts. So they provide a different kind of functionality.
Supercapacitors, the Smart Grid and the “Green” Power Industry
One of the main reasons that supercapacitors are attracting attention is that they fit well with the current enthusiasm for green technologies. In some applications—for example in “green” building they are seen as greener replacements for chemical batteries that might be used for backups in (say) solar buildings. In addition, our understanding is the supercapacitors have been used in wind turbine blade pitch systems.
And moving out from end user/generation systems, supercapacitors may have a role in the future Smart Grid applications, especially in the area of frequency regulation, a topic of immense importance in a grid that will increasingly be made up of multiple quasi-independent segments. The reason why superconductors are so suitable for frequency regulation is because of their fast discharge of power and frequency regulation will be vital in those areas of the world where “super grids” are being constructed to promote energy trading and increase grid reliability. Frequency regulation is also important for effective connectivity between main grids and microgrids of which there are a growing number at the present time.
Frequency regulation is required not just in these novel applications within the grid, but also in all circumstances where there voltage sags. What also makes supercapacitors highly suitable for grid applications is their long lifetimes and near zero maintenance requirements.
No longer is PV installation a simple matter of the cost of the panels versus the value of the electricity generated. Building Integrated PV (BIPV) it is an integral part of building design and style. Arguably, Japan has been the country that initiated the BIPV market, with its early use of a form of BIPV technology; small solar “tiles” integrated into rooftops. However, as NanoMarkets discusses in its recent study of BIPV markets in general, BIPV technology has progressed significantly since then and now consists of well-differentiated rigid, flexible and transparent building products.
How well such products are likely these products are – or will be – accepted in Asia depends on four different factors. The first is essentially cultural; that is the level to which the environmental “meme” has dug into national culture. There is seldom a direct correlation between BIPV adoption and some specific policy such as a national renewable energy use goal, but such goals are a measure of how seriously the installation of BIPV will be taken in a given nation. In particular, a strong national sense that it is important to adopt green technologies may well favor BIPV over regular PV as way of proving that PV is integrated into cultural consciousness as well as physically into buildings
A second factor is the state of the construction market in any given Asian country and this factor applies in two senses. First one must obviously consider the general health of the construction industry. The consensus here is that PV is much more likely to be installed in new construction than as a retrofit, since this is where PV offers the best economics. And obviously, this kind of market factor impacts BIPV as much as it does PV; indeed more so because full-scale integration as a retrofit is harder than just screwing a panel to a roof. The other sense in which the state of the construction industry is of importance is in terms of the interest level in building the kind of prestige building that currently constitutes a large part of the BIPV market.
The third factor is the regulatory framework in which PV in general operates. Obviously, fiscal and other incentives have a strong influence on whether PV – including BIPV – is deployed or not. In theory, there could be special incentives for BIPV, perhaps on the grounds of the need to safeguard urban aesthetics. As far as we are aware, only China has such special incentives for BIPV at the national level. Finally, there are general issues of economic development that impact BIPV deployment. More specifically, BIPV can be characterized as a very high-end building product and in geographical areas that could be considered underdeveloped economically, there is only limited room for such products.
The realities of factors that impact the BIPV market in Asia listed above are complex and equivocal, this being most obviously true of cultural factors. For example, some countries in the region apparently have ambitious plans for renewable energy deployment and integration, but it is not always clear how seriously these should be taken. Secondly, there uncertainties with regard to regulatory structure and what impact that has. For example, there seems to be much confusion as to what China actually subsidizes under its BIPV subsidy.
Then, of course, there are more general economic uncertainties with regard to the world economy; whether we are about to slip into a double dip recession, for example. There is also the question about when boom construction markets in China, India and a few of the other smaller Asian countries will begin to quiet down or go into decline.
This does not mean that these segments generate minimal revenues, but rather that there are established suppliers that are hard to compete with and the profitability is hardly worth the prize. That said, there seem to be a growing number of applications where the market is open to new conductive coatings and new suppliers. It is such areas that this report and its ancestors focus on. Each of these areas, we believe, is dynamic enough to warrant annual analytical coverage; and this is the main objective of this report.
