For the past two or three years, the manufacturers of alternative TCs have focused in on the touch-screen sensor market. There are several reasons for this:
• Growth in the touch-screen display market is rapid and is accelerating as the result of the success of tablet computing
• There are a number of touch screen sensor technologies, but the major ones all use TCs to some extent
• The performance requirements of touch-screen sensors with regard to TCs is less than for most actual displays and are well suited to the current state of the art for most alternative TCs today
• The firms that produce/integrate the touch-sensors for displays are easier for the alternative TC firms to reach than the mainstream display makers. In particular, there are many more touch-sensor makers than there are mainstream display makers and they are more entrepreneurial firms with less un-depreciated investment in manufacturing infrastructure than is the case with mainstream display industry. Touch sensor makers may therefore be more willing to take on a new TC material, if some advantage—usually a cost advantage—can be established.
A few touch sensor makers are already using alternative TCs. Cambrios' nanosilver-based TC is to be found in several smartphone displays. And Kent Displays is apparently using a conductive polymer in a low-end e-paper display. While such "proofs" of the viability of alternatives to ITO are still few and far between, we take it as an indication that ITO alternatives have at last arrived at a point that they are good enough from the perspective of performance and manufacturability (at least in some market segments) and are also satisfactory in terms of price.
From the perspective of the alternative TC makers, we see all this as good news. But it is important to see these successes in context of the goals of this alternative TC firm. Specifically, these companies are not at this stage of their game trying to build large businesses, but rather build an initial revenue stream to achieve minimal profitability and impress external investors and—in the case of the large firms in this space—also internal management.
This will certainly be possible for some TC firms; Cambrios seems to be moving close to initial profitability, for example. But in NanoMarkets' view, it is by no means clear that other similar firms will be able to follow suit:
• While touch-screen displays are becoming increasingly common, this trend is mostly occurring in small mobile displays. Mainstream computer monitors have largely resisted using touch technology and, of course, televisions are not making use of touch technology at all. The bottom line here is that the largest displays—the ones that use the most material—are not apparently an addressable market for alternative TCs; the actual addressable market for alternative TCs in the touch-screen sensor market is really not that large.
• The fact that the touch-screen sensor market has many firms in it has its attractive side; many potential customers. However, some of the touch-screen sensor firms are quite small and are unlikely to provide alternative TC firms with substantial orders.
Yet even the briefest contact with the alternative TC suppliers quickly convinces that these firms now have a single-minded purpose to penetrate the touch display market and do not seem to be much interested in other markets with less immediate potential. At one level, this is commendable; for smaller firms and TC groups within larger firms focusing on early sales is surely better than chasing after futuristic applications and wholesale ITO replacement.
That said, NanoMarkets is not fully convinced that there is enough inherent opportunity in the touch-screen sensor market to get most of the firms chasing after this sector even to initial profitability. In any case, we are virtually certain that it will be impossible to turn alternative TC firms into sizeable businesses based on the touch-screen sensor market alone; which may not matter to many firms in the alternative TC business today, but will matter sooner or later.
Today, it often seems that the alternative TC firms are chasing after touch screens as much because they can see no other sector to go after as because it is inherently such a great opportunity. NanoMarkets believes this situation is about to change as the result of the mainstreaming of flexible displays and OLED lighting and displays. It is not so much that the OLED market will ever present huge opportunities for manufacturers of alternative TCs, but rather that by 2015 or so, OLEDs will present a new opportunity for these manufacturers; about the same size as when they started chasing after the touch sensor market.