Samsung Display selects Corning Lotus glass for flexible OLED
While the headline would lead an investor to believe that Samsung Display (pvt), the world’s largest OLED display producer, has adopted Corning’s (GLW) Lotus glass for displays made with flexible OLED materials, there is some nuance here, although any production deal with Samsung Display, the largest producer of OLED displays by a wide margin, is a very good thing. LCD panels are typically made by depositing thin film transistors on a sheet of glass, covering that sheet with another, sealing the edges, and injecting liquid crystal between the layers. The top sheet of glass can be a color filter, with the red, green, and blue dots that are lit by the transistors and liquid crystal below, and depending on the application, might be covered with another sheet of hardened glass to protect the entire display.
OLED displays come in two varieties however, rigid and flexible. Rigid OLED displays are produced by depositing thin film transistors on a glass or metal substrate, with OLED materials deposited on the same sheet, with both sheets sealed together with glass frit, a paste of glass powder and binders which seals the sheets together. In many applications a cover glass is added to protect the display.
Flexible displays are produced in a similar fashion but the substrate is plastic, and while the idea of using a flexible plastic to allow the display to bend makes sense, the same non-rigid characteristics of plastic make it a much more difficult surface on which to deposit materials whose thicknesses are measured in microns. In order to overcome this difficulty, the plastic substrate is fixed to a sheet of glass before the thin film and OLED material deposition processes, and once the thin film and OLED materials are deposited the sheet is encapsulated with a number of layers of organic and inorganic materials, and removed from the glass via laser or UV light.
While there is no question that glass is the most stable substrate for LCD and rigid OLED displays, in the production of flexible OLEDs it should be understood that during the production of such displays the necessity for a thermally stable ‘carrier’ for the plastic substrate is an absolute condition, as the thin film and OLED material deposition processes is done at temperatures that affect the linearity of the plastic substrate if it were not attached to a stable glass such as Corning’s Lotus glass, which is a 3rd generation high-performance material, the critical patterning of pixels would not be consistent as the material changed temperature.
So what does this mean to glass producers like Corning? The answer is a complex one, but on a simplistic basis it is easier to see via chart illustration. OLED production is growing, and in certain segments, particularly small panel displays, it is growing rapidly, but investors must understand that the LCD display industry has been the mainstay of the display business for many years, and as such has built a huge infrastructure. That infrastructure and capacity continues to grow as producers follow the trend toward larger average screen sizes. OLED production is also growing, and far faster than LCD, but as a percentage of the industry’s overall capacity, it remains small as illustrated in Fig. 1. This leaves glass producers with a consistent market for most of their display glass products for the next few years.
Looking further, Fig. 2 illustrates OLED capacity broken down by rigid substrates and flexible substrates, and while the growth of flexible is obvious, particularly in 2018 and beyond, it is an even smaller subset of Fig. 1. We don’t doubt there will be some impact on glass producer volumes as flexible OLEDs become a greater percentage of OLED volume and two sheets (rigid) plus cover glass become one sheet of potentially reusable glass, but these changes are happening primarily in the small panel space, where surface area is small, while LCD TV and even OLED TV remains in the rigid world. Yes, LG (066570.KS) has a flexible OLED TV, but we believe it will be such a small portion of the overall display space area, that it will not move the needle for at least a few years.
All in, Samsung’s adoption of Lotus glass indicates that even in a process that does not use glass as the substrate, there is a continuing need for high quality (high-margin) glass to make the process work, and while Samsung Display has a special relationship with Corning, they are also the largest producer of OLED displays (rigid and flexible) by a wide margin. Their decision to use such a stable glass platform, as opposed to cheaper glass products, indicates their understanding of the quality necessary to make consumer oriented displays. After the Note 7 lesson as to using high quality and reliable components, we believe Samsung will take few chances on repeating that mistake up and down the supply chain, and the use of Lotus glass is an indication of that mindset.
OLED displays come in two varieties however, rigid and flexible. Rigid OLED displays are produced by depositing thin film transistors on a glass or metal substrate, with OLED materials deposited on the same sheet, with both sheets sealed together with glass frit, a paste of glass powder and binders which seals the sheets together. In many applications a cover glass is added to protect the display.
Flexible displays are produced in a similar fashion but the substrate is plastic, and while the idea of using a flexible plastic to allow the display to bend makes sense, the same non-rigid characteristics of plastic make it a much more difficult surface on which to deposit materials whose thicknesses are measured in microns. In order to overcome this difficulty, the plastic substrate is fixed to a sheet of glass before the thin film and OLED material deposition processes, and once the thin film and OLED materials are deposited the sheet is encapsulated with a number of layers of organic and inorganic materials, and removed from the glass via laser or UV light.
While there is no question that glass is the most stable substrate for LCD and rigid OLED displays, in the production of flexible OLEDs it should be understood that during the production of such displays the necessity for a thermally stable ‘carrier’ for the plastic substrate is an absolute condition, as the thin film and OLED material deposition processes is done at temperatures that affect the linearity of the plastic substrate if it were not attached to a stable glass such as Corning’s Lotus glass, which is a 3rd generation high-performance material, the critical patterning of pixels would not be consistent as the material changed temperature.
So what does this mean to glass producers like Corning? The answer is a complex one, but on a simplistic basis it is easier to see via chart illustration. OLED production is growing, and in certain segments, particularly small panel displays, it is growing rapidly, but investors must understand that the LCD display industry has been the mainstay of the display business for many years, and as such has built a huge infrastructure. That infrastructure and capacity continues to grow as producers follow the trend toward larger average screen sizes. OLED production is also growing, and far faster than LCD, but as a percentage of the industry’s overall capacity, it remains small as illustrated in Fig. 1. This leaves glass producers with a consistent market for most of their display glass products for the next few years.
Looking further, Fig. 2 illustrates OLED capacity broken down by rigid substrates and flexible substrates, and while the growth of flexible is obvious, particularly in 2018 and beyond, it is an even smaller subset of Fig. 1. We don’t doubt there will be some impact on glass producer volumes as flexible OLEDs become a greater percentage of OLED volume and two sheets (rigid) plus cover glass become one sheet of potentially reusable glass, but these changes are happening primarily in the small panel space, where surface area is small, while LCD TV and even OLED TV remains in the rigid world. Yes, LG (066570.KS) has a flexible OLED TV, but we believe it will be such a small portion of the overall display space area, that it will not move the needle for at least a few years.
All in, Samsung’s adoption of Lotus glass indicates that even in a process that does not use glass as the substrate, there is a continuing need for high quality (high-margin) glass to make the process work, and while Samsung Display has a special relationship with Corning, they are also the largest producer of OLED displays (rigid and flexible) by a wide margin. Their decision to use such a stable glass platform, as opposed to cheaper glass products, indicates their understanding of the quality necessary to make consumer oriented displays. After the Note 7 lesson as to using high quality and reliable components, we believe Samsung will take few chances on repeating that mistake up and down the supply chain, and the use of Lotus glass is an indication of that mindset.
Figure 1 - Display Industry Growth - Source: SCMR LLC, OLED-A
Figure 2 - Raw OLED Capacity - Rigis vs. Flexible - Source: SCMR LLC, OLED-A, Company Data
Figure 3 - Corning 2016 - Rigid OLED process - Source: Corning 2016
Figure 4 - Flexible OLED process - Source: Corning 2016
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