Although the emerging opportunities for conductive coatings are hard to classify precisely, we see most of them as falling into three categories. Arguably the most important category is the conductive coatings used for contacts and electrodes for new types of electronics, optical devices, batteries and photovoltaics panels.
But the story is bigger—much bigger—than this. Antistatic coatings for packaging and industrial clothing is likely to see something of a boom as the semiconductor industry moves down the path set for it by Moore’s Law. As the node size decreases, the concern about damage from static electricity and vagrant currents becomes more important. With the semiconductor industry about to move beyond the 45-nm node, antistatic coatings are becoming increasingly essential in electronics packaging, as well as for the clothing and furniture used in the electronics industry.
The conductive coatings used for antistatic applications are mostly bulk materials and this is also true for the coatings used for EMI/RFI shielding, which NanoMarkets believes is another area of growing importance with main driver being the of computing and communications becomes from wired to wireless. We note that in this report, we have given considerable more attention to both EMI/RFI and antistatic applications than in previous applications.
Growing Number of Conductive Coatings Materials Choices
That these three areas are important is fairly easy to understand. However, what makes the conductive coatings business much more of a complex market that is in need of analysis is that in many cases, the materials choices for the conductive coatings used in these dynamic areas have yet to be finally settled on. For example, if the inevitable solution to EMI shielding was always layer of copper (a solution widely used in the past), there would be little to talk about in a report such as this.
Traditionally, and for obvious reasons, conductive coatings have been metals. The major exception to this rule is where the coating has had to be transparent as well as conductive; this is the case in the display and solar panel industry for example. In such cases, transparent conductive (metal) oxides (TCOs) have been used, with indium tin oxide (ITO) being widely used because of its relative good tradeoff between transparency and conductivity.
However, the conductive coatings market is dynamic on the supply side as well as on the demand side. There have always been complex tradeoffs between costs and performance in the conductive coatings market and these continue to raise challenges and opportunities, but the appearance of nanomaterials and conductive polymers in commercial conductive coatings has only made the choice of materials more complex, and consequently the opportunities for suppliers of conductive coatings that much greater. Materials selection for conductive coatings may also be impacted by the current worldwide recession. Where a designer might have been cautious about using an indium- or silver-based coating a year ago because of the high price of such metals, in today’s economy these coatings could have acceptable economics.
Zinc oxide (ZnO) has been used since the Bronze Age, but obviously not for its electrical properties; it was used as a salve and as an alloying agent to make bronze. However, since the beginning of the 20th century, ZnO has been used in a number of important electronics products including varistors, surface acoustic wave (SAW) devices, various kinds of EMI/RFI and anti-static coatings, as well as in coated paper used in copying technology prior to the commercialization of xerography.
All products on this list are still in existence and some are important revenue generators. Varistors comprise a business that is worth hundreds of millions of dollars a year and ZnO is the main material from which varistors are built. SAW devices are regularly used in mobile phones, a huge market in volume terms. It is even possible that some growth can be squeezed out of these mature markets for ZnO. After all, the market for mobile phones continues to grow and sales of ZnO to the varistor segment will be boosted by the fact that electronic devices will become increasingly vulnerable to vagrant currents and static electricity as the semiconductor industry continues to produce ever more integrated devices. Something similar can be said about antistatic coatings that use ZnO.
However, none of the applications described above could really be said to be an opportunity in the sense that no firm is going to rush into the ZnO business or have a reasonable expectation that it will be able to raise money to do so based on the prospects mentioned in the paragraphs above. These more mature areas, although they will continue to represent a significant share of the ZnO electronics business even at the end of the forecast period considered here, but are not worth pursuing by new entrants.
Given all this, why would NanoMarkets publish a market analysis of the ZnO industry? Two years ago when we first published a study in this area, the motivation was largely a groundswell of interest in what might be called “ZnO microelectronics,” that is the use of ZnO as a semiconductor to produce thin-film transistors (TFTs), light emitting diodes (LEDs), power electronics, etc. As a compound semiconductor, ZnO could be expected to achieve functionality and performance different from what silicon could achieve in a number of different ways. In addition, ZnO electronic devices could be transparent and this opened up speculations about the potential for a “transparent electronics,” of the kind that was featured in the movie “Minority Report.”
