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Transparent Conductor Markets 2010: ITO and the Alternatives
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Published June 2010 © NanoMarkets, LC

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Transparent Conductor Markets 2010: ITO and the Alternatives

The past year has seen important developments in the transparent conductors arena. While 2009 was a year of risk aversion for the users of ITO and one of delay and reassessment for the makers of alternative transparent conductors, in 2010 the specter of rising indium prices has given the makers of alternative transparent conductors a more focused target on industries that are both in the early stages of emergence and preparing to face performance and cost pressures in the near future. This report thoroughly analyzes the opportunities for these alternative transparent conductors as well as those for ITO to retain and even grow its share in some segments. In particular, we look at the future for ITO in the many applications in which final product prices are expected to decline, while ITO costs are expected to increase. How big a share of the BOM can ITO eat , before OEMs start turning to alternatives. Newer, emerging technologies like OLED lighting and OPV are recognizing that they must adopt new transparent conducting materials—and soon—not only to keep costs in control but also to boost performance and to enhance the flexibility that sets these technologies apart from those they compete with. In addition, the long-standing dissatisfaction of the touchscreen industry with ITO is again taking center stage as touch-screen technologies diverge into high-end and low-end varieties. The low-end touch-screens—mainly analog-resistive ones— continue to face durability issues with the repeated flexing of brittle ITO while cost issues are escalating as ITO returns to higher price points. Meanwhile, at the high-end of the touchscreen market the focus is turning toward improving optical and electrical performance, especially if doing so can provide pathways to lower cost as well. And newer transparent conductors are not limited to the electrodes in displays and touch-screens; they are also beginning to displace other materials for electromagnetic shielding and electrostatic charge dissipation. This is not to say that ITO is on the way out everywhere. Indeed, in ITO’s largest market by far—conventional flat-panel displays, especially LCDs—process conservatism and performance sensitivity will cause ITO to remain the dominant transparent conductor in this huge market, and in the overall transparent conductor market, throughout the eight-year scope of this report. With these considerations in mind, this report provides a new opportunity analysis against the backdrop of the transparent conductor market landscape: ITO, the clear leader in both the largest market—displays—and in applications that are not yet commercial; other transparent conducting oxides (TCOs) that provide cost relief but little else; transparent organic

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conductors that are having a heyday in antistatic and other lower-performance applications; and the expanding field of nanomaterials including carbon nanotubes, graphene, metal nanowires and nanoparticles, and composite materials combining one or more of these materials, sometimes with others like ITO or organics. The report also explores the alternative approaches to ITO deposition, mainly the on-again, off-again efforts toward commercializing ITO inks. This report is required reading for all suppliers of ITO and alternative transparent conductors as well as for firms using transparent conductors—especially if considering a change to a different material or process—and investors in the transparent conductor companies, materials, and technologies. We discuss strategic marketing issues and provide forecasts of the market penetration of each of the transparent conductor classes, as well as discussing the latest activities of the leading and most promising companies working in this field.

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Table of Contents
Executive Summary

