As reported in NanoMarkets’ most recent report on industrial silver, NanoMarkets estimates that the total global market for silver inks and pastes in 2013 will be approximately $7.8 billion, but that it will slowly contract over the next eight years to about $7.5 billion by 2020.
The decline in the overall market is due primarily to two factors (1) the persistently high price of silver, which retards the use of silver inks and pastes in cost-sensitive applications, of which there are quite a few and (2) the decline in the biggest market for silver inks and pastes; photovoltaics.
High Silver Pricing to Persist: Three Strategic Options
In the past, the silver inks and pastes market have frequently had to adjust to brief periods of high silver prices. What seems to be different this time is that high silver prices are likely to persist for a number of years or even go higher.
The average price of silver is now well over $30 per troy ounce, which is more than twice those of just three or four years ago. Given the current propensity of investors to hold silver as a hedge against inflation and uncertainties about GDP and monetary policy, coupled with low interest rates, it seems unlikely that silver prices will come down any time soon.
Thus, both consumers and suppliers of silver inks and pastes are facing a difficult business climate in which there is a new paradigm for their cost calculations. In this environment, NanoMarkets believes that the ink makers have three strategic options.
There is always the default option of exiting the silver inks and pastes altogether, but we don’t see this happening except with a few marginal players. The desperation levels have just not risen to sufficiently high levels for there to be a mass exodus of suppliers from the silver inks and pastes sector; not yet anyway. The other two options available to silver inks/pastes suppliers are:
• Development of (1) silver-free substitutes based on printable copper, aluminum, nickel, and silver-coated metals, or (2) non-printing methods for deposition of circuitry (like electrodeposited and etched copper).
• Development of (1) silver-based products that have lower silver loadings but that maintain high performance, through the development of reformulated pastes with lower silver content, alternative silver powder or flake morphologies, or (2) lower viscosity/higher resolution silver inks designed for ink-jet, flexographic, gravure, and other printing processes.
In the past, substitutes for silver like these have always risen and fallen with fluctuating silver prices. Today, however, with the prospect of long-term high silver prices, there is now the possibility of a more stable business environment for them to develop, even though the market for these materials is generally inherently limited by their inferior performance compared to silver.
The bottom line is that the high price of silver is creating opportunities for new ink and paste formulations. Given that this high price is likely to persist, these formulations can be created with reasonable expectations of long-term use.
Declining Use of Printed Silver in the PV Market: The Silver Inks and Pastes Market Runs Out of Luck
Today, the PV market, and in particular the conventional crystalline silicon (c-Si) PV market, is the largest user of silver screen-printing pastes. Printed silver is used for both front-side grids and backside metallization. But usage of printed silver in PV applications is declining. Sales of silver inks and pastes for PV applications will decline from over $4.9 billion in 2013 to about $3.4 billion by the end of the forecast period in 2020.
Several, separate influences are creating this decline; taken together, these trends spell trouble for sales of printed silver to the PV sector:
• First, the high price of silver, combined with the extreme cost-sensitivity of PV general, has led PV panel makers to replace silver wherever possible. To reduce costs, printed silver tabbing strips are increasingly being fabricated with cheaper metal solders and, more importantly, backside metallization is being increasingly switched over to aluminum. The only good news here is that front-side grids will continue to be dominated by silver pastes, largely because few worthy substitutes exist for this application in which maximum conductivity is critical.
• In addition, growth rates in the overall PV market have softened considerably in the past two years. Declining growth rates in PV are, in no small part, due to a decrease in governments’ support for PV installations.
• To make matters worse, more and more PV is shifting toward thin-film PV (TFPV), which does not use nearly as much silver as the conventional c-Si PV that dominates the market today.
It is important to see this decline in the PV sector in historical context. The silver paste market has been one that has gotten lucky for decades now.
The demand for silver pastes grew large as the result of the need for membrane switches and PCBs for consumer appliances and for silver traces in heated automobile mirrors. When the growth of these markets began to wane, the silver paste market could make up ground with demand from the computer industry, then the cell phone sector, then the PV sector.
But with the demand for silver pastes and inks from the PV sector in decline, there seems to be no new markets appearing for silver pastes as has happened in the past.
Four Markets Where Silver Inks and Pastes Will Sell Well in the Next Few Years
This fairly gloomy picture should not be taken to mean that silver inks are about to join buggy whips in the ash heap of technology history. In fact, NanoMarkets has identified five areas where significant growth can still be expected for the next few years:
1. Traditional thick-film electronics. We think that traditional thick-film electronics, comprising a vast number of different printed circuit board applications as well as printed membrane switches, keyboards, surface-mounted capacitors, resistive heaters, and the like, will continue to be a growing sector. Specifically, traditional thick-film applications for printed silver will use $2.4 billion worth of silver inks and pastes (mostly pastes) in 2013, and this sector will grow to a value of about $3.4 billion by 2020.
• Most of these products are made using mature, well-established processes so replacing printed silver with a different process would be hard to achieve in many existing production lines. In addition, increased wealth in the developing world will spur increased demand in exactly the kinds of consumer products that employ printed silver circuitry.
2. New displays. New types of displays are challenging traditional displays in a number of different applications. In particular, touch displays represent a growth area for silver inks and pastes. The now dominant pro-cap touch screens require minimizing contact resistance in the panel border area, and this need heavily favors printed silver, with its superior conductivity.
• Flexible displays have been talked about for many years, but now seem to be on the verge of commercialization, thanks largely to Samsung and LG. Commercialization of flexible displays implies the use of flexible, i.e. plastic, substrates, which favors the use of printed silver circuitry, with its inherent flexibility and compatibility with low-temperature processing.
• Although sales of silver inks and pastes into the display industry are expected to decline slightly over the next couple of years -- from about $388 million in 2013 to about $379 in 2015 – NanoMarkets expects these revenues to begin to increase again starting in 2016 and to reach a value of nearly $450 million by the end of the decade.
3. OLED lighting. OLED lighting is poised for very rapid growth, especially after 2016, which is when it is anticipated that OLED lighting’s technical performance will be sufficient to meet the market needs of the broad general illumination market. Silver ink and paste suppliers should make the case now to OLED panel manufacturers that printed silver grids or bus bars, which could prevent voltage drop-induced visible brightness gradients and resistive heat losses across long spans of (less) conductive transparent electrodes, can enable the market to meet its full potential.
• Silver inks for non-screen processes: The ongoing megatrend toward miniaturization of electronic circuitry means that manufacturers will be looking for higher value-added inks that target specific, new niches. This trend will lead to increasing opportunities for higher resolution inks designed for deposition by ink-jet, flexographic, gravure, and other printing methods. Innovative suppliers will meet this challenge with new kinds of inks, including, potentially, some based on nanosilver particles. While the market in 2013 for such silver inks is expected to a modest $260 million, the value could grow to well over $1 billion by the end of the decade.
The contents from this article were drawn from the new NanoMarkets report, “The Silver Inks and Pastes Market 2013-2020” Additional details about the report are available on the firm’s website at: