OLEDs are highly vulnerable to oxygen and water vapor, so they present an encapsulation issue; developments to improve barrier performance have been discussed in the OLED industry since its earliest days. Until recently, however, OLED encapsulation materials represented a relatively small market for chemical companies and a few startups. For many years there were few signs that OLEDs were going to break out of their niche market pattern, with almost all of the OLED market being accounted for by passive matrix displays for MP3 payers, cell phone sub-displays, etc.
The situation was further complicated by the popular notion among OLED manufacturers that encapsulation was the least of their worries, since most OLEDs could be successfully encapsulated in a stack that often also included desiccant under glass using epoxy adhesives for edge sealing. The simple glass and epoxy encapsulation approach was not only all that was required for small displays, it was all that display makers were willing to pay for, and it continues to be the principal encapsulation strategy in place today.
Even as the size of the passive matrix OLED business grew, true opportunities for OLED encapsulation were highly limited, and few materials firms were able to sustain a business based on encapsulation materials alone. And although materials suppliers were initially happy to supply these applications, they did so with the expectation that markets large enough to justify their efforts would eventually emerge.
Finally, A Growing Market for OLEDs Emerges
Fortunately (at least for encapsulation systems makers), the opportunities have grown in recent years in important ways:
• OLED displays have at last been “mainstreamed” with the arrival of mass-market cell phones containing active matrix OLEDs as primary displays; NanoMarkets has estimated that the size of the total OLED materials market exceeded $300 million in 2011.
• Meanwhile, OLED lighting is now on the market in the form of “designer” chandeliers and table lamps, and larger segments of the lighting market are likely to be penetrated by OLED lighting in the next few years.
• And while the first attempts to introduce OLED TVs stumbled, it seems that 2012 or 2013 will see the introduction of OLED TVs on the market with much greater chances of market success than the products that preceded them.
These trends mean that the addressable market for OLED encapsulation materials is rapidly growing and should continue to do so. Importantly, the fastest-growing applications for OLEDs involve larger-area panels that by definition consume relatively larger amounts of materials. NanoMarkets predicts that the OLED materials market will reach over $5 Billion in sales by 2018, and at least 10%, or about $500 Million, of this revenue will come from encapsulation materials and technologies. But the success of the market is not a foregone conclusion; better encapsulation technologies at reasonable costs are required if larger-format OLEDs are going to meet their potential.