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E.1 2010: the slow road to recovery and the impact on transparent conductor markets E.2 ITO’s strongholds: where ITO is assured of a growing market E.3 ITO ceding ground: where alternative transparent conductors will make major inroads E.4 Opportunities for other transparent conducting oxides E.5 Opportunities for transparent organic conductors E.6 Opportunities for nanomaterials E.7 Firms to watch Chapter One: Introduction 1.1 Background to this report 1.2 Objectives and scope of this report 1.3 Methodology of this report 1.4 Plan of this report Chapter Two: New Developments in ITO and Other Transparent Conductors 2.1 Introduction 2.2 ITO and cost: the rebounding market for indium 2.2.1 Is the indium market different now than before the recession? 2.2.2 Will the indium scare return? 2.2.3 Recycling and reclamation of indium and ITO 2.3 Addressing ITO’s flexibility and wastage concerns: alternative deposition 2.3.1 ITO inks and printing 2.3.2 How much indium can be saved? 2.4 Addressing just the cost: other transparent conducting oxides 2.4.1 Tin oxide and coated glass substrates 2.4.2 Zinc oxide and the top of the layer stack 2.4.3 Other TCOs, with and without indium 2.5 Transparent organic conductors as a low-cost, flexible alternative 2.5.1 PEDOT:PSS and performance 2.5.2 Cost trends for PEDOT:PSS 2.6 Nanosilver and other nanometals: metal’s new life as a conductor 2.6.1 From metal grids to random metal networks 2.6.2 Cost considerations with nanosilver 2.6.3 Nanosilver’s performance 2.7 Carbon nanotubes: the prospect of higher performance and lower cost 2.7.1 Limiting the carbon nanotube: making them “just conductors”
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2.7.2 The carbon nanotube cost roadmap 2.7.3 A word about graphene 2.8 Key points made in this chapter Chapter Three: Applications and Markets for ITO and Other Transparent Conductors 3.1 Introduction 3.2 Conventional flat-panel display markets: stuck on ITO 3.2.1 Efforts to introduce different transparent conductors 3.2.2 What will it take to displace ITO? 3.3 Newer displays: e-paper, OLEDs, and the promise of flexibility 3.3.1 Where e-paper stands with regard to transparent conductors 3.3.2 The elusive goal of flexibility 3.4 Touch-screens: increasing demands on transparent conductors 3.4.1 Analog-resistive touch-screens and the durability issue 3.4.2 Analog-resistive touch-screens and the cost issue 3.4.3 Distributed-capacitive touch-screens: where transparency and conductivity rule 3.5 Photovoltaics: ITO on the way out 3.5.1 Thin-film silicon and the ongoing exodus from ITO 3.5.2 OPV and DSC: what will replace ITO, and will it matter? 3.5.3 Are alternative FTO and AZO here to stay? 3.6 Solid-state lighting: rapid changes and the impact on transparent conductors 3.6.1 The quest for anything but ITO 3.6.2 When will OLED lighting go flexible? 3.7 Other applications for transparent conductive coatings 3.7.1 Transparent antistatic coatings 3.7.2 Transparent electromagnetic shielding 3.8 Key points made in this chapter Chapter Four: Eight-Year Forecasts for ITO and Alternative Transparent Conductor Markets 4.1 Forecasting methodology 4.2 Alternative scenarios 4.3 Eight-year forecasts of ITO and other transparent conductors by material type 4.4 Eight-year forecasts of ITO and other transparent conductors by application 4.5 Summary of forecasts
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Chapter One: Introduction 1.1 Background to this Report

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The transparent conductor market has been one of drastically changing expectations and only gradual changes, mostly on the outskirts of the markets that use them. Expectations of change were high when indium reached $1,000 per kilogram a few years ago and as demand for ITO showed no signs of slowing. But slow it did, as the recession of 2008-2009 sank demand for televisions and other displays—the main consumers of ITO—and other products that use it. ITO “struck back” in the bad economy and reasserted its dominance in the transparent conductor marketplace, making it seem that the opportunities for other transparent conductors were limited to the fringes of the electronics industry. With increased aversion to risk and a short-term business focus, major users of ITO found other transparent conductors too risky, while ITO’s new, lower pricing also diminished the amount of the savings that could be had. Now that world economies have begun to resume their growth a bit the outlook is a little different for ITO and the alternative transparent conductors. Risk aversion still runs high and there is not too much lengthening of the investment horizon, but it is the “reasonably priced” status of ITO that appears to be slipping away. The prospect of shifting away from ITO is increasingly becoming an opportunity to reduce the cost of manufacturing first and foremost, with other issues taking more of a back seat. Meanwhile, the developers and suppliers of alternative transparent conductors have continued developing their products despite stagnant markets and limited investment. And now some of them have products that are comparable to ITO for some uses and even better in terms of features like flexibility. But in most cases these innovative products are still untested in the commercial marketplace and in the volumes that would make a dent in ITO’s market share. As a result, the stage is set for some of the best opportunities that some ITO alternative firms have ever had for capturing significant shares of the market. 1.1.1 The Cost of ITO: Certain to be Uncertain The cost of ITO is inseparably linked to the cost of indium, which makes up about 75 percent of ITO by weight. A year ago this meant that ITO was almost cheap; indium prices fell to multi-year lows in the depths of the recession. But indium prices have doubled in the past year and users are beginning to remember just how expensive ITO can be—and again focusing attention on its other faults.

