June 6, 2013…IDTechEx Research, predicts that OLED lighting will probably remain a small niche market over the next ten years. IDTechEx Research says in its “most likely” scenario that OLED lighting will become a $1.3 billion market in 2023 – equating to 1.3% of the market size of LED lighting at that time. IDTechEx predicts that OLED lighting will likely struggle to define and communicate its unique selling points and may remain an over-priced and under-performing option compared to LED lighting, unless Apple-like design innovation occurs. IDTechEx asserts that OLED lighting companies will inevitably have to capitalize on superior design features to carve out niche markets in the hospitality, shopping and architectural sectors. The company contends that profits for panel makers will be squeezed due to stiff competition. IDTechEx predicts that the demand will migrate downstream to the OLED fixture and luminaire designers who will be the demand creators. Therefore, according to IDTechEx, the market for OLED lighting will depend upon how well OLED lighting fixture designers do their job in differentiating their product from LED products on the market.
The company notes that while OLED displays are growing in popularity, especially in the mobile device market, their lighting counterparts are still actively trying to define their unique selling points vas. LED lighting. Also, OLEDs lag behind in terms of efficiency which is in the range of 20-50lm/W. Whereas LEDs regularly offer 90-100 lm/W at package level (the LED chip encapsulated) efficiency. Also, the lifetime of LEDs far exceed that of OLEDs. Indeed, LED lamps regularly offer in excess of 50,000 hours, which is why they initially found a niche market in out-of-reach outdoor applications. Currently, OLED lighting offers a mere 5,000 to 15,000 hours of operational life even when encapsulated.
The company points out that LED lighting is also now low cost, selling at $5/klm at package level (luminaires costs $20-$100/klm). Contrast this with the exorbitant price of OLED today. They cost $300-$500/klm at panel level, excluding the cost of fixture design, retail, installation and profit margins. The main cost drivers are the encapsulation layer (barrier, adhesive and desiccant) and integrated substrates (transparent conductive layer, substrate and out-coupling layer).
IDTechEx notes that in the current configuration, cavity glass is usually used as the barrier. This is expensive first, because additional processing is required (sand blasting) to carve out a cavity, and secondly because large glass manufacturers are reluctant to commit production capacity given the low demand. The company says that a change in system configuration from cavity to frit glass and then from frit glass to thin film encapsulation is needed to drive the cost down. Today, encapsulation layers (including desiccant and adhesive) cost $400-$500/m2.
In OLEDs, IDTechEx says that the integrated substrate is also a substantial cost driver. The integrated substrate includes the substrate (glass), transparent conductive layer (mostly ITO), metal electrodes, planarization (all patterned by photolithography/etch) and external light extraction film. The entire stack today costs $800-$900/m2 currently, but the company says that this can be driven down to $100-$120/m2 in 2023. Innovation is taking place here with the advent of printing, grid materials, etc.
OLED lighting offers high potential for large-area emission, although today OLED production takes place on Gen-2 substrates only. Similarly, OLED lighting offers good form factors, although today most OLED lighting applications are made on rigid glass.
While the LED lighting market is much more mature, IDTechEx notes that recently many companies have become pursued OLED lighting. The company predicts that active materials used in OLED lighting will experience a fast cost reduction rate because of the OLED display industry and also because costs will scale with volume.
IDTechEx asserts that this is different from the other two layers since the demand is mostly driven by factors outside the OLED lighting space. Whereas active materials currently cost $350-$400/m2, IDTechEx expects this to fall to $70-$90/m2 in 2023. The company says that fixture design can help differentiate the OLED market. However, LEDs with the right optics can achieve surface emission that has a similar appearance to OLEDs.
For all of these reasons, IDTechEx says OLED lighting will likely remain a relatively small part of the lighting market.