Unfortunately, much of what was hoped for in terms of the more high-tech aspects of ZnO electronics have yet to come about. One reason is undoubtedly the worldwide economic crisis which (among other things), has hurt the chances of ZnO semiconductor start-ups getting money from VCs; something that would have been a natural development in happier times. Another is that—as is so often the case with new technology trends—demand for novel ZnO devices has failed to take off as fast as some people expected.
Nonetheless, we believe that the fundamentals of ZnO electronics are still sound and that it still represents an opportunity for both materials and device companies; not to mention the firms that use ZnO products. However, the timeframes in which we see these opportunities developing are less aggressive than they once might have been. Bearing all this in mind—and especially that ZnO still appears to have significant market potential in the electronics space, but with different emphases and timeframes than would have been judged likely two years ago, NanoMarkets believes that this is a good time to publish a new report in the area.
Building Integrated Photovoltaics (BIPV) is still a fledgling business and although a wide variety of BIPV products are now on offer the volumes sold are still low. Nonetheless, BIPV has the potential to change the terms of reference for the solar panel industry in a number of ways. From the demand side of the equation, BIPV improves the aesthetics of PV and could potentially reduce the total costs of constructing home, offices and factories utilizing solar panels.
Both these factors potentially open up new addressable markets. From the supply perspective, BIPV offers new ways for PV panel suppliers to distinguish themselves in the marketplace. Specifically, it becomes easier for panel makers to show that their products are different from "plain vanilla" panels and also (if they wish) to re-position their products as building materials rather than PV panels if this fits in with their product/marketing strategies.
All of the above should be very welcome news for the PV industry which has lost momentum in the past couple of years as the result of the worldwide recession and the near collapse of construction markets in a number of geographies.
BIPV: The New Value Proposition for Solar
Aesthetics: For the earliest adopters of photovoltaics the value obtained from the PV system has often come from a sense that they are complying with the goals of environmental ideology. In some cases, they have also certainly considered the panels and mechanical systems supporting them to be attractive works of art. However, it was always unlikely that PV could spread into large addressable markets based on such drivers.
Understanding this was what led to the first generation of BIPV product. This first generation of BIPV systems was primarily architectural in nature. It consisted of attempts to make the PV panels more unobtrusive,such as installing them parallel to the roof surface or even hidden on a flat roof—and without the sun-tracking systems that would boost performance at the expense of a much more visually conspicuous system—and choosing thinner panels. In addition to helping PV appeal to a broader audience, the first generation of BIPV also has been intended to meet the requirements of certain local governments, which have either mandated BIPV or required that PV panels be hidden from view.
These first generation BIPV systems are not our primary concern in this report. Rather we are more interested in BIPV products as opposed to BIPV design. The BIPV products we have in mind here are those that integrate smoothly with building surfaces. At a minimum, they lie flush on a rooftop or wall; more specialized products also serve as roofing or cladding themselves or even as skylights or other building features. BIPV products, properly installed, simply look better to most observers, a major concern for buildings and systems that will be present for several decades. Along with many less tangible benefits, the beauty of a building contributes to its value.
Costs: Inevitably, the cost of a BIPV system is higher than a standard PV panel of a similar performance. However, the big hope for BIPV is that it can lower the total costs of construction of a BIPV-enabled building, since the cost of using BIPV materials will be lower than using conventional building materials in conjunction with conventional PV systems.
It is not yet clear that BIPV has yet reached a point where the expectations set out in the paragraph above are being met and to some great extent, BIPV will stand or fall on whether they are. However, if costs for BIPV begin to reach the point where BIPV products can be positioned as high-end building materials it opens up a lot of new possibilities for solar panel makers who have adopted the BIPV approach; these possibilities include everything from new marketing channels, to opportunities for creating new brands, to yet another way to distinguish their products from conventional panels.
