thinfilmmfg.com Feature Index Organic semiconductor outlook

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20 February 2003

Organic semiconductors create new markets

Ever since 1990, when researchers at Cambridge University demonstrated electroluminescence in poly(para-phenylene vinylene) (PPV), organic semiconductors have attracted research dollars, venture investments, and even Nobel prizes. They have not, however, achieved significant product sales until very recently. In the last year or two, organic semiconductors have begun to appear in commercial products. The technology appears poised for rapid growth.

• Market Outlook
  • Organic semiconductor growth by region, in percent
  • Organic semiconductor growth by sector, in percent
  • Forecast organic semiconductor sales, 2002-2007
  • Outlook for organic semiconductor process methods
• Technology
  • Organic semiconductor technology transitions, to 2007
• Price/Performance
  • Cost as a factor in organic semiconductor acceptance
• Conclusions
• Further Information

Organic semiconductors can potentially support many completely new applications, from computerized clothing to foldable displays. Still, their first applications and their most challenging competition are likely to come from the existing semiconductor and display markets. Silicon technology's established manufacturing infrastructure has allowed it to overcome many potential competitors in the past. Companies developing organic semiconductor products cannot ignore the enormous silicon device market. Most early applications of organic semiconductors require them to work in concert with conventional devices, tying their fortunes to those of the larger semiconductor industry.

At present, the semiconductor industry as a whole dwarfs the organic semiconductor segment. The global semiconductor industry totaled about US$142 billion in 2002, of which organic semiconductors accounted for less than US$300 million.

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Market Outlook

The global semiconductor industry is prone to cyclical swings between rapid growth and painful contraction, driven in part by the conflict between short product cycles and long capital expenditure and technology development cycles. Organic semiconductors are likely to be constrained by these cycles as long as they used in combination with inorganic semiconductors. As applications based entirely on organic semiconductors emerge, the simpler, less expensive manufacturing of organic devices may allow them to escape the inorganic semiconductor industry's cyclical dynamics.

The semiconductor industry as a whole expects moderate growth in 2003, following two weak years in 2001 and 2002. The cyclical pattern is likely to continue through 2007, with expected average annual growth of around 8.3%. The Asia/Pacific region is the fastest growing segment of the semiconductor market, containing as it does the world's fastest growing economies. It should be the most fertile region for organic semiconductor growth as well.

Table 1: Organic semiconductor growth by region, in percent

	2002-2003	CAGR 2002-2005
Western Europe	26.7	33.9
Eastern Europe	25.2	33.1
Asia Pacific	30.2	43.2
North America	27.5	38.0
South America	26.2	35.0
Rest of the world	26.6	33.7
Overall market	27.1	36.2

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The specialized logic and optoelectronic segments of the semiconductor market are likely to be most directly affected by growth in organic semiconductors. Logic currently accounts for about 22% of the world semiconductor market, while optoelectronics account for almost 5%.

Other than displays, which are already on the market, applications of organic semiconductors in packaging and RF ID tags may be the closest to technological feasibility. These devices require only limited numbers of transistors and are compatible with current organic semiconductor manufacturing methods.

Silicon RF tags are already well-established and cost very little. Packaging applications of organic semiconductors may be more promising in the short term. Applications like computerized clothing and electronic luggage tags are likely to emerge more slowly, as they face significant cost and technical barriers.

Table 2: Organic semiconductor growth by sector, in percent.

	2002-2003	CAGR 2002-2005
Large area FPDs (TVs, monitors etc.)	27.2	37.9
Small area FPDs (cars, consumer electronics etc.)	27.9	42.9
Cell phones	27.7	37.7
Computerised clothing	23.9	31.7
Laptops	26.3	36.7
Personal Digital Assets (PDAs)	29.2	35.7
Luggage Tags	27.9	37.7
Digital Cameras	29.7	34.4
Packaging	26.7	31.8
RFID (smart labels and smartcards)	27.4	31.2
Organic solar cells	28.8	40.2
Miscellaneous electronics	27.5	35.1
Other products	21.8	36.9
Overall market	27.1	36.2

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Organic solar cells could encourage market adoption of many other organic semiconductor devices by supplying a portable, non-bulky power source. Unfortunately, the current state of organic semiconductor technology is inadequate for most applications.

