OLED lighting market to reach $1.7 billion by 2020

Despite support from some of the biggest players in the global lighting industry, OLED lighting products have been slow to penetrate the market. At Light+Building in April this year, OLED panels and prototype lighting fixtures were easy to find, but price tags are high and sales volumes are low.

While OLED displays are a well-established technology, particularly in the smart-phone market, the promised take-off of the OLED lighting market has seen many false dawns. Market research firm Yole Développement estimates that sales of OLED lighting panels will amount to only $2.8 million in 2012.

OLED lighting market 2012-2020

However, Yole is predicting solid growth during the remainder of the decade, with the market reaching $1.7 billion by 2020. Growth will be driven mainly by general-lighting applications, which will represent more than 70% of the overall OLED lighting business in 2020.

In many lighting applications, OLEDs will compete with LED-based products, which have already made inroads into the market and have introduced some of the benefits of solid-state lighting – notably energy efficiency. OLED lighting is struggling with factors such as low efficacy compared with other technologies (not just LEDs), as well as higher costs and long-term reliability issues.

As a planar light source, OLED lighting offers exciting design possibilities that have seen the technology used in high-end luminaires and other niche applications. To access traditional market segments, such as commercial and office lighting, Yole says that OLED technology “will need to find a spark, as well as combine enough different niche markets to achieve the economies of scale that will decrease costs.” Yole believes this should be triggered by 2014 with the use of larger substrates and better process control.

Technology developments

As is typical for an emerging technology, a large variety of materials and OLED structures are still being evaluated and researched in order to improve the light performance and lifetime, and to decrease manufacturing costs.

OLEDs on the Philips stand at Light+Building 2012

There is still uncertainty whether the more successful material approach will be small-molecule OLED materials or polymer materials. However, Yole says that polymers continue to struggle to demonstrate the ability to turn their cost and performance potential into an industrial reality.

All OLED lighting panels in production use rigid glass substrates. However, progress in roll-to-roll processing, flexible ultra-thin glass and encapsulation solutions will enable the progressive penetration of flexible OLED panels into the lighting market.

Business models

The rise of OLED lighting will depend on the strategies adopted by OLED panel manufacturers. “New business models are mandatory: the traditional lighting industry will be reluctant to integrate new technology as it could eat away at margins,” explains Milan Rosina, technology & market analyst for OLED & Photovoltaics at Yole Développement. “OLED cost directly impacts the cost of OLED-based luminaires.”

Risona predicts that companies will struggle to integrate OLED technology into their lighting products, unless they have strong vertical integration. But they will also need good access to distribution channels. “The rise of OLED lighting will therefore depend on the right merger of the emerging OLED industry with the traditional lighting industry,” says Yole.

Moreover, for general lighting, the main challenge for OLEDs will be to identify the “spark” market that will allow the technology to develop economies of scale, and to create a marketing window conveying advantages and possibilities of the technology toward consumers.