The changing landscape of the display industry
The display market today is worth $120bn, primarily driven by smartphones and TVs. Over the next few years, annual display production will reach around a quarter of a million square metres, with most additional LCD capacity coming from the construction of new ‘Generation 10.5’ display fabs.
These huge factories are expected to cause significant oversupply and squeeze margins as display prices drop. Paul Cain, Strategy Director at FlexEnable, discusses how older Gen 7 and 8 fabs must move away from manufacturing the same specifications as Gen 10.5 fabs, and instead focus on new markets using their existing display technology, or converting to manufacture differentiated display types, in order to compete.
People of a certain age will remember the days when televisions were an enormous box occupying a corner of the room, so heavy that it took several people to lift them. Technology has come a long way since then, and today’s TVs are slimline and light enough to hang on the wall thanks to the development of flat panel displays.
The flat panel display industry started in earnest in the 1990s, when this type of display technology began to appear in office monitors and, soon after, in homes. In the years since, it has enjoyed massive growth, and today the overall display market is valued at around 120 billion dollars worldwide, largely driven by consumer demand for smartphones and TVs.
However, while there has been continued growth in volume and supply during this period, this has been accompanied by a rapid fall in pricing. In 1997, a flat panel TV cost in the region of $30 per square inch of screen; today, this has fallen to around $2 for a top-of-the-range TV. The challenge for the industry now is differentiation, to produce innovative displays that consumers want, and competitors cannot offer.
The choice of display technology varies depending on the application, but most people will be aware of organic light-emitting diodes (OLED) and liquid crystal displays (LCD). These consist of a frontplane – the OLED or LCD component – and a backplane, an array of millions of thin-film transistors that switch the individual display pixels on and off.
The display attributes – the colour performance, contrast and pixel size – are determined by the frontplane and backplane combination selected. Currently, there is a great deal of interest in further enhancing colour performance, as existing displays cannot produce all the colours that occur in nature. New technologies – quantum dots and MicroLED – offer alternative avenues to explore, potentially enabling the development of displays that can produce every colour visible to the naked eye.
A need for flexibility in the display industry
It is now more than two decades since LCD technology became widely adopted, and it still dominates the market, accounting for over 90% of screens sold today; TVs and monitors, notebooks, laptop and tablet screens, almost all rely on LCD technology. However, despite evolving over time, becoming thinner and lighter, expanding to larger sizes and offering considerably improved screen performance – including resolution, colour, contrast, brightness and refresh rate – their rigid glass-based construction puts design constraints on many new applications and products.
Until recently, the only conformable alternative was flexible OLED, now commonly used in flagship smartphones and watches, which offers curves with a radius of a few millimetres. But technology does not stand still, and display manufacturers have continued to innovate, striving to develop new types of frontplanes and backplanes, such as organic LCDs (OLCDs).
OLCDs open up a whole new dimension of design freedom to the wider display market. Based on the same tried-and-tested principles as glass/silicon-based LCDs, they use carbon-based rather than amorphous silicon transistors, and can be produced at much lower temperatures, allowing flexible plastic substrates to be used.
The resulting OLCDs are ultra thin, lightweight and shatterproof, and can be cut and shaped onto concave or convex surfaces, giving rise to many potential applications. Some will be new innovations, while others may involve replacing displays in existing markets with thinner, lighter or bezel-free alternatives, for example, for notebook, laptop and tablet screens.
In the aircraft industry, replacing a glass in-flight entertainment system with a plastic OLCD would significantly reduce its weight; over a typical seven-year lifetime, this could equate to a fuel cost reduction in the region of $400 per seat.
Increased manufacturing capacity
In parallel with the industry’s ongoing innovation, there is a huge increase in capacity underway in China, where a whole new generation of display factories – ‘Generation 10.5’ display fabs – are under construction.
These enormous facilities, costing between $6 and $7bn each, are designed to enable displays to be manufactured from 10m2 glass sheets, which are much larger than those used by the earlier Gen 7 and 8 fabs. The size of these glass sheets means that they do not fit into shipping containers, and so a glass factory must be built adjacent to the fab.
The benefit of the Gen 10.5 fabs is that they enable larger TV screens, monitors and digital signs to be produced, and at a lower cost due to economies of scale. However, with each of these factories able to produce around 10 million square metres of display per year – the equivalent several million large TVs, and five percent of the 200 million square metres of display a year currently manufactured by the industry as a whole – this expansion will have a tremendous effect on capacity.
As more and more Gen 10.5 fabs come on line, there is expected to be a significant oversupply, resulting in squeezed margins as TV prices are cut. It will become increasingly difficult for the earlier generation fabs to compete in a given segment if they are making exactly the same display as the newer lines.
Repurposing existing display fabs in the display industry
Ironically, the Gen 7 and 8 fabs that now have a questionable future were responsible for causing similar difficulties for the Gen 4 and 5 fabs, which were either sold or repurposed. Some of those still in operation today have moved away from manufacturing consumer LCDs to focus on higher margin applications, such as automotive, industrial and flexible displays, X-ray sensor backplanes and other types of large area sensor arrays.
Gen 7 and 8 fabs now face the same challenges and need to differentiate and innovate to compete with the incoming Gen 10.5 factories.
While flexible OLED displays have a proven track record of use in smartphones and smart watches, the technology is very difficult to transfer to larger display types, such as notebooks, monitors and TVs. The opening of Gen 10.5 fabs has created a need to reassess the use of existing manufacturing lines, and plastic OLCD presents a logical option for repurposing these facilities.
This complementary technology is ideal for applications that require a conformable, glass-free display, and has been designed not only to create new market opportunities and sales avenues for display makers, but also to fit into existing older factories with minimal capital expenditure.
Making the leap from glass to plastic
There are many fabs in Asia that are fully depreciated and have reached the end of their lifetime in terms of their original planned use. These factories are ideal for repurposing to accommodate OLCD manufacturing processes, taking advantage of the existing supply chain to revitalise the facility.
The low-cost plastic film used to make OLCDs is attached to glass sheets, allowing the raw materials to be handled with the existing robotic platforms used in traditional LCD production processes: the implementation cost is almost zero as there is no need to procure specialist equipment.
OLCD production is also far more energy efficient compared with silicon-based glass displays, due to the low temperatures used throughout the manufacturing process – entire displays can be built without exceeding 100 °C – offering environmental as well as cost benefits. As a result of the low-cost of this manufacturing approach and the materials used, OLCD is the most inexpensive flexible display technology.
OLCD technology represents a major step forward for the display industry, and repurposing older generation fabs has great potential for mass production. While the first OLCDs in production will be small- and medium-sized, the same approach can be applied to Gen 7 and 8 lines for TVs, digital signage and monitors, for the first time enabling both large and small displays to be manufactured on plastic.
This will open the door to many possible applications for OLCDs, ensuring a bright future for this innovative technology.