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How high will indium prices go? The only certainties are that prices will go upward and that price volatility will return as ITO consumption again reaches the level of supply and as the slow speed of new indium capacity development limits supply’s responsiveness. Indium and ITO price spikes—even if temporary—will make some of the users of ITO more amenable to trying something different, as long as the cost is lower and the performance is comparable. And those firms supplying ITO alternatives will certainly play up indium’s price volatility as a marketing tool. And the opportunities are real. Indium’s uncertain pricing is just one aspect of the cost of ITO. ITO films are produced by sputtering, a costly process that involves high energy consumption, high vacuum, and expensive equipment. And the ITO sputtering targets that form the films are high valueadded items. Furthermore, only 15 percent-30 percent of an ITO sputtering target ends up in the film; the rest becomes scrap and buildup on sputtering chamber walls, which may or may not be reclaimed. Thus, the opportunities for cost reduction through the use of alternative transparent conductors spread across several fronts. Alternative transparent conducting oxides (TCOs) like zinc oxide and tin oxide often use similar processes but without the cost of indium. In some cases, they also afford opportunities to use somewhat less costly deposition methods such as chemical vapor deposition (CVD). And the variety of transparent inks and coatings including those based on organic conductors, metal nanoparticles, and carbon nanotubes offer the opportunity to use low-cost printing and coating techniques instead of the highenergy, high-cost sputtering used for ITO. Some approaches even use ITO-based inks to take advantage of the lower cost of the printing process and reduced wastage of ITO, but with the goal of producing a familiar ITO film similar to those produced by sputtering. This example points out the fact that these printed solutions need not be less costly in material terms than ITO; the lower cost of printing may compensate for even modestly higher materials costs. 1.1.2 The Alternative Transparent Conductors: Trying Again While NanoMarkets considers cost reduction the primary opportunity in substituting for ITO, the firms that develop and produce alternative transparent conductors are certainly focused on the various aspects of performance. And there has been progress in the past year, even as the worldwide economy restrained demand and outside investment in these technologies. Nanosilver inks and carbon nanotube films now claim varying levels of suitability—based on transparency and conductivity—for the different types of transparent conductive applications. And all of the ink formulations claim flexibility; even sputtered films sometimes claim a level of flexibility although this is not much different from ITO, which is a little bit flexible simply because the film is so thin. Each of the alternative transparent
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conductive materials classes presents its own opportunities, but also raises questions about those opportunities; these questions, which are identified below, are addressed in the main body of this report. Zinc oxide and tin oxide have continued to grow their share of the thin-film and organic photovoltaics market, partly due to higher-cost players curtailing or even abandoning operations and partly because of conscious efforts to change processes. Because these materials merely reduce the cost of materials and do not provide appreciable improvements in flexibility or gains in performance—they typically perform slightly below ITO—they represent opportunities mainly for rigid, cost-sensitive applications. But do these represent a “drop-in” solution to the high cost of ITO that raises opportunities for replacing ITO in the more risk-averse applications? Or is even this kind of process change too much of a risk? PEDOT:PSS as the premier transparent organic conductor is already widely used as an antistatic coating and as an intermediate layer in organic photovoltaics—though not yet widely as an electrode material. But the producers of PEDOT:PSS continue to work on improving formulations for greater transparency and conductivity as they target the more demanding applications. As an organic material