Squaring Off in the Flat Panel Display Market

15 July 2002 00:00  [Source: ICB Americas]

Although the market for flat panel displays was down in 2001, a casualty of the poor economy and excess capacity, it is improving this year as the global economy improves and demand catches up with supply. Industry estimates are very strong in both the near and long term. Liquid crystal displays, the primary flat display technology, stands to benefit, but the up-and-coming technology of organic light-emitting diodes also shows promise.

The flat panel display market is one of the fastest growing electronics markets, with growth rates of nearly 47 percent projected for 2002, according to Display-Search, an Austin, Tex.-based flat panel display industry consulting firm. Flat panel displays are found in a wide range of electronic products, including desktop and laptop monitors, digital cameras, personal digital assistants (PDA), cellular phones, public displays and televisions.

Valued at $22 billion in 2001, the flat panel display market is projected to grow to $32.3 billion in 2002, estimates Barry Young, vice president and chief financial officer of DisplaySearch. "Flat panel display revenues are expected to surpass CRT [cathode ray tube] revenues in 2002 and earn 65 percent of the display module market in 2006," reports Ross Young, president and CEO of DisplaySearch.

Liquid crystal displays (LCD) are the primary flat panel display technology, holding nearly 90 percent of the 2001 market share in value, according to Display-Search. Plasma display panels (PDP), used primarily in televisions, have almost 6 percent market share. Other technologies such as organic light-emitting diodes (OLED), vacuum fluorescent diodes (VFD), liquid crystal on silicon (LCOS), digital light processing (DLP), electroluminescent displays (ELD), nanoblock and field emission displays (FED) make up the remainder of the market, according to Display Search (see table below).

Although OLED technology currently has only a small share of the market value, it is expected to have growth rates of 65 percent CAGR from 2002 to 2008, notes David Mentley, senior vice president, of iSuppli/Stanford Resources, a San Jose, Calif.-based display industry consulting firm. By 2006, OLEDs are expected to have about 4 percent of the flat panel display market, and LCDs will hold almost 82 percent, reports DisplaySearch. However, OLEDs may eventually challenge LCD as the major flat panel display technology, say industry experts. "The history of the display industry is littered with once promising technologies that never were able to go commercial. However, a broad range of companies have demonstrated OLED-based displays [at this year's Society for Information Display (SID) conference], which creates an aura of inevitability around the technology," says Credit Suisse First Boston analyst Gibboney Huske.

Liquid Crystal Displays

LCD is a mature technology with efficient manufacturing, although companies continue to develop new products and more efficient processes. The list of materials used in LCD production is extensive, including glass and plastic substrates, photoresists, color filters, pigment dispersion materials for color filters, photomasks, sealing materials, spacers and liquid crystal materials. The LCD materials market was valued at $3.9 billion in 2001, estimates Robert Castellano president of The Information Network, a New Tripoli, Pa.-based consultancy for the semiconductor, computer and telecommunications industry. The LCD materials market is projected to have an average annual growth rate (AAGR) of 16.4 percent through 2005, reaching $4.7 billion in 2002 and $7.1 billion in 2005, he adds.

"The impact of new technologies [such as OLED] on LCD materials and market share will be insignificant compared with the predicted growth of LCD applications within the foreseeable future," notes a Merck KGaA official. Merck KGaA is the largest supplier of liquid crystals. Merck, Chisso and Dai Nippon Ink & Chemicals have a combined global liquid crystal market share of 80 percent, estimates the Fuji Chimera Research Institute Inc., a Jap-anese market research firm, in a report translated by InterLingua Publishing.

In the last year or two, the industry saw an explosion of growth in LCD desktop monitors, and future markets will include larger desktop screens and LCD televisions, notes Michael Ciesinski, president of the United States Display Consortium (USDC), a display industry research organization. Display manufacturers are investing in OLED development for the long term, but are also investing in making LCD displays efficiently and keeping LCD market share as long as they can, note industry experts.

Merck supplies LCD components such as liquid crystals, indium tin oxide coated glass substrates, color filters and optical films. LCDs will continue to dominate large display applications such as monitors and notebook computers, projects the Merck official. High growth in these markets is driven by LCDs' low power consumption and weight, small space requirement, and user-viewing comfort with low flicker. In another high growth area, flat TV, LCD will share the market with plasma display panels (PDP). "For portable applications such as personal digital assistants (PDA) and electronic books, energy saving reflective and bi-stable LCD may play an important role," says the official.

