Samsung Display Buys Cynora
Over the last few years we have mentioned the development of TADFs (Thermally Activated Delayed Fluorescents) as complementary to or as an alternative to fluorescent and phosphorescent OLED emitter materials. Given that TADFs are based on fluorescent materials, which are relatively inexpensive but exhibit a number of the more desirable properties of more costly phosphorescent OLED materials, they have been the subject of considerable research in the OLED material space since the early 2000’s, particularly at the university level, with the objective of designing less expensive alternatives to the red and green phosphorescent OLED emitter materials that are used in OLED displays currently.
In order to produce the light necessary for an OLED display, electrons in the emitter material absorb electrical energy which pushes them from what is called a ground state (it is easiest to think of it as an orbit around a planet) to an excited state (a higher orbit). These excited electrons quickly fall back to their ground state but give off the electrical energy they absorbed in the form of light, essentially converting the electrical energy that you supply when you turn the display on, into the light you see on the screen, with the composition of the emitter material determining the color of the light.
In order to produce the light necessary for an OLED display, electrons in the emitter material absorb electrical energy which pushes them from what is called a ground state (it is easiest to think of it as an orbit around a planet) to an excited state (a higher orbit). These excited electrons quickly fall back to their ground state but give off the electrical energy they absorbed in the form of light, essentially converting the electrical energy that you supply when you turn the display on, into the light you see on the screen, with the composition of the emitter material determining the color of the light.
OLED Light Generation - Source: SCMR LLC
Here’s where it gets a bit more complex… When the electrical energy is applied to that electron and it moves to an excited state that change can happen two ways, as a singlet or a triplet, with the technical difference between the two not germane here, but phosphorescent OLED materials produce triplets which have considerable higher efficiency when converting electrical energy to visible energy (light). This makes phosphorescent OLED materials the preferred choice for display manufacturers. However there are some drawbacks, the first of which is such phosphorescent emitters are only available in certain colors, with blue the exception, so in order to create an RGB (Red, green, blue) display, a less efficient fluorescent blue emitter must be included, which means a less efficient combination of materials and the potential for the materials to age at different rates.
Without going into the details of why creating a phosphorescent blue emitter has proven difficult, we leave it to say that material scientists have been working toward improving the efficiency of blue fluorescent materials for many years, which is where TADFs and Cynora (pvt) come in. One technical detail of the difference between fluorescent and phosphorescent emitters is that the jump up to an excited state and the subsequent return to ground state in fluorescent emitters is rapid, while in phosphorescent emitters (triplets) it is relatively slow, which makes phosphorescents more efficient in converting electrical energy into light energy. TADFs take the rapid fluorescent singlet reaction and slow it down (hence the ‘delayed’ in the name) to make them more efficient, giving the potential for TADFs to be used as a more efficient blue emitter when paired with phosphorescent red and green emitters.
This has been the objective of Cynora and a Japanese company Kyulux (pvt), who have been working toward the development of a blue TADF for a number of years, along with a vast group of universities and R&D arms of companies in the display materials business. Unfortunately such development has proven more difficult than might have been originally thought and while there have been blue TADF materials released commercially, they have not been able to meet all of the characteristics needed by OLED display manufacturers.
Heretofore we have only mentioned OLED material efficiency, but commercial OLED emitter materials must meet a number of other characteristics, all of which are a sort of balancing act between efficiency, material lifetime, and color point, as each fluorescent, phosphorescent, or TADF material is trade-off of the three. We have seen highly efficient blue phosphorescent OLED emitters that would certainly meet commercial requirements in that category, but had lifetimes that were not commercially viable, and we have seen efficient blue phosphorescent emitters that had longer lifetimes, but were not the deep blue necessary for commercial displays, so Cynora and other TADF developers have been competing with phosphorescent blue developers to hit that magic combination of all three characteristics that would push a new material into true commercial production.
If Cynora has not been able to produce the perfect blue TADF iteration, why would Samsung Display (pvt) , an affiliate of Samsung Electronics (005930.KS), and investor in Cynora, want to pay an estimated $300m (no confirmation on price has been noted) for the company, especially as it seems the company had been reducing its staff over the last few months? We believe there are a number of reasons, the first of which is IP. Cynora has filed or been granted over 600 patents, much of which relates to the development and application of TADFs, with an emphasis on blue. Even if Cynora was unable to meet its goal of developing a commercial blue TADF OLED emitter material that offered better characteristics than existing fluorescent emitters, they have done very extensive work toward that end, which makes that IP valuable, particularly to Samsung Display, the leader in the RGB OLED space. LG Display (LPL) was also an investor in Cynora, which means that SDC’s purchase would also force other OLED producers, including LG Display, to license any TADF IP that was developed by Cynora if it predates new material TADF discoveries and would give SDC a cost advantage if such materials became commercially viable.
