New Strategies Needed for the OLED Materials Business Gets Tougher, But New Opportunities Abound

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

We think that the OLED materials business is likely to get tougher in important ways.  It is one thing supplying materials to an industry whose end product is mostly a type of display that shows a clock or date on one side of a cell phone.  It is quite another supplying materials to an industry whose goal is to produce large displays for videophiles and attractive lighting that offers high-efficiency and improved total cost of ownership.  AM OLED displays are largely being marketed in the consumer electronics space on image quality and vibrancy of color.  This raises the question as to how materials makers can improve their products to help their customers sell more OLED cell phones and TVs.  In the OLED lighting space, the focus is on efficiency and reducing total cost of ownership and, here again, it seems that OLED materials suppliers can develop proprietary solutions that will give them long-term competitive advantages.

What will be required will be new strategies that match materials to specific sectors of the OLED market.  This has the implication that it will be easier for firms to distinguish themselves in the marketplace with distinct products and it may shift the focus of product/market strategy away from IP concerns to innovation to a greater degree.  This shift will also encourage innovative new firms to enter the OLED materials business, but at the same time it will encourage the consolidation and other strategies that facilitate economies of scale.

What are the dimensions along which such innovation can be achieved?  There are an almost infinite variety of possibilities afforded through doping.  However, we expect that emerging strategies in the OLED materials sector will be broader than this in their scope.  As we discuss in the main body of this report, there are four big research programs now that imply radically different thinking about what materials will be required for future OLED stacks.  The dominant paradigm—used by almost all OLEDs available today involves vacuum deposited small molecule materials.  This has been challenged by a solution processed polymer that is now most closely associated with Sumitomo. 

This approach has yet to clock up many successes and its future has been rendered even more cloudy by the arrival of solution-processed small molecule approach from UDC and (most prominently) DuPont.  This could steal the thunder by delivering the advantages of solution processing to the OLED industry without forcing the industry to shift to an entirely new kind of material.  Finally, there is the pragmatic approach being adopted by Novaled, which has worked with both sides of the polymer/small molecule divide and has advocated an approach that uses a hybrid OLED stack incorporating both polymers and OLEDs where appropriate.

Another big issue is pricing.  Until now, OLED materials seem to have been stuck in between the high prices that are typical of a research material and much lower ones that are associated with widely used electronic materials.  This has not been good for the industry’s evolution, but with new applications for OLEDs quickly reaching the market, pricing for these materials should finally be able to take advantage of real economies of scale. 

These are the big issues that the OLED materials industry needs to resolve, but there are smaller issues too.  OLED materials firms often supply complete materials sets, but in a few cases they have limited their output to one layer; for example, the HIL layer.  This permits them to do what they are good at.  Such firms will obviously benefit from the growth of the OLED industry just like everyone else, but how possible will it be for them to specialize in a world in which OLED panel makers are likely to be attracted to one-stop shopping?  Another question related to how vulnerable currently used strategies are to the new business environment in the OLED space is whether it will be possible for smaller “materials” firms to remain fabless, farming the actual manufacturing of their materials out to larger specialty chemical companies?

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