Oled Lighting Trends And Opportunities

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NanoMarkets

OLED Lighting Trends and OpportunitiesA Webinar for the FlexTech Alliance

August 2, 2011

© 2011NanoMarkets, LC


NanoMarkets

About NanoMarkets LC

• NanoMarkets provides industry analysis of emerging markets in energy and electronics enabled by new developments in materials science. We have been covering OLED lighting markets for five years and provide coverage of both materials and the OLED panels and luminaires themselves

• Our work includes market, company and technology analysis, market forecasting and due diligence. NanoMarkets provides an updated forecast for the OLED lighting market every nine months.

• Offerings include reports, custom consulting, seminars/webinars and in-house training. NanoMarkets is based in U.S., with extensive contacts all over the world

© 2011, NanoMarkets, LC

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NanoMarkets

NanoMarkets’ Recent OLED Lighting Reports

• OLED Lighting Products and Market Strategies (3/10)

• OLED Lighting Materials Market: Trends and Impact (10/10)

• Transparent Conductors in the OLED Industry: 2011 and Beyond (11/10)

• The Business Case for OLED Lighting (12/10)

• OLED Lighting in Asia (4/11)

• OLED Lighting in Europe (5/11)

• OLED Lighting Global Market Forecasts (5/11)

• Markets for OLED Materials (6/11)

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NanoMarkets

Some Forecasts for Total OLED Lighting Revenues

• NanoMarkets (U.S): $4.8 billion by 2016

• Analysis Atelier Corp (Japan): $7.5 billion by 2015 (NanoMarkets $2.6 billion). Large sales outside of Asia, Europe and the U.S. Personal illumination devices

• Lux Research (U.S.): $58 million by 2020. High costs keep OLED lighting luxury items

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NanoMarkets

Questions Answered in Today’s Presentation

• What is it reasonable to believe about the future of OLED lighting?

• Where can OLEDs find competitive advantage in the lighting market?

• What segments of the lighting market can they compete in?

• Two plausible low-end market scenarios for OLED lighting:

– Scenario one: The worst that can happen

– Scenario two: How far can niche markets take OLED lighting

• How can OLED lighting replace “light bulbs”?

• OLED lighting market as mass market: Some market forecasts


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NanoMarkets

Where are we now?. . . a sanity check

• Many developments in last two years

• As many as 40 companies including majors (GE, Samsung, LG, Mitsubishi, Philips, Osram, etc., etc., etc.) involved

• Designer kits available for more than two years

• A few dozen luxury luminaires (often from European designers) are available from high end retailers or have been built for custom applications.

• Luminaires are now thousands of dollars not tens of thousands

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NanoMarkets

Selected European OLED Lighting Design Projects and ProductsProduct Designer Comments

Airabesc Osram Contains 11 Orbeos rectangle panels and six LEDs. The lamp comes in black, white or

polished aluminum

Aston Martin

Showroom

Jason Bruges Large OLED lighting installation to show off latest Aston Martin car. Uses Philips OLED

panels

Cluster + Benwirth Licht Combines both LEDs and OLEDs. The OLED panels are the Orbeos panels sourced from

Osram. Won the Design Plus Aware in 2010 and the 'Best of Best' Interior Innovation

Aware 2011.

Double C-Future Ingo Maurer High-tech pendent lamp featuring nine suspended Orbeos OLED panels

Early Future Ingo Maurer The very first OLED luminaire; a table lamp resembling a tiny tree with OLED leaves

Edge Amanda Levete Collaboration with Philips using Lumiblade. It is manufactured by Establish & Sons and

sells for €2,200

Flat Lamp Tom Dixon Collaboration with Philips in the form of minimalist OLED lamps

Jumping Flash Novaled Transparent OLED lamp design, called the "Jumping Flash". This uses five transparent

white OLED panels (10x10cm each), with the entire lamp being expandable like a

accordion

Lamped D Signed (Irena Kilibard) Uses OLED panels from Fraunhofer and has been shown at a London design festival

Mimosa Jason Bruges Light sculpture using Philips panels which showed at the SuperStudio in Milan

PirOLED Osram This luminaire costs €9,800 and again uses both LED and OLED lighting; in this case it has

five Orbeos panels and five LED lamps.

