Will OLED lighting disrupt or disappear?

OLED lighting technology has faced a difficult challenge in the form of inorganic LEDs. The challenge was that LED lighting got there first and leveraged its accumulated production experience to improve performance and reduce costs. This created a large gap between the two technologies that shows no signs of narrowing.

The OLED lighting industry generally had a confused commercialisation strategy. The LED incumbents viewed OLED technology as a threat and, as such, invested to hedge their bets. Some ignored the potential uniqueness of OLED lighting and trapped themselves in the rigid (glass-based) and/or high-power corner of the markets.

Unsurprisingly, this led to failures and disillusionment — many simply gave up and now few committed players remain active in the market. Most notable amongst them are LG Chem and Konica Minolta and both see OLED lighting as a way into the immense prize that is the lighting market.

IDTechEx Research anticipated these trends and developments in its market research report ‘OLED Lighting Opportunities 2015–2025: Forecasts, Technologies, Players’, which highlighted consolidation, confused commercialisation strategies and the limited short-term market prospects of OLED lighting technology. Indeed, in 2014, the company forecast that the market would be smaller than $80m by 2018 and it still believes that this will hold true.

Modelling around the anticipated price evolution of OLED panels proved to be correct and in 2013 it was aniticipated that the production cost would be reduced to around $200/klm by 2015. This was confirmed when LG Chem announced a very aggressive sales price of $200/klm in mid-2015 and IDTechEx’s model enabled the company to conclude that the panels were being sold at or below cost in order to stimulate the market.  

What does the future hold for OLED lighting?

IDTechEx also forecast that OLED lighting would reach more than $1.8 billion in 2025 (at the panel level) and the company still remains optimistic about the long-term prospects of this technology. This is because OLED lighting exhibits key characteristics of a disruptive technology: it underperforms and is overpriced when measured on the standard industry figures of merit such as lm/W and $/klm, but it can create new markets that value novel figures of merit such as large-area emission, light weight and flexibility. 

IDTechEx believes that OLED lighting can exploit these differentiators to cultivate a series of niche markets and use its accumulated industry experience to become good enough in an increasingly series of established segments.

This process will be helped by two fundamental characteristics of the lighting market: enormous product diversity and the importance of aesthetics. This is in contrast to, for example, the photovoltaic market, where there is little product diversity and therefore emerging technologies as OPVs find it exceedingly hard to create niches. 

IDTech Ex believes that the future will depend on whether the believers will keep faith through this period of disillusionment.

Image credit: ©Eric Simard/Dollar Photo Club