itself, will PEDOT:PSS continue to have special appeal to OLEDs and other organic electronics? Or will its performance remain relatively low and limit it to the less demanding applications where it already enjoys significant market share? Nanosilver and nanocarbon inks have billed themselves as materials that could eventually outperform ITO in terms of transparency and conductivity. This is because silver is the most conductive of the metals; silver and even copper grids can already perform comparably to ITO in some applications, as CDT has been one of the latest to demonstrate this with its ITO-less OLED light. And carbon nanotubes, some of them anyway, are even more conductive than silver. There is also no disputing the flexibility that these materials can provide. Will these materials really provide the seemingly broad opportunities for ITO replacement that their developers claim, or do they instead represent niche materials that bring with them as many drawbacks as they do benefits to transparent conductive applications? 1.1.3 The Applications: Will They Stay with ITO or Switch to an Alternative? In this report, each of the major electronics applications for transparent conductors is analyzed in terms of its likely use of transparent conductors as well as the opportunities available for firms either in the segment or supplying to it. And this is not always as straightforward as it might seem; some of the conventional wisdom regarding industry segments and their behavior with respect to ITO and its alternatives has been turned on its
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head in the past year. For instance, because of the longtime focus of the organic electronics industry on non-ITO electrode materials, it has widely been assumed that among the photovoltaics technologies OPV would easily have the most interest in non-TCO transparent conductors while the inorganic thin-film PV technologies would basically ignore them. But a CIGS player, Ascent Solar, has initiated work with Cambrios to develop nanosilver materials as the transparent electrode for PV cells. For the conventional display industry, the question is when will the need for lower costs outweigh the aversion to process risk. All of the alternative transparent conductors have eyes on conventional displays—even if they don’t make it their main focus—simply because it is such an enormous market. The opportunity to capture even a small segment of this market could yield returns far beyond the initial revenues generated; successful implementation of an alternative to ITO in LCD displays would lower the level of perceived risk in doing so among other manufacturers. Other kinds of displays provide more immediate opportunities to suppliers and developers of alternative transparent conductors. Touch screens use additional layers of ITO thus making them more sensitive to the cost of ITO, and some types even require flexing of the ITO layer, which has lead to cracking and reliability issues. Naturally these characteristics open opportunities for transparent conductors that offer lower cost and greater flexibility. E-paper displays and other potentially flexible displays also bring with them the need for flexibility—an opportunity for transparent conductor suppliers—and the types of applications that such displays are proposed for are also sensitive to cost. OLED lighting is something of a wildcard in the transparent conductors market. The first products were brought to market using ITO and because they are still extremely expensive, the cost of ITO is not yet a major issue for these products. But the OLED lighting industry has been a major driver in the development of alternative transparent conductors. Will OLED lighting stay with ITO as long as possible or does it present immediate opportunities for ITO substitutes? These questions are addressed in this report. Then there are the two categories of applications where ITO is already both out of favor and losing market share. These are thin-film photovoltaics—where the other TCOs have taken the dominant position—and the less “glamorous” applications such as antistatic coatings and electromagnetic shielding. Applications that need to be transparent they generally use less costly options; PEDOT and other organic conductors are common for antistatics while fine metal grids are often used for shielding. 1.2 Objectives and Scope of this Report