Samothrace Blackbody Battery-operated OLED Blackbody available in a "limited edition"

O'Leaf Developed by Philips

with Modular Lighting

Instruments

Can be a table or wall lamp and sells for €1,200 to €1,400

"You Fade to

Light"

rAndom International Light sculpture using more than 900 of Philips' Lumiblade panels. A limited edition of this

installation is commercially available

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http://www.oled-info.com/osram-extends-orbeos-family-two-new-oled-panels


NanoMarkets

Regulation: Market Boosts and Distortions• Phasing out: EU will have phased out incandescent bulbs by 2012, with

halogens gone by 2016. U.S. says lighting must be 25-30 percent more efficient than today’s bulbs beginning in 2012. More draconian U.S. requirements expected for 2020

• Doesn’t impact early OLED lighting introduction. Luxury lights not deployed because of regulations

• Early market maturity. Government regulations accelerate the market opportunity, but also market maturity and saturation. This must be taken into consideration in corporate strategies. Even on optimistic scenarios, saturation of general lighting market begins to impact the market by 2014

• Perverse economics. California utilities have chosen to meet regulatory mandates by heavily subsidizing CFLs to a point where they are almost as inexpensive as incandescent lighting. So a lot of CFL bulbs are being bought in California and sold in other states


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NanoMarkets

Business Challenges for OLED Lighting

• Immature technology with no settled manufacturing approach or customer awareness. Unusual form factor makes comparisons difficult

• OLEDs significantly lag the competition. Past improvements have been swift. But how far can we go? Efficacies above 100 lm/W?

• Costs per kilolumen are now so high as to rule out useful comparisons on a total cost of ownership basis

• LEDs can directly capitalize on standard semiconductor industry processes. Can printing R2R processes deliver lower costs?

• Light output (i.e., luminance) needs to be higher to achieve significant market penetration in general lighting and backlighting sectors

• No clear product strategy to make OLED lighting into plug and play replacement for conventional lighting

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NanoMarkets

OLED Lighting and the Economy

• Positive: Energy prices. Energy prices rising again and are likely to continue to rise in real terms as the Indian and Chinese economies grow.

• Negative: Lack of investment money. Large lighting/electronics firms are investing in OLED lighting, but better times might have seen more VCs. Future inflationary conditions could hurt investment once again.

• Negative: Slump in new construction. The construction market in the U.S. and Europe is improving only slowly at best. Boom in China is ending. Lighting expenditures are strongly tied to construction activity


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NanoMarkets

Unique Value-Added Features of OLED LightingOLED lighting special

feature

Short-term Impact Long-Term Impact

Form factor Large-area panel

format and thinness

Ability to replace

existing recessed

lighting panels with

more even lighting and

no need for recessing

Larger panels than can be achieved

now with more total light output.

Eventually, there is the possibility

of very large light panels that cover

an entire wall of ceiling.

Conformability Flexible Novel designs for

chandeliers and table

lamps

Conformal panels for large area

coverage, mobile/rollable lighting

of various kinds. Also lighting

flexible signage and packaging

Transparency OLEDs are potentially

transparent

Novel designs for

lighting

Smart windows and window

treatments

Tunability Color tunable. This

capability is shared

with ILEDs and

Could be used for

adjustable mood

lighting

Could also be used in smart

windows and window treatments



NanoMarkets

Business Cases for Flexible OLED Lighting ProductsProduct Business Case

Residential lighting Flexibility may play the role of more effectively creating new aesthetics or better creating

the mood lighting effect. This is an area waiting to be explored by lighting and interior

designers.

Large lighting panels OLED lighting is uniquely capable of providing large lighting panels that could cover an

entire wall or ceiling. As the size of OLED panels increase they will have to be mounted on

surfaces that are not entirely flat which will provide good reasons for OLED lighting panels

to be flexible or conformal. This need would be enhanced if OLEDs were used on outdoor

surfaces, but this is also not yet possible

Integrated lighting Incorporating lighting into both curtains and clothing is not well developed. Such products

have used collections of ILED lights stitched to fabric. OLEDs would be a good substitute.