Dow Chemical Company's advanced electronic materials (AEM) business plans to be a major player in the flat panel display market, both through its polymer-OLED development and its Cyclotene benzocyclobutane (BCB) product commercialized in 1992 for applications including LCDs, notes Bill Yue, global commercial manager for BCB. Dow is the sole supplier of BCB. One of Dow's leading segments for its BCB business is in active matrix (AM) LCD, where it is used as a dielectric material to improve display brightness or battery life of notebook computers.

OLED

In comparison to LCDs, which transmit light and thus require a backlight, OLEDs are self-luminous and emit light. OLEDs advantages over LCDs include reduced power consumption, improved brightness and contrast, wide viewing angles and high switching speeds that allow displays to be refreshed faster and to support better graphics.

OLED displays are expected to be less expensive to produce than LCD displays because of fewer materials and manufacturing steps, but actual cost savings have yet to be demonstrated, notes Robert Pinnel, chief technology officer of USDC.

"In monitors, 65 to 70 percent of the cost is in materials, so the hope is that if OLEDs can be made efficiently, you will gain from lower material cost," explains Norman Bardsley, director of roadmaps and standards at USDC. Initially, fabrication costs of active matrix (AM) OLEDs will be higher than those of AM-LCDs, says Mr. Bardsley. By 2004, AM-OLEDs are expected to be established commercially but with lower yields and higher costs than AM-LCDs. By 2007, AM-OLEDs may be competitive in price to AM-LCDs, projects USDC. Passive matrix (PM) OLEDs are less complicated to manufacture than AM-OLEDs, and several PM-OLED products are commercial. PM-OLED products have improved performance attributes, such as brightness, but it is questionable if consumers will pay more for the improvements, says Mr. Pinnel. However, AM-OLEDs have performance attributes such as fast response that will meet market needs, he adds.

The first commercial areas of OLED technology growth will be cell phones, personal digital assistants and games. OLED technology gives people more viewing choices and will lead to a growing market overall for flat panel displays rather than just stealing market share from LCD technology, says USDC's Mr. Ciesinski.

The two main OLED technologies in development are small molecule OLED (SM-OLED) and polymer-based OLED (pLED, poly-OLED), sometimes called light-emitting polymers (LEP). SM-OLED, produced by evaporation deposition of several layers of material, has the advantage of being further along the development learning curve and has better color characteristics. Poly-OLED can be produced with solution processing techniques such as spin coating or conventional printing methods, allowing easier and less expensive display fabrication, notes Dow AEM.

Dendrimer materials for OLEDs, a second-generation technology in development by Opsys, a Cambridge, UK-based OLED technology developer, combine advantages of small molecule and poly-OLEDs. Dendrimer materials have "highly efficient phosphorescent emitting cores" and are solution processable, explains Opsys. Although dendrimers are in an earlier stage of development than other OLED technologies, their long-term potential may be greater, projects Michael Holmes, CEO of Opsys. Opsys plans to produce commercial product in 2004.

Flexible substrates to replace glass have a strong potential for growth and could be used with both OLED and LCD technologies although flexible OLEDs are more promising, note industry experts. Flexible substrates are expected to play a significant role in future OLED development and offer the potential for inexpensive roll-to-roll processing. The first challenge for flexible OLEDs is to develop a package to protect the OLED from air and moisture because plastics are much more permeable than glass, notes Janice Mahon vice president of technology commercialization at Universal Display Corp. (UDC), a leader in flexible organic light-emitting diode (FOLED) technology. New, flexible perimeter sealants must also be developed.

The second challenge for active matrix displays is to develop thin-film transistor (TFT) backplanes on plastic substrates, which are more heat sensitive than glass. Several companies are working on low-temperature polysilicon (LTPS) technology to overcome this problem. AM FOLEDs could be commercial in three to five years, with PM possibly earlier, projects UDC's Ms. Mahon. Other companies such as Kodak and Dow Chemical have early stage development projects in flexible substrates. Dow also has an early stage development project in barrier sealants and coatings for FOLED technology.

