Liquid-crystal displays (LCDs) are the technology of the day for the flat-panel screen industry, but they may be facing a challenge from the still developing technology of organic light-emitting diodes (OLEDs).

	FLEXIBLE Industry watchers say there is a lot of potential for plastic organic light-emitting diode displays such as this one, made by DuPont. DUPONT PHOTO

The market for LCDs is worth billions of dollars, and many chemical suppliers are rallying behind the emerging OLED technology because of its huge promise. However, most experts in displays say it will be many years before the two platforms truly rival each other.

LCD volumes have increased during 2001, though prices have tumbled, according to David E. Mentley, senior vice president at display consultancy Stanford Resources/iSuppli. The value of the market will decline to an estimated $20.5 billion this year from $22.5 billion in 2000. The replacement of cathode-ray tubes in the desktop monitor market drove LCD growth this year, whereas the notebook computer segment weakened.

Mentley says the economy wasn't the only culprit behind the industry's poor performance. Overcapacity, he says, has put display producers in a position where many are losing money on every display they produce. Prices are down as much as 50% from 2000. "[Display makers] have brutally competed with each other for the past 10 years," he says. "They spent billions on capacity to make large panel displays." He expects the market to bounce back next year.

Jürgen Gehlhaus, vice president of Merck's LCD division, which makes liquid-crystal components and mixtures of liquid-crystal components used in displays, expects Merck's sales of liquid crystals to be flat in 2001, after increasing by 70% in 1999 and 80% in 2000.

For Merck, Gehlhaus says, the problem is that volumes have been weak while prices have been steady. Liquid-crystal makers aren't under much pressure to lower prices because only about 300 mg of material is used per display. "Liquid-crystal material is only a tiny part of the total display," he says. "If they squeeze the price down by 15%, they would get about the same results that they would if they were to increase yields by 1%."

Gehlhaus compares the liquid-crystal business to the pharmaceutical fine chemicals business, where manufacturers make small batches of material that are specific to particular customers. "The synthesis is as complicated as the kind used in pharmaceutical active ingredients," he says, noting that a single component in the mixture can require 10 manufacturing steps. The volume of the batches can range from 10 to 200 kg.

Gehlhaus expects business to bounce back soon. In fact, Merck is expanding capacity at its Darmstadt, Germany, plant. He says the new output will be focused on liquid crystals for thin-film transistor (TFT) displays. These are high-quality displays used in monitors that are replacing older technology. He expects TFT demand to triple over the next four years.

OLED technology is also gaining momentum in flat-panel displays. These materials work on the same principle as conventional inorganic light-emitting diodes: The material emits light when an electric current is applied to it.

There are two types of light-emitting diodes. The more developed form is known as the small-molecule light-emitting diode; much of the pioneering work in this field was done by Kodak. The other form is called the polymer-based OLED; much of the groundbreaking work in this area is being done by DuPont, Dow Chemical, Covion, and Cambridge Display Technology.

INDUSTRY OBSERVERS maintain OLEDs have a number of advantages over LCDs in flat-panel displays. They are said to have a brighter image that can be viewed from wider angles than LCDs. In addition, developers say OLEDs require less power than the LCDs used in desktop and laptop monitors.

Rob Spurling, global director of Dow's display technologies group, predicts the appearance of OLED displays will be a key to their success. "The images just jump off the screen," he says. "And it is this type of factor that sells displays."

Another potential advantage, many say, is in manufacturing. OLEDs may lend themselves to techniques like ink-jet printing onto flexible plastic substrates, potentially a huge advantage over the intricate layering of different materials used in LCDs.

Olaf Gelsen, technical marketing manager for Covion, explains that flexible substrates would allow manufacturing of rolls of OLED displays, almost like a printing or coil-coating operation. This, he notes, is specific to polymer-type OLEDs, where work is being done on such processes. "People see advantages in polymer technology that might be an advantage on the processing side," he says.

However, Merck's Gehlhaus says OLED developers have a lot of bugs to work out before their platform becomes competitive with LCDs. "This technology still has to prove it's competitive in terms of quality," he maintains, pointing to what he says are numerous problems with manufacturing and chronic color degradation.

In addition, Gehlhaus points out that OLEDs' low power consumption is an advantage only over backlit LCDs, like those used in laptops, and not displays lit by ambient light such as those in cell phones. "The LCD itself almost consumes no power because it relies on a true field effect," he says. "Until 2005, at least, there will be no real competition."