Business cases for OLED lighting for fabrics can be based on aesthetics and fashion, but

there will also be practical advantages such as visibility of people who work or travel in

dark areas.

Extended light strips These can be used to provide low levels of light to guide people in darkened area such as

movie houses. They currently exist and use small fluorescent lights or ILEDs. OLEDs

might make an attractive replacement for these technologies.

Brand enhancement

and packaging

products

Not a road much travelled, but we believe that if costs for OLED lighting are reduced

sufficiently (perhaps using printing), it could be added to smart packaging either for brand

enhancement or more practical applications such as indicating package tampering or (for

pharma packaging) amounts of pills used.



NanoMarkets

Comparison of Light Source ParametersFluorescent ILED OLED

Efficacy 80-100 lm/W 80-130 White Currently 25-60 lm/W but could rise to over 100

lm/W.

Wattage CFL 15 W

Linear fluorescent 95W

1.1W Packaged white LED

10.5 W LED lamp

Presumably wattages of OLED luminaires will

emerge in the 5W to 15 W range

Luminous Output CFL 950 lm

Linear fluorescent 2,900 lm

85 to 140 lm Packaged white

LED. 650 lm LED lamp

Current standard for OLED panels is 3,000 lm/m².

To expand to 10,000 lm/m² by 2015. (DOE)

CRI 80-85 80 –white

90 warm white

95 has been achieved at 40 lm/W. OLED materials

promise some competitive advantages in this area

Glare Mediocre N/A Potentially excellent

Cost of

manufacturing

Low because of high volumes Low because of high volumes Potentially very low through the use of R2R and

printing processes

Total cost of

ownership

Mediocre but better than

incandescent

At present somewhat better

than a CFL

Potentially excellent

Environmental/

Safety

Dubious because of mercury Burns very hot, otherwise good Potentially excellent

Form Factor Gas filled tube (traditional or

compact)

Chip – high intensity point light

source

Large area ultra-thin panel

Lifetime (LT70)

(khours)

8 50-60 5-20 at present. Big improvements expected; 30-

50 expected in the next few years. 100 is possible

Dimmable Yes, with special dimmers but

efficiency degrades

Yes and efficiency increases

when dimmed

Yes and efficiency increases when dimmed

Color tunable No Yes Yes

Flexible No Limited Inherently flexible

Noise Yes No No

Switching lifetime Poor Excellent Excellent


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NanoMarkets

OLED Lighting: Markets and TimetablesMarket/Niche Business Case Challenges Timing

Luxury lighting Capitalize on existing channels and

wealthy consumers. Price not

major factor. Product types

established

There is only so much that

can be done with small rigid

OLED panels

Some products now, but take-off

likely in 2011 and beyond

Mood lighting Fits well with the panel format/low-

luminance of OLEDs. Flexibility and

tunability also important

Cost, achieving flexibility,

and establishing marketing

channels for new product

Expect to see product

development in the 2012 and

beyond timeframe

Office and factory

lighting

Offers a replacement for

fluorescent lighting with smoother,

higher quality light and improved

aesthetics

Luminance, energy

efficiency and panel size

Higher luminance and larger

panels than can now be

achieved. Perhaps not until 2014

or 2015

Architectural

Lighting

Likely to include premium products

and large panels

The need for large panels is

a major challenge

Some projects soon. Significant

market evolution beyond 2012

Smart Windows

and Textiles

Novel products, such as windows

that are lights at night, may offer

cost savings and aesthetic

advantages

Transparency , flexibility and

integration technology.

Marketing for novel

products may be hard

Not a focus of any firm at

present. Could emerge beyond

2015

Automotive

lighting

Replacement of existing EL

technology in dash with higher

luminance products. Mood lighting

for cars

Automotive industry is cost

sensitive with regard to

components

Several firms working in this

space now, but first products not

likely to emerge until 2012 or so


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NanoMarkets

Other OLED Lighting Markets

• “Designer kits.” Osram, Philips and Lumiotec currently offer. Attempt to create market. Not a product in itself

• Signage. Mainly EL replacement for emergency lights, etc. Some products available already. OLEDs not the best choice for outdoor signage

• Backlights. Mainly alternative for simple backlights for watches, segmented displays, etc. Replacement of backlighting for AM LCD displays seems unlikely, although widely talked about at one point

• Packaging, toys and novelties. Includes everything from high-value (pharmaceutical or perfume) packaging to Christmas ornaments

• Outdoor lighting and signage. Main challenge is encapsulation

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NanoMarkets

Key Forecast/Scenario Assumptions

• Regulation. Regulations phasing out incandescent bulbs will open up markets for OLED and LED penetration. Note: There are still some uncertainties about how fast regulations will actually be implemented

• Addressable markets. Lighting unit shipments will decline as SSL deployment raises average lifetimes. So OLED lighting business cases must be built around a declining addressable market.

