Key strategies for OLED lighting growth

GLEN ALLEN, USA: The OLED lighting market will demonstrate exponential growth for the first few years of its product cycle, followed by a period of fast growth driven by environmental regulations, before leveling off and reaching about $9.7 billion in 2016, according to a Webinar presented recently by NanoMarkets, LC, Virginia-based industry analyst firm.

In this webinar, NanoMarkets discussed the current state of the OLED lighting industry, how and when OLED lighting will succeed in the marketplace, and key factors shaping this over the next eight years.

OLED lighting emerges
Just a few years ago, OLED lighting was considered a tag-along to the OLED display industry, and thus relied on the investment and R&D aimed at producing OLED displays. As NanoMarkets discusses in its 2009 report, An Opportunity Analysis for OLED Lighting: 2009-2016, things have changed--this is the first year that NanoMarkets sees OLED lighting as a separate industry, one with its own rules and opportunities.

Driving this shift is the fact that the opportunities for OLED displays have not proved as great as OLED advocates had once hoped, and lighting seems to present opportunities that are both simpler technically than displays and where the entrenched technologies (light bulbs, fluorescent tubes) sometimes seem easier to push aside than the entrenched technology in displays, LCD.

The anticipated entry market for OLED lighting has also changed. Previously, many believed that OLED lighting would make its debut in novelty products; today, NanoMarkets sees OLED lighting entering into more sophisticated markets--backlighting and general illumination.

NanoMarkets has divided the backlighting sector into two markets, the low-end and the high-end. The low-end market is really the replacement of EL products, as well as backlighting LCDs that don't currently use backlighting, but could benefit if the price was right (i.e., kitchen appliances).

The high-end market includes backlighting for laptops, PDAs, and cell phones. For OLEDs to infiltrate these applications, they will need improved brightness. According to NanoMarkets, however, this is doable and should be available within the next few years.

To quantify this opportunity, NanoMarkets expects the market for OLED backlighting to reach about $2.1 billion in 2016. The largest portion, 45 percent, of this market will come from backlighting for computers, with televisions representing 20 percent, or about $420 million.

After capturing the low-end backlighting market, OLED lighting will make inroads into the general illumination market, first in designer products where the benefits are clearly defined. One of the challenges to replacing the household bulb with OLED lighting technology is cost and how cost is defined. In other words, OLEDs will never be able to compete with incandescents or CFLs on store cost alone.

Instead, total cost of ownership will take into account the lifetime of the bulb as well as the cost of electricity to run it. Because this is not the way consumers currently think about costs when buying bulbs in, say, Home Depot, OLEDs will begin their life in general illumination in designer type products (where cost is not as much of an issue), and custom lighting for large buildings (where the customer will likely consider total cost of ownership).

NanoMarkets expects revenues for OLED lighting used for general illumination applications to reach about $3.1 billion in 2016. Between 2013 and 2016, these revenues will effectively decrease and increase and then decrease again. This is because fewer bulbs will be bought simply because OLEDs are longer lasting than other bulbs. As a result, NanoMarkets expects the addressable market to fall to about 10 billion units by the end of the forecast period (from essentially zero in 2009).

In summary, NanoMarkets sees OLED lighting as an exciting and growing opportunity for OLED materials producers. The two largest opportunities will be in backlighting and general illumination.

While general illumination will not be the first market that OLED lighting penetrates, it represents the largest one; in this market, OLEDs will not be up against incandescents (because they are being phased out in most regions of the world), or CFLs (as they have many drawbacks and merely represent the only alternative to incandescents right now), but instead HB-LEDs. NanoMarkets expects the lighting competition to eventually revolve around solid-state lighting technologies.