NanoMarkets has covered thin-film and printed batteries markets for seven years. During that time we've seen many companies come and go, but a few have managed to make steady progress in technology and even achieve some revenues. Markets that were hoped to embrace these batteries, such as RFIDs and medical patches, haven't really come on as strongly as hoped.
In our 2014 report we acknowledged the thin battery sector's long search for the end-market promised lands, where usage cases would appropriately value thin batteries' unique features such as flexibility, size/shape, rechargeable or essentially disposable—because in most applications they simply can't compete with conventional battery technologies on performance alone.
Here's the problem: some of these end markets have been in the crosshairs for thin batteries for as long as we've been covering this sector (and some go back several years longer than that), but we're still talking about when they'll arrive. The reality today is this: there really aren't any great industry-wide success stories in hand for thin batteries. And every year we hear of another one or two companies that fade away—and the trend continues.
We continue to see some increasing (if yet cautious) optimism for some of these markets. But at some point, and which we think is soon to arrive, it's time to ask harder questions about which of these markets truly will pan out, and in a more near-term timeline, and which ones simply aren't going to be worth the effort to keep chasing.
Needed: Better Supply Chains
To succeed, the thin battery sector needs secure reliable end markets accounting for large volumes, but these do not seem to have materialized over a period of almost a decade. What NanoMarkets is hearing from suppliers is perhaps even more heightened sense of this problem. Yet, many of them continue to believe they are on the cusp of unlocking real end-market demand, and revenue streams, from powered smart cards to some versions of "smart labels."
We increasingly sense an increased tone of frustration and urgency in the “thin battery” sector that an adequate supply-chain remains absent in many cases. Some firms have aligned strategically with larger entities as a means to help scale up; Solicore and Donnelly are the prime example, while other suppliers have strategic backing that might be tapped (e.g. Flextronics invests in Imprint Energy). And yet we also hear tales of woe, concerns that a preliminary order of even a few million units sends partners scrambling back up the supply-chain ladder worried about procuring enough raw materials to start with.
As one industry source observed, in any emerging market, any weak link makes the entire industry weak. If smaller orders don't pass a stress test, where's the confidence to serve multiple markets with tens or hundreds of millions of units (or possibly vastly more)?
Paging Godot: Powered Cards
One end user sector that seems less impacted by the problems mentioned above is the powered smart cards business, where thin batteries are widely used for commercial products. In fact, over the past year we are witnessing trends in OTP financial transactions that really do emphasize new functionality delivered by onboard power.
We also have some cautious optimism that these trends, currently playing out in Europe, will extend into larger markets in the U.S. and China. Card costs are approaching levels where issuers might bite, and some new card suppliers entering the mix. Taking all that, we finally might have something here for thin batteries to hang their hats.
Aside from OTP cards for consumer financial transactions, which remain the main application for powered smart cards, other potential applications—secure identification (including biometrics), customer loyalty/gift/rewards cards, transportation/ticketing, even healthcare records continue to wait in the wings. They will greatly depend on whatever scale is built out to support OTP cards.
Sensors and Vertical Markets: Ready, Aim, Aim...
Thin batteries have long been touted as a means to power wireless sensors in a number of contexts. With the arrival of the Internet-of-Things (IoT) where sensor functionality powered by traditional batteries isn't feasible in terms of form, functionality, or cost, the expectations for volumes of thin batteries in this sector have increased.
One example we like to recall is in replacing batteries for remote LED lighting in a convention center superstructure: remote, set-it-and-forget-it functionality, and cost to replace (notably using union labor) are all problematic. In these contexts thin batteries can be complementary to and competitive with some energy harvesting capabilities; put together they could create a battery that never needs recharging or much replacement, though this arrangement add system complexity and cost.
Diving deeper beneath the IoT theme are identifiable vertical-market use cases for thin batteries. Many firms continue to point to specific areas for "smart" labels and packaging where tracking data over time (and needing a way to power that functionality) is critical: monitoring temperature-sensitive products through the supply-chain logistics, such as biopharmaceuticals or perishable goods. However, we note that similar applications were being talked about years ago and they have become commercialized only slowly.
Another area that seems to be picking up some steam is in medical devices—here, we believe, a very compelling case could be made for thin-film batteries. Cymbet's EnerChip batteries have been deemed 100% biocompatible and have an application case in an intraocular pressure sensor. (as an aside, rumors of Cymbet's shut down continue to circulate) Blue Spark's new wireless digital temperature thermometer, TempTraq, unveiled at the 2015 CES show, is now awaiting final FDA approval as a safe and effective medical device. Even bigger opportunities lie in medical implants and biocompatibility.
Consumer Electronics: The Way Forward for Thin Batteries?
We continue to see emerging over the past year the rise of potentially massive and lucrative market opportunities for thin-film and printed batteries, within consumer electronics and wearable electronics.
The broader strategy to keep making everything thinner and lighter would, on the face of it, seem favorable to thin-film batteries over standard liquid-electrolyte lithium-ion batteries burdened with size and form factor constraints. Building on some interesting developments in 2013, we're now hearing that solid-state thin-film batteries are indeed gaining traction in some high-volume applications, including some giant electronics firms.
And then there's the emerging category of wearable electronics, with overlaps into both the IoT and consumer electronics. More wearable electronics devices are coming out, and the giant electronics firms behind them are clearly interested in thin battery technologies (publicly and quietly). For now, the crop of "smart watches" are largely getting by with rigid or some curved form of battery, but there's talk of thin-film batteries possibly inside at least one of them. Very likely newer next wearable devices such as bracelets will indeed need more flexible and form-friendly battery technology.
NanoMarkets isn’t yet prepared to declare consumer electronics and wearables as the promised land for thin batteries just yet. But we cannot ignore several key points that thin battery makers need to take heart:
Large electronics companies are very interested in thin batteries nowadays. They weren't just a couple of years ago.
These firms have massive amounts of money, and supply chains, at their fingertips. Thin battery suppliers need both urgently.
Some of them are starting to patent thin-film battery technology themselves, whether to outline a use case or possibly (additionally) to make such batteries themselves.
Phones are a stable market—unlike many of the other applications considered targets by thin batteries, from labels to RFID.
Besides the electronics companies themselves, battery firms might want to get to know a lot better their siblings across the electronics component aisle: semiconductor manufacturers.
Full integration with other components in a system is something we keep hearing as an important trend. It is conceivable that thin batteries might be incorporated onto or even within a microchip, in a package that subsequently ends up in a phone or other consumer device. Whether they license or create this battery capability is a strategic decision; in either case, battery makers should be ready to welcome or defend against it.
It’s also worth noting that key suppliers to those devicemakers also see familiar and possibly fertile ground in battery manufacturing—and a recognition that they also could help bring some scale to bear.
In summary, NanoMarkets still believes that thin-film and printed batteries have some promise. But we're starting to wonder how many of the proposed usage cases are still worth chasing after, and whether it's time for firms—those who remain—to acknowledge where success is most likely to come from in the coming years.