According to Kimberly Allen, director of technology and strategic research at Stanford Resources, there have already been a few commercial introductions of OLED displays, including a Pioneer car stereo and mobile phone displays from Pioneer and Samsung-NEC. She says several new OLED products are expected to be released during 2002, and active matrix displays for cell phones and personal data assistants will begin in 2003 and 2004.

Allen values global sales of OLEDs in 2001 at $84 million, growing to $1.6 billion in 2007. She agrees, however, that the technology has a way to go before it succeeds. "Things are starting off a little slowly," she says, noting that because the format is new, manufacturing reliability needs to be improved. "The devil's in the details. But there has been a lot of investment in production, and I'm sure it is going to happen for OLEDs."

That's what many chemical companies are betting will happen, as shown by recent investment in the new format. For example, last month DuPont bought a minority interest in technology developer Cambridge Display Technology. The companies also agreed to share intellectual property.

Stewart Hough, vice president of business development for Cambridge Display, boasts that his firm has an important intellectual property position in polymer OLEDs. "Any long-chain polymer that admits light is covered under a [Cambridge Display] patent," he claims.

Hough says that Uniax, which DuPont purchased last year, was granted a Cambridge Display license to make small displays from polymer-based OLEDs. DuPont inherited the license with the acquisition and wanted to expand it.

The two companies saw an opportunity to combine their intellectual property positions so future licensees had to go to only Cambridge Display for a license. "We wanted to consolidate the intellectual property to make it easier for future licensees," Hough says.

Avecia is also making a significant investment in OLEDs by buying out partner Celanese's 85% stake in Covion. Explaining the purchase last month, Avecia noted OLEDs' growth potential, Covion's pipeline of development projects with 25 other companies, and the firm's experience with ink-jet printing techniques.

Covion sees itself as a supplier of light-emitting small-molecule and polymer materials, such as poly(p-phenylene vinylenes), to display manufacturers. The company recently invested $5 million to expand its Frankfurt, Germany, site, to a capacity for the materials of 40,000 L. Covion's Gelsen says this is enough for the next several years.

Covion considers itself more than just a chemical supplier, however. "We customize the formulas for each customer, depending on application," Gelsen says. It is a pretty typical specialty chemicals business, he adds. "It's somewhere between the involvement you need for liquid crystals and that of photoresists." The company, he notes, is also engaged in improving performance and nurturing new processes for OLED use, such as in ink-jet printing.

Dow--which is shaping up as a competitor to Covion--has established what it calls its "beachhead into the OLED industry" through its polyfluorene technology. The company has introduced a green-emitting polymer and teamed up with Taiwanese display maker Delta Optoelectronics last year to bring polyfluorene-based displays to the marketplace.

Dow's Spurling says Delta's efforts to market displays for handheld devices are going smoothly. "Delta was our first customer, and they are doing extremely well at developing products for the marketplace," he says.

Anticipating strong demand, Dow is tripling capacity for OLED materials at its Midland, Mich., plant. The project will be completed in the middle of next year.

However, Dow sees itself as being more than just a materials supplier in OLEDs. It also plans to develop technology with customers and will leverage its intellectual property position. "In many instances, participation can be more than just filling discrete orders for material," Spurling says. "But in other instances, it will only be discrete orders."

To that end, the company is continuing materials development. Later this year, the company will introduce a red material, and next year it will release a blue-emitting polyfluorene.

With the addition of blue, Spurling says, Dow will have full-color capability in polymer OLEDs. The trick in developing blue, he says, has been to come up with a material that has an operating life beyond 2,000 hours.

Chemical companies have been working on the small-molecule side as well. Last year, PPG Industries signed an agreement with Universal Display Corp. to further develop and market Universal's small-molecule phosphorescent materials, including ones based on iridium and platinum. "We are beginning to distribute evaluation quantities of materials, and we will have commercial quantities available next year," says Janice Mahon, vice president of technology commercialization at Universal.

Mahon downplays the potential advantage in manufacturing that polymer-type OLEDs might have over small molecules if the ink-jet technologies pan out. Overall, she says, small molecule is the more developed technology and, so far, has the majority of commercial applications. "In the long run, we will find that small molecules and polymers both have applications in the marketplace," she says.

The same is true for future competition between OLEDs and LCDs, says Stanford Resources' Allen. Despite the image, she observes, change doesn't always occur quickly in electronics--and particularly in displays. "People have been saying for 20 years that the cathode-ray tube is dead," she says. "It's not dead. The same will happen between OLEDs and LCDs."

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