Lighting market will adopt more OLEDs – ‘subject to conditions’

09 Mar 2016

Market analysis by Yole Développement says significant challenges remain to this promising technology.

A new market report and forecast on the potential of OLED technology to increase its share of the lighting market concludes that despite its projected $1.5 bn business opportunity by 2021, the future of OLED lighting “remains uncertain”.

“OLED technology has a potential for innovative lightweight, very thin, even flexible and transparent lighting sources,” explains Pars Mukish, Business Unit Manager, LED/OLED and sapphire activities at market analyst Yole Développement (Yole).

However, converting this potential into sales is “not quite that simple,” Mukish adds. “The multiplicity of OLED technologies makes the optimal selection difficult and many challenges facing this technology include relatively high manufacturing costs and a still non-structured supply chain, which must be overcome if the technology is to reach its full potential.”

The market report sates, “For a long time, OLEDs have been living in the shadow of the LEDs revolution and today, the OLEDs market is still 100 times smaller than the established LEDs sector. Under its new report entitled OLED for lighting – Technology, Industry and Market Trends, Yole announces OLEDs will have a US$ 1.5 billion market value by 2021.

In the report, Yole’s analysts propose a detailed description of current technologies, applications and future trends. Including an overview of the OLEDs structures and materials, a high added-value value analysis of the industry landscape and the evolution of its supply chain, the report also reviews the manufacturing aspects including roadmaps, R&D activities and costs. Since its first edition published in 2014, Yole says it has acquired “further important knowledge in the OLED sector”.

Key observations

Competition OLED revenues today are mainly driven by display applications; especially smartphones. But the OLED industry has also been trying to target lighting applications for several years, based on the technology specifics in terms of design or form factor and efficiency. In this new battleground, OLEDs are competing with LED technology, which has already paved the way with a revolution in solid state lighting, drawing attention away from OLED over the past 10 years.

Cost Added to that, the high cost of OLED technology is not making market penetration easier; the technology’s current low efficacy is slowing adoption and the advantages claimed by OLED lighting companies are not necessarily perceived by the customers. OLEDs will therefore have to find niche or “spark” markets to develop production scale momentum and create a marketing window allowing them to demonstrate the advantages and possibilities of the technology to customers.

Automotive Dr Milan Rosina, Senior Technology & Market Analyst at Yole, commented, “Automotive lighting could represent one of the first ‘spark’ markets for OLED lighting technology. Indeed, with the recent integration of LED technology, lighting has evolved from a basic, functional feature to a distinctive feature with a high value potential in automotive.”

Therefore, says Yole, OLEDs are demonstrating “real potential to differentiate themselves from LEDs and offer new added-value potential". The analyst cites the following recent developments as clear confirmation of the evolution of the OLED market:

• In January 2013, the German-based company Hella, through an OLED project called “So-Light” Fraunhofer-Institut für Elektronenstrahl- und Plasmatechnik, has collaborated with Fraunhofer FEP to develop an OLED rear lamp prototype.
• Mid-2014, the OLED project So-Light successfully concluded. In March 2014, Hella proposed rear lamps with mixed technologies bent and curved OLED. This project was a collaboration between Hella, LG Display and the car manufacturer BMW. The BMW M4 GTS, commercialized in 2016, is the first commercial car to adopt OLED technology in rear lamps. “It is now a question of understanding what level of interest the technology will generate from automotive OEMs/Tier-1s,” comments Dr Rosina.”

Yole adds, “To access traditional general lighting segments including commercial lighting and office lighting applications, OLED technology will have to combine enough different niche or “spark” markets to achieve the economies of scale that will allow for a decrease in cost. In this field, several niche lighting applications are being investigated by the OLED lighting industry: medical lighting and embedded lighting among them.

Pierrick Boulay, Technology & Market Analyst at Yole, concluded, “The OLED market will grow to nearly $1.5 billion by 2021. Although they are more difficult to access, general lighting markets could drive this growth, provided that enough niche markets are identified to create a minimum production scale; the industry can allow for further price reductions in OLED lighting panels and systems; and the advantages of OLEDs, as claimed by the developers, are actually demonstrated to the customers."

About the Author

Matthew Peach is a contributing editor to optics.org.