Demand for OLEDs Escalates

Published: August 02, 2011    Category: Advanced Materials OLED Lighting

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.  This was primarily because the market for OLEDs was largely confined to MP3 payers and cell-phone sub-displays and was plagued with cost challenges and low margins. While materials firms were happy to participate in this market, their enthusiasm remained curbed by the fact that despite constant predictions of the "Year of the OLED," these predictions always turned out to be false hopes.  Pessimism about the sector was also encouraged by the fact that a number of display firms quit making OLED displays altogether having been discouraged especially with the difficulties in making AM OLED displays.

But in the past year to 18 months, the opportunities for OLED materials have grown in important ways.  This is because OLEDs have finally begun to take off as a technology; that is, they have become mainstreamed with the arrival of mass-market cell phones that use OLED technology for their primary displays.  This had been talked about for so long that it had become reasonable to doubt that it would ever happen.  But the widespread use of active matrix OLEDs in Samsung phones in particular has dispelled that doubt.  There are just too many OLED phones out there to think OLEDs in cell phones are a flash in the pan. OLED displays are thin and low power consuming, which is perfect for cell phones. And the relatively short life of OLED displays is not a problem; cell phones don’t last that long either.

Other new areas for OLEDs have begun to appear, but are not as much a sure thing as yet.  OLED lighting can already be purchased in the form of “designer” chandeliers and table lamps; with larger segments of the lighting market likely to be penetrated by OLED lighting in the next few years.  The (often unspoken) goals of the OLED lighting research program is to provide high-efficiency lighting that will compete effectively other forms of low-cost lighting, especially compact fluorescent lighting (CFL) and high-brightness LEDs.  It is far from sure, however, as yet, whether OLED lighting will take off in a mass-market sense.
Even more uncertain is the future of OLED TVs.  So far, these have appeared on the market in limited numbers, with limited functionality and always at very high prices.  It seems virtually certain that a new generation of OLED TVs will soon hit the market and these are expected to have a much more acceptable value proposition.  OLED TVs are expected to bring to the market extra thinness and brilliant colors.  However, what is not clear is how well LCD technology will do in terms of catching up with what OLEDs can offer, thereby ruining the chances for OLEDs.  LCD has proved quite good at catching up with its rivals and has all the advantages of an incumbent.

But while there are plenty of uncertainties here, the story set out above suggests that the market for OLED materials is set to grow rapidly as a result of the trends set out above.  Not only are the number of OLED units likely to grow significantly but they are going to get larger; an OLED TV or lighting panel has an area that is many times the size of a mobile-phone display.  This is very good news for firms supplying materials to the OLED business, because the number of square meters of OLED panels shipped is essentially a measure of the demand for such materials.

These hopeful signs of OLEDs at last taking off in a big way should be regarded as very encouraging from the perspective of firms that have already committed themselves to making a business out of OLED materials.  Some of these firms have wondered—aloud or privately—how and when they are ever going to make any money from selling OLED-specific materials.  Until quite recently they have been hard pressed to find good news.   But because of the trends discussed above, we think that a much better case can be made than (say) three years ago for getting into—or staying in—the OLED materials business.  We expect the trends cited above to be instrumental in creating new OLED materials businesses, too.

Share this on social networks or email