The display market offers the brightest opportunity for organic semiconductors. It accounts for the largest share of existing devices, with approximately $200 million in sales in 2002. While organic light emitting devices (OLEDs) account for only about one percent of the display market now, their simple design and reduced bulk could allow them to make rapid inroads. Organic semiconductors could account for as much as four percent of the overall display market by 2007.

Liquid crystal displays, the leading technology for small and medium-sized displays, are likely to maintain their grip on the high-resolution, full-color segment of the market. OLED displays are likely to erode LCD market share from the low end. Manufacturing technology is not yet able to deliver the very large, very flexible displays envisioned by organic semiconductor enthusiasts.

Table 3: Forecast organic semiconductor sales, millions of US$, 2002-2007

	2002	2003	2004	2005	2006	2007	CAGR
Large area FPDs (TVs, monitors etc.)				10.0	13.8	19.0	37.9%
Small area FPDs (cars, consumer electronics etc.)	200.0	219.7	408.2	583.2	833.1	1190.2	42.9%
Cell phones	65.3	71.7	133.3	190.4	272.0	388.6	42.9%
Computerised clothing				5.0	6.6	8.7	31.7%
Laptops				5.0	6.8	9.3	36.7%
Personal Digital Assets (PDAs)	20.4	22.4	41.7	59.5	85.0	121.4	42.9%
Luggage Tags						5.0
Digital Cameras				10.0	13.4	18.1	34.4%
Packaging				5.0	6.6	8.7	31.8%
RFID (smart labels and smartcards)				5.0	6.6	8.6	31.2%
Organic solar cells				5.0	7.0	9.8	40.2%
Miscellaneous electronics				10.0	13.5	18.3	35.1%
Total	200.0	219.7	408.2	618.2	880.6	1254.6

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The display business is highly commoditized with a fragmented and inefficient supply chain. The simplicity of OLED manufacturing will help reduce all of the component costs of a display, not just the cost of the imaging array.

Widespread acceptance of OLED display technology is currently limited by the lack of manufacturing capacity. For OLEDs to capture even ten percent of total display area will require construction of between fifteen and twenty additional manufacturing facilities. The willingness of manufacturers to make significant investments will depend on economic conditions. Profits have been elusive for display manufacturers even when the macroeconomic outlook is bright.

Most organic semiconductors are currently manufactured by vapor deposition, spin-coating, or spray deposition. These methods are already well established in semiconductor manufacturing and are compatible with current formulations of organic semiconductor materials. They are not suitable for extremely large volume applications like electronic textiles or highly customized devices like smart labels. Such applications will require commercial development of printing methods for organic semiconductors.

Most current producers of organic semiconductors have their roots in the electronics and semiconductor industries. They have little expertise in printing methods. Though organic semiconductors are substantially different from traditional inks, semiconductor inks may offer an enormous opportunity to established printing suppliers. Continuous feed printing methods can achieve lower costs than even the semiconductor industry's highly efficient batch processing methods. Sheet-oriented digital printing could allow mass customization of electronic devices at the point of use.

Companies with printing expertise have so far shown little interest in organic semiconductors, citing a lack of demand from their customer base. Enterprising suppliers willing to seek out new customers in the electronics industry may find fertile fields and strong growth opportunities.

Table 4: Outlook for organic semiconductor process methods

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Technology

The commercial prospects for organic semiconductors depend on their technical capabilities. They will succeed or fail not because they can compete with silicon devices on sheer processing power--they can't--but because they can do things that silicon devices can't. While silicon should continue to dominate performance-oriented segments of the semiconductor market, organic semiconductors offer simpler processing and more physically robust devices. Organic materials may be able to win a niche in low cost, highly portable applications.