We expect that while Cynora has sold relatively small amounts of various materials, their last funding round was in May of 2019 and were likely facing the prospects of a need for further financing, given a staff of ~120. At the time of the 2019 financing the company’s CEO was replaced, likely to refocus the company toward a more financially viable commercial timeline. Our history with the company has consisted of a number of meetings over the last seven or eight years where timeline estimates tended to be pushed forward, so we would expect that initial and early investors (2010 and earlier), might be looking for a way out of what has become a longer-term investment than originally thought. While we have looked at a number of Cynora’s patents, we expect SDC has done a deep dive into the value behind the company’s IP in order to value the only part of Cynora that SDC seems to want. If SDC is able to monetize that IP then the transaction will make sense, otherwise it seems to be a protective move to keep any hidden potential out of the hands of competitors and to bail out the company’s venture investment.
Without going into the details of why creating a phosphorescent blue emitter has proven difficult, we leave it to say that material scientists have been working toward improving the efficiency of blue fluorescent materials for many years, which is where TADFs and Cynora (pvt) come in. One technical detail of the difference between fluorescent and phosphorescent emitters is that the jump up to an excited state and the subsequent return to ground state in fluorescent emitters is rapid, while in phosphorescent emitters (triplets) it is relatively slow, which makes phosphorescents more efficient in converting electrical energy into light energy. TADFs take the rapid fluorescent singlet reaction and slow it down (hence the ‘delayed’ in the name) to make them more efficient, giving the potential for TADFs to be used as a more efficient blue emitter when paired with phosphorescent red and green emitters.
This has been the objective of Cynora and a Japanese company Kyulux (pvt), who have been working toward the development of a blue TADF for a number of years, along with a vast group of universities and R&D arms of companies in the display materials business. Unfortunately such development has proven more difficult than might have been originally thought and while there have been blue TADF materials released commercially, they have not been able to meet all of the characteristics needed by OLED display manufacturers.
Heretofore we have only mentioned OLED material efficiency, but commercial OLED emitter materials must meet a number of other characteristics, all of which are a sort of balancing act between efficiency, material lifetime, and color point, as each fluorescent, phosphorescent, or TADF material is trade-off of the three. We have seen highly efficient blue phosphorescent OLED emitters that would certainly meet commercial requirements in that category, but had lifetimes that were not commercially viable, and we have seen efficient blue phosphorescent emitters that had longer lifetimes, but were not the deep blue necessary for commercial displays, so Cynora and other TADF developers have been competing with phosphorescent blue developers to hit that magic combination of all three characteristics that would push a new material into true commercial production.
If Cynora has not been able to produce the perfect blue TADF iteration, why would Samsung Display (pvt) , an affiliate of Samsung Electronics (005930.KS), and investor in Cynora, want to pay an estimated $300m (no confirmation on price has been noted) for the company, especially as it seems the company had been reducing its staff over the last few months? We believe there are a number of reasons, the first of which is IP. Cynora has filed or been granted over 600 patents, much of which relates to the development and application of TADFs, with an emphasis on blue. Even if Cynora was unable to meet its goal of developing a commercial blue TADF OLED emitter material that offered better characteristics than existing fluorescent emitters, they have done very extensive work toward that end, which makes that IP valuable, particularly to Samsung Display, the leader in the RGB OLED space. LG Display (LPL) was also an investor in Cynora, which means that SDC’s purchase would also force other OLED producers, including LG Display, to license any TADF IP that was developed by Cynora if it predates new material TADF discoveries and would give SDC a cost advantage if such materials became commercially viable.
We expect that while Cynora has sold relatively small amounts of various materials, their last funding round was in May of 2019 and were likely facing the prospects of a need for further financing, given a staff of ~120. At the time of the 2019 financing the company’s CEO was replaced, likely to refocus the company toward a more financially viable commercial timeline. Our history with the company has consisted of a number of meetings over the last seven or eight years where timeline estimates tended to be pushed forward, so we would expect that initial and early investors (2010 and earlier), might be looking for a way out of what has become a longer-term investment than originally thought. While we have looked at a number of Cynora’s patents, we expect SDC has done a deep dive into the value behind the company’s IP in order to value the only part of Cynora that SDC seems to want. If SDC is able to monetize that IP then the transaction will make sense, otherwise it seems to be a protective move to keep any hidden potential out of the hands of competitors and to bail out the company’s venture investment.
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