Three Approaches to Building Integration: Rigid, Flexible, Transparent
From a product perspective, NanoMarkets believes that the BIPV market into three broad categories, based on the function that the BIPV products serve in the building envelope. These categories are (1) rigid BIPV tiles and panels, (2) flexible BIPV products and laminates, and (3) transparent or semitransparent BIPV glass products. Each of these product categories are at a different level technological maturity and also have significantly different addressable markets.
Rigid products: Rigid BIPV products represent a minimal departure from the manufacturing of conventional panels, which are overwhelmingly rigid. As such, they are relatively low risk, presenting customers with similar perceptions to those that they have come to expect from regular PV panels.
NanoMarkets, however, believes that there are distinct opportunities in this space that BIPV can tap into in a manner not available to conventional PV panels. Rigid BIPV products that are available or planned include tiles that are designed to interlace with conventional roofing tiles or cladding materials; larger tiles that serve as entire roof portions or wall portions themselves; and thin, flush-mounted panels that overlay conventional roofing or siding but are specifically designed for flush mounting on buildings.
Flexible products: Flexible PV laminates are a newer direction for BIPV than the rigid systems described above. Besides flexible PV laminates, which are designed to be glued onto existing building materials such as metal roofing, there are also products like flexible shingles that interlace with conventional asphalt shingles. Also coming soon are flexible building materials with PV cells built or deposited directly onto them. These products aim to integrate the PV panels more completely with building materials than today's laminates which are applied in a separate installation.
The flexible product segment of the BIPV market clearly involves novel products and as such they represent a riskier business proposition than the rigid BIPV products described above. They are also reliant on using newer materials platforms; primarily thin-film and organic PV, since these materials are flexible and conventional c-Si PV is not. It is still an open question as to which of the several thin-film/organic approaches to PV is best suited to flexible PV.
Transparent: BIPV glass products are in many cases essentially a way of using glazing to make PV cells and modules into decorative building features. For the time being, at least, they are typically not transparent enough to provide good visibility through the panel and they are thus not used where visibility is important. But they do offer the opportunity to integrate PV into buildings in places and as part of features where the penetration of some sunlight is desired.
The initial markets for BIPV glass are in skylights, facades, curtain walls, and shade structures such as canopies and it can often be easily built to custom dimensions and shapes, either by adjusting the number and spacing of crystalline silicon cells or by cutting thin-film PV panels to size. The possibility of windows that are also PV panels has been much talked about, but the materials and manufacturing platforms necessary to produce a real product of this kind, seem quite far off.
In serving the applications for silver inks and pastes, manufacturers and distributors face a quandary: most of the high-growth markets for silver are relatively small, while the larger markets are already mature and generally offer only modest growth prospects. But the photovoltaics market for silver inks and pastes offers the best of both worlds. This segment is already approaching a billion dollars in annual revenues, but it will grow faster—in absolute terms—than any of the other silver ink categories, and it will challenge traditional thick-film applications for dominance of the overall silver electronics market by the end of the period covered by this report. With all this in mind, this report specifically analyzes the photovoltaics-related markets for silver inks and pastes, in order to provide a comprehensive analysis of the revenue opportunities for firms in this space.
NanoMarkets' just-published analysis of the ITO alternatives market suggests that this market - much touted for several years - is ready to take off. We have been following ITO alternatives for several years now and have generally been quite bullish on their long-term prospects. In our latest report, however, we show that news from the alternative ITO "industry" is pointing towards accelerating commercialization.
In terms of "hard cash" we see revenues from ITO alternatives growing from about $140 million in 2010 to $1.1 billion in 2015 and then going on to reach almost $2.0 billion in 2017. And while almost all of the 2010 number will come from low-margin/commodity transparent conducting oxides, much of the future opportunity will come from more exotic - and certainly more profitable - nanomaterials; especially carbon nanotube films and nanosilver films.
The PV industry has already shifted its interest from ITO to other TCOs on cost - and cost stability -- grounds. But, while alternative TCOs inevitably have cost advantages over ITO, they are usually far less transparent and conductive. We continue to believe that nanomaterials-especially nanosilver inks and carbon nanotube coatings-represent the only materials category where there is a significant likelihood of achieving materials that outperform ITO in terms of both transparency and conductivity while also reducing costs. Such materials either realistically promise very low materials costs (carbon nanotubes) or low-cost processing (nanosilver inks) or both. Other advantages that these alternatives may offer are cost stability (nanotubes again) and flexibility (good for touch-screen and flexible displays).
