[Authoritative Report] OLED Lighting that Caught Fire at the Frankfurt Exhibition – How Will It Develop in the Future?

OLED lighting has been making waves for some time, and its future development prospects are exciting and transformative. Some institutions predict that the OLED lighting market will reach US$1.5 billion by 2021. At the ongoing 2016 Frankfurt Light+Building, OLED lighting has once again sparked heated discussions. However, the future of OLED lighting still remains uncertain, and some industry insiders still hold a skeptical attitude toward its development prospects. So, what exactly are the development trends of OLED lighting technology, industry, and market in 2016 and the coming years? The following analysis will address this.

(OLED lighting displayed at the 2016 Frankfurt Light+Building)

Automotive Lighting Field Becomes New Direction for OLED Technology Development

OLED market revenue is primarily driven by display applications such as smartphone screens and smartwatches. However, due to technical characteristics including OLED design, form factor, and efficiency, as well as numerous competitors and difficulty in improving profits, industry manufacturers have been striving to develop OLED lighting applications for several years.

However, the currently high cost of OLED technology is not conducive to market development, and the relatively low lighting efficiency has also slowed market application. The product advantages claimed by OLED lighting manufacturers have not gained consumer recognition. Therefore, OLED technology needs to find niche markets or 'guiding' markets to expand product scale and open market windows, so that OLED technology can demonstrate its technical advantages and capabilities to consumers.

Automotive lighting can be said to be the first relatively recognized 'guiding' market for OLED lighting technology applications. In fact, with the recent maturation of LED integration technology, automotive lighting has gradually evolved from a basic function to a vehicle feature with potentially high value. Osram CEO Olaf Berlie once said, 'OLED technology is a key technology in niche markets such as automotive lighting like tail lights. The automotive business is an important market for Osram. Since 2013, Osram has been committed to the R&D of near-graphic display OLED technology for automotive lighting applications.' OLED technology has the potential to stand out from competition with LED technology and bring new added value to products.

The BMW M4 GTS, released in 2016, applied OLED lighting technology in its tail lights. It was the first mass-produced vehicle to apply OLED lighting technology, and this technology has been subsequently applied to the tail lights of many manufacturers' concept cars. The question now is how much interest automotive OEMs and Tier 1 suppliers will have in this technology.

Osram expects OLED to play an important role in automotive lighting.

To enter traditional but stable-demand lighting markets such as commercial lighting and office lighting, OLED technology needs to integrate enough differentiated niche markets or "guiding" markets to achieve economies of scale and thus reduce costs. In these areas, OLED technology manufacturers have conducted in-depth research on some lighting applications, such as medical lighting and embedded lighting.

OLED technology is also being applied in lighting, with many companies actively investing in the R&D and industrialization of OLED lighting panels. The OLED lighting panel market is estimated to have reached nearly USD 30 million in 2015 and is expected to grow to approximately USD 1.5 billion by 2021. Despite many difficulties, the development of the general lighting market will drive growth in the OLED lighting market.

OLED lighting manufacturers are not only facing many technical challenges, but also a sluggish market demand for OLED lighting products. Many manufacturers have begun to adjust their OLED lighting product plans. Some manufacturers have already decided to exit the OLED lighting market. For example, Philips Lighting has sold its OLED-related assets, and Panasonic has also announced its withdrawal from the OLED lighting market. However, most of the recent industrial restructuring and repositioning is related to mergers and acquisitions, such as: the American company OLED Works acquired the OLED-related assets under Philips Lighting, and LG Display acquired and merged with the OLED lighting division of LG Chem. Some other companies are also undergoing, or expected to undergo, M&A restructuring in the coming years.

Some companies have decided to focus part of their OLED product plans on automotive lighting, such as Osram mentioned above, or to focus on some niche lighting applications that enable OLED to benefit from higher added value compared with LED or other light sources, such as Alkilu, Polyphotonix, and Takahata.