• Pricing. Most uncertain part of the forecast is pricing. Even the basis for OLED lighting pricing is uncertain. It is hard to compare with conventional and ILEDs, because of panel format. $ per square is not appropriate to other kinds of lights.

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NanoMarkets

0

2,000

4,000

6,000

8,000

10,000

12,000

2011 2012 2013 2014 2015 2016 2017 2018

$ M

illio

ns

Summary of OLED Lighting Market by Application

Other

Signage

Personal ilumination products

Vehicular Lighting

Architectural and specialized industrial lightingGeneral illumination

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NanoMarkets

Pricing Issues and Strategies

• OLED lighting is further behind other kinds of lighting in terms of pricing than any other parameter.

• Fluorescent lights are just $2-4 per kilolumen and LEDs are about $130 per kilolumen. But OLEDs are around $300 per kilolumen (DOE numbers)

• Major improvement expected and DOE says $8-9 for OLEDs by 2015. This assumes a lot about processes, materials and economies of scale, but would make OLEDs competitive for premium general lighting products

• In NanoMarkets’ forecasts we assume that something like the DOE pricing scenario can be achieved. Some observers believe that OLEDs will be able to do better than this

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NanoMarkets

Company Product Pricing

Add-Vision Direct materials cost based on Add-

Vision's semi-proprietary materials and

processes

Cost of emissive areas of $0.24 per square inch,

and just $0.08 for non-emissive areas

Kaneka Kaneka will offer OLED square panels

in five colors (warm white, red,

orange, blue and green)

Said to cost around ¥2 million (approx. $24,000)

per square meter—and the company believes that

the price will drop to ¥200,000 ($2,400) in 2012 and

to ¥50,000 ($600) or less by 2020

Lumiotec Designer OLED kits "Version 2.0" 145 x 145 mm kits are $360.

Modistech Currently selling a 150 x 150-mm white

lighting "film" in Korea.

Modistech has said that its OLED lights will be

available for around $212 per square meter by 2011

Philips Lumiblade designer kit OLED driver and electronics is priced at €70 ($93),

with small pre-shaped OLEDs ranging from €72 to

€248 ($96 to $330)

Osram Orbeos product €250

TechnoCorp Future products Goal is $65 per square meter

OLED100 EU R&D project aims to create OLED

lighting devices with 100-lm/W

efficiency, more than 100,000-hour

lifetime and 100-by-100-cm module

size.

The target cost of these modules is €100/m2

($133/m2) or less

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NanoMarkets

OLED Lighting Scenario I: EL Replacement --The Worst That Can Happen

• The actual worst that could happen would be that OLED lighting never proves viable and disappears as a research program in a few years

• But OLEDs seem to be superior to EL lighting in many applications and also seem suited to luxury lighting; they are getting the attention of designers

• Luxury lighting can never be a big market. A few thousand units at $1,000+ per luminaire and over, puts market in the tens of millions of dollars once developed

• OLEDs could be positioned as next-generation EL. EL lighting is a slow-growing market of around $200-300 million. If OLED lighting gets 70% share it would generate up to $210 million; a lot more than luxury lights

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NanoMarkets

OLED Lighting Scenario II: Mood Lighting --Mass Market

• Mood lighting is the first possible mass for OLED lighting. It’s performance fits market needs and addressable markets are large; potentially many millions of units

• The “proof” is that the luminance of OLED lighting is already close to being suitable for mood lighting and the panel format is also a fit. Flexibility would also be helpful, but not essential

• Addressable markets would expand rapidly as price declines. But there are relatively price insensitive markets (transport, prestige buildings, etc.) that are ready for it now