Research and development in these areas has been ongoing for years and this has often seemed to involve mostly fairly obscure companies. However, dig down a little further and you find that there is considerable interest from larger firms too. Ascent, a major player in the CIGS PV space, is working with Cambrios to develop nanosilver materials as the transparent electrode for its PV cells. Meanwhile, Sumitomo has a tripartite relationship with Chisso and Cambrios to sell a similar material into the LCD industry. Sumitomo, through its CDT subsidiary, has also announced the use of a copper formulation to replace ITO in OLED lighting.
And on the nanotube front, LG Display has a recently negotiated a joint development agreement with Unidym, which is also working with Samsung on nanotube transparent electrode film for e-paper displays. Then there is Novaled and Saint-Gobain Recherche, which announced as long as two years ago that they had developed a transparent electrode material for OLEDs with up to ten times the surface conductivity of ITO.
We believe that with the involvement of such companies, there is a very good chance that ITO alternatives will quickly reach a level of technological maturity that enables them to be a serious competitor to ITO in a number of important applications.
NanoMarkets believes that one of the fastest growing technology markets in the next five years will be solid-state lighting (SSL). This sector consists of high-brightness LEDs (HB-LEDs), organic LEDs (OLEDs) and an already well-established technology; electroluminescent (EL) light. SSL is about to get a boost from the phasing out of incandescent bulbs on energy efficiency grounds that will occur in the U.S., Europe and many other geographies that will occur around 2012.
SSL is a core focus of NanoMarkets and we discuss its prospects in depth in a number of our reports and articles. Here, however, our interest is in SSL as a market for silver inks and pastes. We expect this market to get close to $250 million in sales by the middle of this decade. This compares with almost zero revenues at the present time. Our principal interest in this article is with silver used for OLED and EL lighting in electrodes and bus bars. Silver is not used in HB-LED lighting.
Uses of Silver in OLED Lighting
OLED lighting is just at the beginning of its market evolution. Although a number of very “cool” OLED light fixtures have appeared at major lighting trade shows, the reality is that if you want to buy OLED lighting today, what is available to you would be kits consisting of some OLED material and the necessary electronics. These kits are intended for designers who want to work with OLEDs and take OLED lighting to the consumer product level. An encouraging sign for OLED lighting is that important firms are investing in its development. The three giants of the lighting industry – GE, Osram and Philips -- are all in this space, as are leading OLED firms such as Novaled, and UDC.
Printed silver already has a foothold in the OLED business. It has been discussed as an electrode material for OLED displays and this thinking would certainly translate into use in the lighting environment. At least one company -- Add-Vision (AVI) – has already made silver cathodes a core part of its technology. The motivation here is that more conventional cathode materials such as calcium are extremely sensitive to environmental conditions, requiring tightly controlled deposition conditions. Even after the cathode has been evaporated, it must remain inside a nitrogen environment, which adds complexity and cost to manufacturing.
By adopting silver as a cathode, AVI is able to create a manufacturing environment in which OLEDs can be printed. While these OLEDs are not high-performance; of the kind that could be used for say a high-definition television, they are very suitable for simple backlighting, signage, etc., adding a brightness and variety of colors that have not been available before. In this sense, silver pastes, represent an enabling technology for OLEDs, allowing them to reach market segments that would not be available to them using conventional materials.
Another way that silver could serve as enabling lighting in the OLED lighting is by serving as bus bars. To be commercially successful, OLED lighting must be available in relatively large-sized panels; a few feet across, not the few inches that is achievable now. The problem here is that if one thing has been learned through the course of development of OLED lighting it is that their lighted appearance is very sensitive to voltage drops. Long passes of current through relatively high-resistivity ITO or comparable transparent conductors result in voltage drops that appear visibly as dimmed portions of the device.
On the face of it, OLEDs appear to have a lot of market potential. Their vibrant colors and thin format promise a new generation of televisions and mobile displays much superior in visual quality than LCD displays. And OLED lighting may a new technology that fills the gap when incandescent lights begin to disappear from the market in the 2012/2013 timeframe.