Recent M&A and Exits in the OLED Lighting Industry

Startups and small companies are also facing a depressed market environment due to investment drought. Therefore, companies developing innovative materials and processes are seeking well-funded industrial partners to commercialize their products through collaborative R&D. From another perspective, this trend is also an opportunity for industrial giants facing technical challenges. In fact, these industrial giants are very interested in cooperating with these companies that bring "scarce technologies" in order to accelerate their product development. In this context, partnerships that tackle technical barriers together and create OLED lighting market opportunities are more important than ever.

Finally, it is also worth noting that in recent years some new companies have entered the OLED lighting industry. Most of the companies newly entering the OLED field have set their strategic goals toward OLED display applications. Other companies that may possess OLED lighting technology but have not yet entered this industry are waiting for an opportunity when market demand in this field explodes. Currently, Osram, GE, Visionox, Nanjing First Organic Lighting, and BOE are among those participating in OLED lighting application research.

Recent Developments in the OLED Industry

OLED lighting products can be mass-produced

Efficient solutions still need to be actively explored

OLED lighting manufacturers are currently facing a "chicken and egg" dilemma: cost/price reductions can only be achieved through mass production, yet the high production cost of OLED lighting panels is precisely the barrier to entering the mass market. The solutions currently under exploration mainly include: (1) Enhancing synergy with OLED display technology to obtain an optimized supply chain, jointly conducting product R&D, and effectively utilizing OLED display production equipment. (2) Focusing R&D on innovative technologies that can rapidly reduce costs and improve performance.

In 2015, OLED lighting technology developed rapidly, with the successful development of higher-performance materials, such as blue phosphor exciters; innovations in substrate and light-extraction technology improved light-extraction efficiency; and driving also saw significant improvements. Breakthrough technologies that can reduce production costs and/or bring greater design freedom for OLED lighting are now approaching the commercialization stage: Konica Minolta built a Roll-to-Roll (R2R) process production plant during 2014/2015, LG Display began commercializing its flexible OLED lighting panels in 2015, and Sumitomo Chemical recently began supplying small quantities of its polymer-printed OLED lighting panels.

Relationship diagram of flexible devices and OLED lighting devices

Regarding flexible OLED, a potential killer OLED lighting product, LG Display started commercialization in 2015. However, cost-effective moisture barrier technology solutions, such as substrate/encapsulation grades, remain a key challenge for advanced OLED development. In fact, flexible OLED can be processed on different substrates, each with its own pros and cons—for example, metal foil offers good barrier properties but is opaque; ultra-thin glass is transparent and offers excellent barrier properties but is relatively fragile; plastic substrates are transparent and flexible but require good barrier solutions.

Therefore, to avoid reliability and lifetime issues with OLED device packaging, barrier solutions often need to be specially customized. In 2016, the market still had no mainstream solution, and many companies were each developing their own barrier solutions.

Equally important and worth highlighting is the additional advantage of using flexible substrates in Roll-to-Roll processes, solution-processable materials and solution-based technologies such as slot-die coating or inkjet technology, which have the potential to reduce OLED production costs.

These issues, advances and innovations are driving OLED lighting to become, step by step, an efficient lighting solution for the present and the future.

The biggest difference between OLED Lighting and existing LED lighting is its planar light emission characteristic. Compared with the point light source emission method of LEDs, OLED Lighting does not require additional components such as light guide plates, making it relatively simple. Given good material luminous efficiency, OLED Lighting operates at a temperature close to human body temperature when lit, and is not easily scalded upon contact. Its spectrum closely resembles sunlight without being harsh to the eyes, making it suitable for the household market, museums, and other settings with strict control over light sources.

The surface light emission characteristics of OLED Lighting can be applied to Flexible substrates, forming foldable and bendable appearances, which will enhance greater design flexibility and artistic expression in lighting installation settings. Being bendable and having non-fragile characteristics will enable lighting products and application technologies to innovate and surpass existing imagination. Furthermore, according to the estimate of Professor Junji Kido of the Research Institute of Science and Engineering at Yamagata University in Japan, the use of OLED lighting is expected to reduce CO2 emissions by 6.7 million tons, approximately 2.3%, by 2020.

This article is referenced from MEMS Consulting and compiled by China Light Network.