• Mood lighting markets could reach several hundred million dollars, making OLED lighting a significant opportunity for major lighting, electronics and home products stores

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NanoMarkets

OLED Lighting Scenario III: Breaking Into General Lighting

• LEDs have been made to fit in with existing formats. Consider LED “bulbs” and “tubes.” This will be hard – but not impossible – for OLEDs. OLED lighting is intrinsically panel-like

• Breakthrough will come if OLEDs can be made into panels that can replace fluorescent panels. This probably won’t happen until 2015, when these panels are large enough (maybe 1,600 m²) and bright enough (10,000 lm/m²) to do the job

• Replacing CFLs in residential lighting will require a radical acceptance of total cost of ownership by residential consumers. This will not be easy to achieve, because it is unclear how consumers discount for future cost savings. But light quality might be a compelling advantage for OLED lighting

• Major firms including GE and Philips see mass markets emerging around 2015

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NanoMarkets

NanoMarkets’ OLED General Lighting Forecast($ Millions)

2011 2012 2013 2014 2015 2016 2017

Worldwide consumption

of light bulbs, tubes and

panels (billions)

16.2 15.3 14.4 13.4 12.3 11.2 10.1

Penetration by OLEDs

(%)

0.0005 0.0026 0.0083 0.033 0.12 0.42 1.30

OLED panels shipped

(millions)

0.08 0.4 1.2 4.5 15.2 47.0 131.2

Price per panel ($) 400.0 300.0 207.0 142.8 92.8 58.5 35.7

Market ($ millions) 31.6 120.0 248.4 637.6 1,410.7 2,749.8 4,680.0

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NanoMarkets

The Devils Advocate: How Seriously Should You Take These Forecasts?

• Assumes good technological progress on OLEDs over next few years, along with success of early manufacturing plants. Technological progress has been impressive so far, but we can’t be sure it will continue and OLEDs still lag behind LEDs and CFLs

• Assumes good customer acceptance. This is far from proven as yet. Indeed, most potential customers don’t know that OLED lighting exists or even, in many cases, that incandescent lighting is being phased out

• Ramp up to 2014-2015 mass market take off, could be too optimistic. This could make the years 2013-2015 much lower revenues than we show here. On the other hand, our penetration assumptions are quite modest, so eventual revenues could be significantly larger. The next iteration of the NanoMarkets OLED lighting forecast will take a more granular look at the likely market evolution

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NanoMarkets

Some Conclusions• Significant technical, materials and marketing challenges ahead. Forecasts

rely on economies of scale, R2R manufacturing successes, materials price declines and customer acceptance. They also rely on the kind of OLED lighting products that are likely to emerge

• OLED lighting does not seem likely to compete with CFLs and LEDs on conventional parameters, except color quality in the foreseeable future. Must therefore compete on unique features: panel format, flexibility, tunability and transparency

• The medium-to-long term market opportunity for OLED lighting is contingent on regulations phasing out incandescent bulbs. But this will also lead to early saturation of the market

• At the very least, OLEDs should be able to capture EL alternative market, plus luxury lighting market. Mood lighting market seems likely too. To meet the expectations of large players, OLEDs need to create cost effective panel lighting for general lighting


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NanoMarkets

Lawrence GasmanLawrence Gasman is the Principal Analyst at NanoMarkets and one of its co-founders. He also heads up NanoMarkets’ OLED lighting industry research program.

Mr. Gasman's consulting clients have included multinationals, start-ups and investors and he has advised them on new product introduction, market positioning and strategy, and sales potential. He has also provided due diligence on mergers and acquisitions for his financial clients and serves on the technology advisory board of a major specialty chemicals firm.

Mr. Gasman has also spoken and written widely on the subject of new materials markets. His recent appearances have included talks at Semicon West, 2011Flex, and LED/OLED Lighting Japan. Mr. Gasman's latest book is on the commercialization of nanotechnology for Artech House.

Mr. Gasman was educated at Manchester University, The London School of Economics and London Business School.


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NanoMarkets

Contact

NanoMarkets, LC

[email protected]

www.nanomarkets.net

Phone: 804-360-2967


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Oled Lighting Trends And Opportunities