Despite a projected $1.5B business opportunity by 2021, the future of OLED lighting is still uncertain.
THE FUTURE OF OLED LIGHTING COULD BE BRIGHT IF...
OLED revenues are mainly driven by display applications, e.g. smartphones, but the industry has also been trying to target lighting applications for several years, based on the technology specifics in terms of design or form factor and efficiency. On this new battleground, OLEDs are competing with LED technology, which has already paved the way with a revolution in Solid State Lighting (SSL) drawing attention away from OLED over the last 10 years. Added to that, the high cost of OLED technology is not making market penetration easier, current low efficacy is slowing adoption and the advantages claimed by OLED lighting companies are not necessarily perceived by the customers. OLEDs will therefore have to find niche or “spark” markets to develop production scale momentum and create a marketing window allowing them to demonstrate the advantages and possibilities of the technology to customers.
Automotive lighting could represent one of the first “spark” markets for OLED lighting technology. Indeed, with the recent integration of LED technology, lighting has evolved from a basic, functional feature to a distinctive feature with a high value potential in automotive. OLEDs have a real potential to differentiate themselves from LEDs and offer new added value. The BMW M4 GTS, commercialized in 2016, is the first commercial car to adopt OLED technology in rear lamps. It is now a question of understanding what level of interest the technology will generate from automotive OEMs/Tier-1s.
To access traditional general lighting segments e.g. commercial lighting or office lighting, OLED technology will have to combine enough different niche or “spark” markets to achieve the economies of scale that will allow for a decrease in cost. In this field, several niche lighting applications are being investigated by the OLED lighting industry: medical lighting and embedded lighting among them.
We estimate that OLED lighting panels have reached a market size of nearly $30M in 2015 and will grow to nearly $1.5B by 2021.
Although more difficult to access, general lighting markets could drive this growth, provided that:
- Enough niche markets are identified to create a minimum production scale, and allow for further price reduction in OLED lighting panels/systems.
- Advantages of OLEDs, as claimed by OLED lighting companies, are demonstrated to customers.
The report presents all OLED lighting applications and associated market metrics for the period 2013-2021, providing details about drivers and challenges, the status of OLED integration, volume and market size per application.
THE OLED LIGHTING SUPPLY CHAIN IS BEING RESHAPED; WHICH STRATEGY SHOULD COMPANIES CHOOSE NOW?
In the past, many companies have overestimated the potential of the OLED lighting market, particularly for general lighting applications. Facing both numerous technological challenges and low demand for OLED lighting products, several companies are now reshaping their OLED activities. Different strategies are being developed, depending on technology, market and value chain positioning.
Some companies have decided to exit the OLED lighting business. This is the case with Philips Lighting, which has sold its OLED assets, or Panasonic, which has announced its withdrawal from the OLED lighting market. However, most of the recent industrial restructuring and repositioning activities were related to M&A: OLEDWorks has acquired OLED assets from Philips Lighting, LG Chem OLED’s lighting business merged with/was acquired by LG Display... Several others are on-going or to be expected in the coming years.
Some companies have decided to focus a part of their OLED activities on automotive lighting, e.g. Osram, or niche lighting applications, e.g. Alkilu, Polyphotonix, Takahata, applications for which OLEDs benefit from a higher perceived added value compared to LEDs and other lighting sources.
Start-ups and companies have also suffered from this gloomy environment as investment has dried up. As a consequence, small companies that develop innovative materials and processes are now seeking industrial partners with deep pockets to pursue their development to the point of commercialization. On the other hand, this trend can also represent an opportunity for bigger players still struggling with technological challenges. Indeed, it might be of interest for them to speed up their development through collaboration with companies bringing “missing technology elements”. In this context, partnerships are more important than ever to overcome technological barriers and create concrete business opportunities for OLED in the lighting market.
Finally, it is also important to understand that there have been few new entrants to the OLED lighting industry in the past years. Most of the newcomers in the OLED field have oriented their strategy toward OLED display applications. Other companies which may have some OLED lighting technologies and which are not yet involved in the industry are waiting for a higher market demand prior to entering the business.
The report presents an analysis of the OLED lighting industry, providing details about the supply chain, main players, collaborations, and recent M&A.
INNOVATIVE TECHNOLOGY SOLUTIONS ARE STILL REQUIRED TO DRIVE OLED LIGHTING INTO MASS PRODUCTION/MARKET
The OLED lighting companies are currently facing the “chicken and egg” problem: how can they develop the large production volume necessary to drive down the cost/price, when the main barrier to entering the mass market is the high manufacturing cost of OLED lighting panels?
The main solutions sought consist of:
- Improving synergies with OLED display technologies leading to optimized supply chain, common R&D development and use of partially depreciated OLED display equipment.
- Focusing research on innovative technologies which can rapidly bring cost reduction and performance improvement.
The majority of commercial OLED lighting panels are still based on the Sheet-to-Sheet (S2S) process where small organic molecules are deposited on rigid glass substrates by evaporation techniques. Breakthrough approaches, promising lower manufacturing costs and/or better OLED lighting design freedom, are tentatively reaching the commercial stage; Konica Minolta opened its Roll-to-Roll (R2R) manufacturing facility in 2014/2015, LG Display started to commercialize flexible OLED lighting panels in 2015 and Sumitomo Chemical recently started to deliver, in limited quantities, its printed polymer-based OLED lighting panels.
Regarding flexible OLEDs, a potential killer “parameter” for OLED lighting, LG Display started commercializing such a device in 2015. However, the availability of cost-effective moisture barrier technology solutions, i.e. substrate/encapsulation levels, is still a key challenge for advanced OLED development. Indeed, flexible OLEDs can be made on different substrates and each one presents some pros and cons:
- Metal foils offer good barrier properties but are opaque.
- Ultrathin glasses are transparent and offer good barrier properties but are relatively fragile.
- Plastic - transparent and highly flexible, but requires a good barrier.
As a consequence, barrier solutions have to be customized to avoid the reliability and lifetime issues inherent with encapsulated OLED devices. In 2016, there is no mainstream solution and many companies have developed their own. These companies put a lot of effort into continuously improving them as a good barrier technology could help to unlock the OLED lighting market’s potential, as flexibility is potentially the killer parameter. It could also find applications in a large variety of other devices like flexible electronics or organic solar cells.
It is also important to highlight that the additional benefit of using flexible substrates could be found in using Roll-to-Roll (R2R) processes, solution-processable materials and solution-based techniques e.g. slot-die or ink-jet and these technologies may result in a reduction of OLED manufacturing costs.
The report presents a deep analysis of OLED technology, OLED manufacturing and associated roadmaps, providing details about the different OLED structures, requirements for each layer, materials used, manufacturing techniques and associated equipment and manufacturing costs.
Objectives of the Report
This report’s objectives are to analyze:
- The current status of OLEDs for lighting applications and future trends
- OLED lighting industry structure and future trends
- The main materials and structures used for OLED lighting panel development and manufacturing
- The main manufacturing techniques and equipment used for OLED lighting panel development
- Manufacturing costs related to OLED lighting panels
- OLED lighting roadmaps and R&D activities
- Volume/size for OLED lighting panel markets