In both cases, price points are going to be crucial to the success of OLEDs and one way to achieve better prices is with printing. As we emphasize in this article, this is largely a matter of finding the right materials. Although printed OLEDs have never quite achieved the success that some have projected for them, as this article shows, a surprisingly large number of the world’s biggest materials and chemical firms are betting on them. The information for this article is drawn from NanoMarkets’ latest research report on OLED materials in which we forecast that sales of polymer OLED materials – the kind of OLED materials used in printed OLEDs – will reach $475 million in sales by 2017.
The OLED business has had many ups and downs. Once predicted to be “what’s next” after LCD, OLED displays have lingered at the fringes of the display industry for quite a few years, and have only just begun to move beyond the physically small and unprofitable MP3 and cell phone sub-display sectors. The hope for ultra-cool – and ultra-thin – OLED TVs took a hit last year when it became apparent that in the middle of the world’s worst recession for many years, consumers would be unwilling to pay thousands of dollars for a medium-sized OLED TV set.
Perhaps the final indignity for OLEDs came when, at the end of 2009, Kodak, who more or less invented OLEDs, announced that it would sell its OLED business to a group of LG companies.
Nonetheless, OLEDs are alive and well. A new generation of OLED televisions is expected to reach the market soon. And perhaps more importantly, OLED lighting now seems to be a major opportunity to provide the efficient lighting that the market will demand when incandescent lights start to be phased out in the 2012/2013 timeframe in many nations across the globe.
With all this in mind, NanoMarkets believes that it is important to remember that the opportunities available in both the OLED display and lighting space are first and foremost materials-enabled opportunities; they are all about designing materials that have better and better lifetimes, brightness, efficiencies, frequency stability and manufacturability.
No wonder then that some of the world’s great materials firms – DuPont, 3M, Bayer, Sumitomo, among them – have staked their claim in the OLED space. It is also a vote of confidence in OLED technology which, as we have just seen, could use such a vote. But we must also ask ourselves what exactly is this vote for. What has become the standard version of OLEDs uses small molecule materials and what amounts to deposition technologies that have been borrowed from the standard armory of manufacturing tools.
But there is another way to make OLEDs and that is to print them.
Carbon inks have been a mainstay of the thick film electronics business for as long as most people can remember. The established carbon inks are used with silver inks, either to adjust conductivity levels or to reduce costs; carbon, obviously, is priced at a lot less than silver. And in a period of deflation, especially when this is (paradoxically) combined with high silver prices, NanoMarkets sees a growing opportunity for standard carbon inks to replace silver inks wherever this is technically possible.
But in the long run purely cost-based strategies are inherently based on the idea that what is being sold is no more than a low-margin commodity, which is essentially what the older carbon inks are. By contrast, inks and pastes based not on these inks, but on new high-conductivity carbon materials; carbon nanotubes and graphene, provide a way forward based on value-added products that – potentially at least – can offer suppliers attractive margins.
Carbon nanotube inks have been available from a number of vendors for several years. It is especially closely associated with Eikos, which seems to have pioneered the idea. By contrast, graphene inks are very new and have been mostly identified to date with Vorbeck Materials which has developed a graphene-based ink in cooperation with BASF. But today, the revenues from these inks are negligible. However, NanoMarkets believes that five years from now these newer materials will have created reasonable size businesses – $157 million for carbon nanotube inks and pastes and $130 million for graphene. A few years later, by 2017, we expect carbon nanotube and graphene inks together to account for almost $815 million in revenues.
As a practical matter, we see most of these revenues as coming from opportunities in which these new “nano-carbon” inks replace either conventional carbon or silver inks or sputtered ITO. The main reason why NanoMarkets is so optimistic about “nano-carbon” inks is that like conventional carbon inks they can not only beat widely used materials on price, but unlike conventional carbon inks choosing nano-carbon does not involve a compromise on performance and indeed in some areas there may be reason to expect performance improvements.
