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| where are the big markets? | |
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Forecasting the next big market for organic semiconductor technology has recently become an active occupation. It seems that every other month there is yet another market report claiming to offer an indispensable guide to the untold market opportunities for the future of 'plastic/printed electronics'. It is an activity that attracts the resources of large and small market research consultancies across the globe. The numbers themselves make interesting reading as the examples reproduced below show:
The key tenet for all these market reports is a simple assumption that if the technology is available then it must sell and sell in large quantities at premium pricing. Using a 'technology push' rather than a 'market pull' approach to forecasting is problematic. We have witnessed forecasts getting ahead of themselves before. The last time such 'large-scale' forecasting took place was during the internet boom of the late 1990s and early 2000s. While the prediction for a big future may have been realised to some degree, the eventual outcome was not as originally foretold. For the time being cintelliq has actively chosen not to produce market forecasts for organic semiconductors. It may at first sight seem irrational but we believe that at this point in the evolution of the industry it is pointless to expend time and effort on estimating the future market demand for products that don't yet exist. While cintelliq does not produce any market reports, it does not mean that we think the market won't develop: it will. We would not be here if we did not wholeheartedly believe that there was an exciting future ahead for the industry. There are no reasons why the market cannot grow to be substantial, eventually it may be as large as some of the market forecasts listed above. For the time being we side-step the issue of providing a market forecast by simply stating that if you believe that the market for OLED-based displays is large then the market for other organic semiconductor technology will be significantly larger. OLEDs will eventually represent only a small portion of the whole market. Over the course of the next five years the early markets for organic semiconductors will be measured in terms of tens of millions of dollars, rather than hundreds of million of dollars, and certainly not billions of dollars. Our view is based on considering three factors that will influence the rate of market acceptance of organic semiconductor technologies:
Rate of diffusion and adoption of new products It is important to consider the rate of diffusion and adoption of new products into the marketplace. The overall rate is affected by:
Time from invention to commercialisation There is a theory that it takes ten years from the patenting of a new technology idea to seeing it commercialised. It has happened for numerous technologies. It also happens to be true for OLED technology. Kodak filed its first patents in the mid 1980s and the technology eventually went to market in the late 1990s. The same was true for Cambridge Display Technology: patents filed in1989 and products launched in the early 2000s. In 2004 the market for OLED-based displays was estimated to be worth approx $450 million, yet for the market to reach that size it has taken more that 20 years since the first Kodak patents were filed. Much of the recent organic semiconductor technology development has been initiated within the past five or six years. Therefore, to a large extent the product and process know-how is still immature. You could argue that time to market would be quicker than with OLED because a great deal of known-how has already been accumulated, but LEDs and transistors are different. There is not too much overlap between the disciplines and so our premise remains. It will require at least ten years of development before the first products are commercialised. Production capacity ramp-up For applications such RFID, sensors, flexible backplanes etc, manufacturing capability in the industry is nowhere near the scale required to supply 100s of millions of dollars worth of products. Transferring a pilot process line from a research environment into to an actual manufacturing facility takes time, effort and patience. Just ask any of the general managers running OLED production lines what their experiences were, and what you will find is that getting started was a difficult task. If the industry is to grow at a significant rate it needs to be able to switch on production capacity quickly, which requires readily available access to both equipment and materials. Building the necessary infrastructure for a new technology that can react to such demand takes time. Even if there were a fully operational pilot line readily available it would still take time to transfer the process to another facility. Then it would have to be commissioned, products would have to be manufactured and supplied to customers, who would then undertake a period of qualification prior to committing. It all takes time. The silicon semiconductor industry has grown to be an important industry, impacting our lives in many ways. But it has taken many years to mature. Organic semiconductors have the same potential to grow to be an important industry and impact our lives in unforeseen ways, but they are an emerging technology. By any reasonable measure the organic semiconductor industry is at present progressing as could be expected, given the level of resources available to it. So setting market expectations ahead of what the industry can realistically achieve is not appropriate. It will not accelerate technology development or quicken the rate of adoption. Failure to deliver however could lead to disappointment, disillusion and difficulty in accessing investments. Now that would really slow down the industry. |
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