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Survival by innovation

17 Jun 2002

Cambridge University's first spin-off company is pursuing every possible angle to help push flat-panel polymer displays into the consumer electronics market-place. Vanessa Spedding checks out Cambridge Display Technology's survival strategy.

From Opto & Laser Europe March 2002

The companies with the best chances of riding out unpredictable times are the ones that can adapt effortlessly. And few things metamorphose more easily than ideas. This is why a good intellectual property portfolio is important - and businesses like Cambridge Displays Technology (CDT) in the UK are looking good.

CDT is well known for the light-emitting-polymer (LEP) technology patented by its founders more than a decade ago. Also known as polymeric organic light-emitting diodes (polyOLEDs), these polyfluorene-based molecules that emit light in response to an electric potential catalysed Cambridge University's first spin-off in 1992. CDT was set up to commercialize applications within the displays market and has since grown to a firm of more than 100 people with a robust (although undisclosed) turnover.

CDT might now appear to be at the point where many companies consolidate and relax, but nothing could be further from its plans. True, some of its first licensing deals are about to come to fruition, bringing healthy royalties-based revenue streams from Netherlands-based Philips and Germany's Osram. True, it is cash rich. Even aside from investments from venture capitalists and more recently DuPont in the US, CDT is in the black. However, its primary patent expires in 2010 and others will follow in 2014. CDT must continue to innovate or the industry will circumvent it.CDT, however, is well prepared. It has taken the shrewd decision to amass new intellectual property relating to every aspect of the technology - including the manufacturing process - along the way, which means that it is likely to dominate the LEP-displays landscape for some time without having to run a full-scale production line. David Fyfe, the firm's chief executive, explained how they moved forward from materials research:

"It is a process technology - ink-jet printing - that is the defining method that gives us our advantage," he said. "It differentiates us from the small-molecule approach. Toshiba [Japan], for example, has declared that it is switching to polymer technology because this approach is more readily made into a manufacturing process than small-molecule technology."

The realization that CDT's LEPs could be ink-jet printed is what inspired the alliance between CDT and Seiko-Epson, Japan, last year. Between them the companies worked out a practical way of implementing the process (Seiko-Epson now has a licence to produce displays). Ink-jet printing gives LEPs an enormous manufacturing advantage over competing materials, such as the small-molecule organic LEDs pioneered by Kodak. The latter are not easily fabricated into display devices. They must be deposited from a vapour onto a hot substrate under vacuum, which requires accurate positioning of the substrate and masks.

LEPs, however, dissolve in organic solvents. This means that they are amenable to room-temperature, liquid-based processes such as spin-coating and ink-jet printing. The latter brings the potential of full-colour pixelation, high resolution and a flexible pixel shape and size.In fact CDT has not stopped with Seiko-Epson. Seeing an alternative ink-jet opportunity in US company Litrex a few months ago, CDT moved swiftly to purchase Litrex. "We did this because Seiko-Epson seems torn between making its ink-jet technology widely available and restricting it," said Fyfe. But Litrex is geared specifically towards the LEP industry, boasting a "pioneering piezomicrodeposition technique". Jeremy Borroughes, CDT's chief technology officer, offered another perspective: "I believe that [Litrex's] approach to ink-jet printing is technically better than Seiko-Epson's - it is more adaptable."

Will Seiko-Epson be offended? Fyfe thinks not, but is pragmatic either way. "We're still in active discussions with Seiko-Epson. The issue for us is how to facilitate the growth of this industry. We need to make it easy for people to get into it, and in the end I don't really care whether they get in with a Seiko-Epson machine or a Litrex machine."

It's clear that CDT has come on since its university lab days. Its new, business-like determination came with the investment from two venture capitalists in 1999, explains Fyfe, admitting that they took the organization from being "an R&D shop to a commercially orientated business". The management team's approach to making money revolves around an ambition to grow the entire polyOLED-displays industry.

This means investing in the development and optimization of all aspects of the technology to enable licensees to pick it up and run with it. Hence CDT's $25m investment in new pilot-line facilities, in Godmanchester, near Cambridge in the UK.

"We have already made displays on this line," said Stewart Hough, vice-president of business development (referring to the spin-coating method). "We're now engaging in the next phase of the plan - to provide process-development services as part of joint development agreements with our licensees." Ink-jet facilities will be online by the second half of the year and prototype full-colour displays will ensue.

Not only is CDT undertaking process-development work, it is also looking at the semiconductor circuitry that drives each pixel. "The effect of the performance of the electronics on the performance of the display is largely underestimated within the industry," explained Hough. So CDT has got together with Franco-Italian giant STMicroelectronics in another deal to jointly develop the display drivers. It is also delegating some of the materials development to chemical companies like Dow in the US and Sumitomo in Japan, to which it has licensed some of its IP in joint-development deals, and is talking with "major firms" geared to developing roll-to-roll manufacture (a potential benefit of the LEPs' amenability to flexible-substrate processes). All of this is on top of recent licensing deals with DuPont and Taiwan-based Delta.

"The potential impact of these polymers is great," said Hough. "If it were left to one or two companies then dissemination would be impeded. The key position for CDT is to offer an open solution - our business opportunity lies in whatever it takes to speed our licensees' time to manufacture."There are a few challenges remaining for CDT: increasing the lifetime of its blue polymer (still at 3000 h compared with more than 40 000 h for red and 20 000-30 000 h for green), is one, although the firm is confident about the prospects for improvement. It also has in place an interim "mitigation" solution. This entails running the blue polymer at a lower brightness per unit area but making it into a bigger pixel at the expense of the size of the green: halving the brightness of the blue polymer doubles its lifetime.

In any case CDT seems to relish a challenge. Future plans include exploring the reverse behaviour of its LEPs - putting light in to get electricity out. There are deals afoot geared towards future exploitation of the material's photovoltaic potential and the project has just secured initial-phase funding from the UK government. Watch out for the metamorphosis of CDT.

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