Although the expectations are that the OLED lighting market will eventually generate billions of dollars in annual revenue, today’s revenues from these products are miniscule. Many of the OLED lighting products that are being sold today are intended: (1) to get the message out to designers, rather than create business directly; (2) to get feedback from designers on how to improve the product; and (3) to enable luminaire and consumer products companies to create new value-added products and opportunities, thereby helping to bring into being a market for OLED lighting that has never existed before.
Interim Products: Before the General Lighting Market Takes Off
NanoMarkets’ latest analysis suggests that – absent any major economic crises -- the OLED lighting market will start to see a transition to “real” products during 2010. By “real” we mean products that are intended to be sold to customers other than designers/architects and not just limited editions or prototypes intended to impress the lighting community at trade shows.
What we are seeing this year is that several firms are starting to ship OLED lighting in sampling volumes. These include GE and Konica Minolta (who are in an OLED lighting partnership), LG (which may have altered its plans since the Kodak acquisition), Showa Denko and Modistech. By next year we expect the product launches to accelerate. Still even then NanoMarkets does not expect the initial volumes shipped of these products to be all that great; no more than perhaps in the hundreds or thousands per item.
And the products being sold at first will be of the luxury or specialty kind. This is because of the technical performance, high pricing and competitive realities of OLED lighting, which mean that for a few more years OLEDs will not be able to chase after the general lighting market. Instead, OLED lighting will first make its mark in areas where there is a premium for novelty and where the price sensitivity is not toogreat.
Current and Future Pricing of OLED Lighting: Too Expensive for Prime Time
Pricing is everything, of course. At this early stage of market evolution, the price points of OLED lighting products do not come close to being competitive with conventional lighting. In the past year or so, however, several firms have announced pricing for products and in some cases have also said something about future products too.
In our most recent report on OLED lighting, we analyze these announcements in some depth. We note here, however, that the products with the greatest mindshare are “designer kits” from Philips and Osram; two of the world’s biggest lighting makers. Osram’s Orbeos product is priced at €250, while the Philips Lumiblade kit offers an OLED driver and electronics is priced at €70, with small pre-shaped OLEDs ranging from €72 to €248.
While revenues from the thin-film/printable battery market are negligible right now, NanoMarkets’ analysis believes they could reach over a $1.0 billion by 2015. However, this encouraging forecast begs the question of how battery firms can best tap into this opportunity. With this in mind, this article describes the strategies that thin-film/printable battery firms are and should adopt to penetrate their addressable markets.
The thin-film/printable battery sector continues to excite the imagination of futurists and journalists because it summons up images of an Internet-of-things, with the things in question being powered by paper-thin batteries.
This is an exciting prospect, but the realities of the thin-film/printable batteries business have so far not proved as rosy as most once hoped. Many (but by no means all) of the firms active in this space are unfunded or otherwise stretched financially. Others are prettyclose to being science projects. NanoMarkets’ estimates for this year’s revenues from thin-film/printable batteries is just under $30 million; not impressive for an industry sector that has been around for quite a few years now.
NanoMarkets recent report on this topic, however, suggests that there is considerable hope for the thin-film/printable batteries in the future. We see especially good prospects for such batteries in the sensors, smart cards and RFID sectors. However, this is a demand-side analysis and begs the question of whether, how and to what degree firms in the thin-film/printable battery space are able to design strategies to capitalize on the opportunities.
Success in the Thin-Film/Printable Battery Space: How Four Companies Define Their Strategy
A few thin-film/printable battery firms stand out, however, as having successes to date, coupled with plausible business cases and the money to make them happen. A few have even made their case forcefully enough to attract significant amounts of capital from venture capitalists and strategic investors. By “significant amounts of capital” what is meant here is tens of millions of dollars.
According to NanoMarkets/Smart Grid Analysis, the Smart Grid supercapacitor market will reach $3.8 billion in 2015. Today, however, the market for these systems is worth only about $0.4 billion with by far the biggest chunk of revenues coming from one specialized application, namely regenerative energy capture with load smoothing for light rail applications. Our latest report on the topic, however, suggests that new applications , especially those related to power quality and grid instability applications , are likely to be driven significantly forward by the impressive gains that Smart Grid supercapacitors have been able to achieve.