Kodak owns patents for and supplies materials to the flat panel display industry for both small molecule and polymer OLEDs. Kodak's emphasis is on getting OLEDs into the marketplace, says Dan Gisser, director of strategic marketing for Kodak. Kodak has a dozen alliances with PM display manufacturers. Pioneer produced the first PM-OLED in a car stereo in 1999 using Kodak technology. Two Kodak licensees, TDK and Ritek, are also producing commercial PM-OLED products. Kodak and Sanyo have a joint venture called SK Display Corp. targeting full-color AM-OLEDs in applications such as digital cameras, personal digital assistants and cell phones. The joint venture factory in Gifu, Japan, a small commercial facility, is producing sample kits to ship in July and plans to ramp up to commercial production in the fourth quarter of 2002. A second, larger factory in Tottori, Japan, is expected to come on line in 2003, reports Mr. Gisser.

Covion Organic Semiconductors GmbH (a business unit of Avecia Electronic Materials since December 2001) manufactures both SM-OLED and Poly-OLED materials. Covion products include orange, yellow and green materials as well as RGB (red, green, blue) polymer materials for passive and active matrix full color applications. Covion's manufacturing facility in Frankfurt, Germany, completed a $5 million capacity expansion in 2000 and can now produce over 40,000 liters of conjugated polymer solution annually and kilogram quantities of small molecule materials.

"Covion has applications development projects with over 25 leading OEMs in electronic displays and consumer electronics," notes a company official. Cov-ion supplies materials to Cambridge Display Technology, Cambridge, UK. In January 2002, Covion and Cambridge Display Technology announced a light-emitting polymer technology licensing and development agreement. Covion and parent Avecia are developing ink-jet technology for full-color Poly-OLEDs.

DuPont Displays, a unit of DuPont iTechnologies, demonstrated single-color PM and AM OLED, flexible plastic OLED, and full-color AM OLED displays at the Society for Information Display show held in Boston in May of this year. "Overall the market for OLED displays devices is advancing nicely with several commercial products launching in 2002 and full-scale production ramp-up occurring in 2003," says Steve Quindlen, president of DuPont Displays. DuPont announced an alliance with Cambridge Display Technology in October of 2001. The agreement gives DuPont a non-exclusive license to Cam-bridge's LEP technology and consolidates the light-emitting polymer intellectual property of DuPont subsidiary Uniax with that of Cambridge Display, notes the company. DuPont's polyOLEDs are produced at its facilities in Taiwan and California.

Dow AEM has commercialized fluorene-based red and green pLED materials and expects to commercialize a blue material by the end of 2002. Recent breakthroughs on blue materials have produced lifetimes of greater than 5,000 hours, which will allow manufacture of full-color display products, says Dave Kyle, senior marketing manager for Dow AEM. An expansion of Dow's pLED manufacturing facility in Midland, Mich., is targeted to come on line in early 2003. The expansion is expected to "position Dow to supply the world's requirements for polymer-OLED display materials for the next five to eight years," says a company official. Dow's collaborative development agreement with Cambridge Display Technology allows Dow to focus on polymer development and for Cambridge Display to focus on device development, explains Mr. Kyle. Under the agreement, Dow has exclusive license to Cambridge Display's development work in polyfluorene-based OLED materials.

Bayer's electronic chemicals business consolidated with H.C. Starck Inc., a Bayer subsidiary, in January 2002. Bayer is one of the few companies that manufacture hole-injection layer materials for pLEDs. Bayer's Baytron P conductive polymer, used in a wide variety of commercial electronic applications, is the product of choice for pLED technology, notes Elie Saad, director of electronic chemicals. By 2007, sales of Baytron in pLED applications are projected to be 10 to 20 percent of total Baytron sales, estimates Mr. Saad. Bayer has several alliances, including a research and development agreement with Cambridge Display Technology.

Universal Display Corp. (UDC) owns patents for phosphorescent OLED materials, which have four times higher power efficiency than fluorescent OLEDs. Phos-phorescent OLEDs have 60 lumens/watt compared to 15 for fluorescent OLEDs, which corresponds to significantly longer battery life in display applications, explains UDC's Ms. Mahon. UDC has demonstrated its technology in green and red and their top priority is to develop a blue material. UDC's joint development partner since October 2001, Samsung SDI Co. Ltd., exhibited cell phones using UDC's green and red OLED's at this May's Society of Information Display. UDC and Sony signed a joint development agreement in early 2001 targeting larger screen AM applications.

PPG Industries Inc., a provider of photochromic and electrochromic technologies and products, is the exclusive supplier for UDC's proprietary organic materials under an alliance formed in October 2000. PPG's specialty synthesis group's facility in Monroeville, Pa., is currently producing OLED materials in developmental quantities and, with minor infrastructure additions, is capable of supplying commercial quantities to meet UDC's near-term OLED requirements for its manufacturing partners.

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