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The purpose of this report is to examine the opportunities available for ITO and for each of the kinds of transparent conductors discussed above, as they relate to the relevant electronics applications. Conversely, this report also analyzes the opportunities for each of the application areas in terms of using ITO or other transparent conductors or of changing how the materials are used. As this is a new version of a report we have produced in the past, there is an emphasis on what is new and what has changed since the last version was published. The analysis of the opportunities that relate to the materials that enable high-technology devices—a category that certainly includes ITO and the other transparent conductors covered in this report—has been a unique advantage of NanoMarkets’ reports and that analysis is included in this report along with coverage of the applications markets themselves to point out the nature of the opportunities and the reasons for them. The classes of materials that are considered for transparent conductive applications have not changed much in the past year. We still cover ITO in its “classic” sputtered form and as deposited by other methods, including printing, that are intended to provide more flexibility, reduce wastage, ease deposition, or provide other benefits. Also covered are other transparent conductive oxides, transparent organic conductors (PEDOT), nanosilver and other nanometals, and carbon nanotube-based transparent conductive coatings. The applications for transparent conductors are also basically the same ones we have covered before, although real developments in these markets have influenced our coverage of them. These applications include: conventional flat-panel displays, including LCDs, plasma displays, and OLED displays; touch-screen displays; “flexible” displays in which we include epaper and yet-to-emerge flexible OLED displays; thin-film photovoltaics; solid-state lighting; and other coating applications. OLED lighting has changed quite a bit in the past year and our coverage has been adjusted accordingly. Touch-screen displays are undergoing an evolution that affects the materials choices as projected-capacitive screens (a la iPhone) supersede analog-resistive screens (a la PDAs). Sadly, “flexible” displays haven’t changed much; flexible e-paper as anticipated in Plastic Logic’s Que e-reader is still bound within the same rigid cases and the reader itself is still not available. One of our goals in covering the markets for ITO and other transparent conductors is to provide detailed forecasts of the markets for them. Forecasting for these materials is difficult in the current environment; uncertainty extends not only to the quantities of the devices that will be shipped but also to the pricing of ITO and the other materials and the impact that broader market events will have on all of these variables. While it is agreed that the worldwide economic recovery has begun, the nature of a recovery after such a deep recession
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is highly uncertain and it is far from clear that the economy will grow at anything like its historically normal pace any time soon. Despite the difficulties and uncertainties involved, we have made our best determinations to quantify and forecast the markets for ITO and its alternatives. In Chapter Four, we will explain in more depth our forecasting methodology, our approach to these uncertainties, and alternative scenarios we have considered in making the forecasts. This report is international in scope. The forecasts herein are worldwide forecasts and we have not been geographically selective in the firms that we have covered in this report or interviewed in order to collect information. 1.3 Methodology of this Report The information for this work is derived from a variety of sources, but principally comes from primary sources, including NanoMarkets’ ongoing interview program of technologists, business development managers, and academics involved with emerging electronics of all kinds, including the application areas covered in this report. We also drew on an extensive search of the technical literature, relevant company Web sites, trade journals, government resources, and various collateral items from trade shows and conferences. Some of the historical and background information has been used in our last version of this report, “Indium Tin Oxide and Alternative Transparent Conductor Markets” published in April 2009. In addition, some of the developments in terms of applications and materials have also been reported in other recent reports including “Opportunities in Carbon-Based Inks, Pastes, and Coatings for Electronics Applications: 2010” from February 2010, “OLED Lighting Products and Market Strategies” from March 2010, “Materials Markets for Inorganic Thin-Film Photovoltaics: 2010” from December 2009, and “Silver Inks and Pastes: 2009 to 2016” from November 2009. Where information has been used in an earlier report, it has been reinvestigated, reanalyzed, and reconsidered in light of current developments, and updated accordingly. The forecasting approach taken in this report is explained in more detail in Chapter Four, but the basic approach taken here is to identify and quantify the underlying needs and markets that are served by transparent conductors; consider the specifics of the applications and the types of products available or under development; and assess the competitive landscape to determine the suitability and likely volume of each of the transparent conductor types over the next eight years. The stated plans of the key firms are of course of special interest, although NanoMarkets critically considers these claims in light of all available data.

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1.4 Plan of this Report

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In Chapter Two, we discuss ITO and the other transparent conductor materials including an analysis of their relative strengths and weaknesses, recent developments that are relevant to the market, and the strategies and prospects for achieving significant market penetrations. In Chapter Three, we analyze the applications that use ITO and other transparent conductors, covering the competitive landscape between ITO and the other materials, the unique needs of each of the application areas, and the strategies that will produce the greatest opportunities for growth and new revenues. Finally, Chapter Four contains our eight-year forecasts of the markets for ITO and alternative transparent conductor markets.

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