Compared with conventional capacitors, so-called supercapacitors offer much more charge to be stored per volume. This is achieved through increased electrode surface area and the addition of a liquid electrolyte. Most supercapacitors on the market today use activated carbon as the electrode material. The charge is stored via charge separation and alignment of dipoles in the electrical double layer. The thinness of this layer along with its large electrode surface area allows the super-sized capacity of supercapacitors compared to conventional capacitors. Unlike batteries, charge is separated, but no electrochemical redox reactions occur.
Although supercapacitors have been little more than a niche product for certain high-priced storage applications for a number of years, recent technology and materials improvements suggests that they will have a growing role in practical large-scale storage applications in the Smart Grid in the future. While the 100-Farad (F)-and-below-class of supercapacitors are used in many consumer applications, and are not suitable for large-scale electrical storage, the newer class of 1000 to 5000 F and above systems are being examined for possible use in large-scale grid quality and short-term UPS applications.
Supercapacitors versus Batteries
Batteries –using a variety of different technologies -- are also likely to see a growing role in the Smart Grid. They would usually have higher power densities than supercapacitors. However, supercapacitors have two advantages over batteries:
· They have very high lifecycle lifetimes; a consequence of the fact that (unlike batteries) supercapacitors have no chemistry going on. They exhibit durability through multiple charge/discharge cycles. Today’s supercapacitors are rated to last through 500,000 discharge cycles so they are essentially good for the lifetime of the storage system. Supercapacitors are also durable from the perspective that they do not have any memory effects, or issues with full or partial discharges that effect their overall service lifetime.
· Supercapacitors are extremely high energy devices that can dump the energy very quickly, allowing them to react to power dips and other stability phenomenon,
Until recently the response to growing electricity demand was to add more generating capacity and not worry too much about how much electricity simply vanished at the generating station or in the transmission and distribution lines. But the prospects of huge demand for electricity emanating from India and China coming will all but guarantee rising prices for electricity in the coming decade. Given this, the old slogan “too cheap to meter” could soon be replaced by new description of electricity: “too expensive not to monitor.”
The rising price of energy is not good news for most businesses. However, NanoMarkets/Smart Grid Analysis believes that one industry that should see significant revenue increases as a direct result of the “too expensive not to monitor” trend will be the sensor industry. Putting more sensors into the grid will be essential to increasing the efficiency of the electricity power infrastructure, which itself is essential at a time of long-term rising prices for electricity. In addition, more sensors help meet the growing demands from regulators and consumers for more grid reliability at a time when this reliability is challenged by everything from cyber-terrorists to the need to integrate highly fluctuating renewable energy sources.
As we see it, these new demand drivers for Smart Grid sensors are enhanced by the fact that the deployment of sensors in the grid has been notoriously lacking for many years – especially in the distribution segment – but we believe that by 2015, more than $7.5 billion in smart sensors will be sold for applications in electricity grids around of the world. And the grid sensor market will be both enabled and accelerated by the fact that – while the cost of electricity may be going up – the cost of electronic devices and RF networking interfaces to control centers – are declining in line with Moore’s Law.
So in the future we see the grid sensor business having the opportunity of not only supplying more sensors but doing so at lower prices; hence NanoMarkets/Smart Grid Analysis’ bullish forecasts for this part of the sensor industry. Moving beyond generalities, however, there are three types of sensors that we think have an especially large market potential in the future. These are dynamic line rating sensors, sensors for storage and voltage sensors that (among other purposes) provide a quantum leap up in terms of functionality from today’s grid voltage regulators.
Dynamic Line Rating Sensors: To Know it When the Wind Blows By using sensors to monitor real-time temperature, wind, voltage and current information, evidence suggests that effective transmission capacity can be increased by up to 10 to 15 percent compared to capacity planning models which dictate transmission capacity based on static worst-case weather, wind and temperature scenarios. We believe that over the next decade high voltage line temperature and weather condition sensors will be an emerging opportunity as dynamic line rating techniques become common especially on congested transmission routes. The economics of this is all to easy to understand when one considers that high-voltage AC and DC lines can cost between one and two million dollars per mile.
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