For example, OLEDs are based on electroluminescence, rather than photoemission from a junction as in conventional LEDs. Thus, they can achieve a functioning display in an inexpensive, lightweight package. Organic materials cannot yet compete with high end LCDs, but are especially attractive for space-constrained applications like dashboard indicators, and cost-sensitive applications like cellular phones.

Organic field effect transistors offer performance comparable to amorphous silicon. They are well-suited to display drive circuits, particularly for OLED displays. They are likely to be appropriate for other applications where cost is critical and performance requirements are modest.

Organic photovoltaics are promising, but must achieve significant efficiency improvements in order to match the price/performance of amorphous silicon solar cells. Because of their low bulk and mechanical flexibility, they are likely to be aesthetically acceptable in situations where amorphous silicon is not.

Though little research has yet considered integration of organic semiconductors with conventional printing methods, the two technologies seem basically compatible. If this promise is achieved, organic semiconductors will offer electronics capability at costs far below those of inorganic semiconductors.

Organic devices need several key innovations to achieve their market potential. First, ongoing improvement in raw materials is necessary. Improved conductivity and carrier mobility would increase the range of available applications. Improved chemical and mechanical stability would simplify packaging and allow use of organic devices in harsh environments. Predictable and consistent material properties are necessary for commercialization. Organic solar cell materials in particular require significant fundamental improvements.

Table 5: Organic semiconductor technology transitions, to 2007

Second, many of the potential applications of organic devices are unlikely to be cost-effective without innovations in manufacturing methods. Semiconductor formulations compatible with existing printing methods can greatly reduce the manufacturing costs, particularly for large area or high-volume devices.

Finally, many of the proposed applications for organic semiconductors require flexible or semi-flexible substrates. Most commercial devices currently use glass, silicon, or rigid plastic substrates. Further research will need to focus on methods for achieving reliable films on flexible substrates, and on the mechanical robustness of the organic semiconductor material.

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Price/Performance

Much of the interest in organic semiconductors is driven by their potential for lower costs than silicon devices. It's important for proponents of organic semiconductors to remember that silicon technology has doubled performance at constant cost every 18-24 months for more than thirty years. To compete, a lower-cost technology must be able to maintain its advantage in the face of rapid improvements in silicon integrated circuits.

Of the potential applications of organic semiconductors, RF ID tags and displays compete most directly with silicon technology. Because display size is ultimately constrained by human vision, improvements in silicon technology have less impact on display costs. OLED displays offer both cost and performance advantages, and should be able to hold their own in at least some segments of the display market.

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Conclusions

For all of these reasons, electronic packaging should be the most successful of the potential non-display applications of organic semiconductors. As the materials become more capable, toward the end of the 2007 forecast horizon, applications like computerized clothing and electronic luggage tags should begin to emerge.

Development of high efficiency organic solar cells would be the single most important factor in the emergence of ultra-portable applications like electronic textiles. A device that must accommodate a battery pack can easily include silicon circuitry as well. Integrated solar cells would allow organic semiconductor devices to achieve their full flexibility and potential.

Innovation in manufacturing methods is the second key to the success of organic semiconductor devices. As long as these devices require rigid glass or plastic substrates, they will offer only limited advantages relative to silicon. Robust films on semi-flexible substrates like celluloid or highly flexible substrates like Tyvek will help organic devices serve applications that silicon cannot reach.

Manufacturing innovation could also allow organic semiconductor devices to take advantage of the extremely low cost and high volume methods used by the printing and textile industries. Sharp reductions in manufacturing cost are necessary for such applications as computerized clothing, as well as for disposable devices like electronic luggage tags and displays.

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Further information

This article contains information from the forthcoming report, The Future of Organic Semiconductors, which will be published by Pira International in March for £2,750 / $4,400. For more information call Rav Lally on +44 (0) 1372 802 271, or download a copy of the brochure, contents, and order form.

Pira International is an independent publishing house, conference organiser and research organisation specialising in graphic arts, media and technology-led industries. Pira was established over 70 years ago and is based just outside London. Market reports are based on extensive primary research projects and provide customers with quantitative market forecasts and value-added analysis.

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