The Flexible Electronics Opportunity (2014)

6

East Asia

Japan, South Korea, and Taiwan are well positioned to enter the field of flexible electronics and to dominate some of the emerging commercial applications. They have numerous large industrial groups with extensive manufacturing capabilities in sectors directly relevant to the production of flexible electronic devices, including microelectronics, optoelectronics, printing, electronic materials, photovoltaics, and displays. All three have developed increasingly strong research capabilities relevant to flexible electronics in government laboratories, universities, and company research and development (R&D) centers, and they are demonstrating that technological gaps can readily be filled by acquisition of technology abroad. With close government support, companies based in these countries have become adept at moving new technologies from the laboratory to the market quickly and efficiently. Moreover, China has developed a robust indigenous liquid crystal display (LCD) industry which it is using to leverage market entry in organic light-emitting diode (OLED) displays, albeit with a limited domestic supply chain and research base.

Past promotional efforts in the East Asian countries have established a strong foundation for the development of flexible electronics. Large-scale government-backed R&D efforts in semiconductors, optoelectronics, photovoltaics, new materials, and nanotechnology have ensured that with respect to the “convergence technology” of flexible electronics, Korea, Taiwan, and Japan have highly developed capabilities with respect to the major converging fields.

SOUTH KOREA

South Korea enjoys an established industrial base, supply chain, and extensive know-how and intellectual property associated with the manufacture

of displays, representing a major advantage in the emerging field of flexible displays. The Samsung and LG groups are world leaders in the production of displays and both companies have already commercialized OLEDs, which will play a significant role in many flexible electronics applications. Samsung is also one of the world’s leading manufacturers of semiconductors. A 2013 analysis of the emerging flexible display market concluded that South Korean companies

The Korean giants have proven nimble competitors, displacing Japanese firms as leaders in displays. Korean manufacturers are sometimes faulted for “lacking unique or original ideas” but are credited with “faster decision-making and a greater willingness to take risks with unproven ideas.”²

The sheer scale of recent commercial successes by Korean electronics groups such as Samsung and LG sometimes obscure the fact that South Korea has some areas of potential weakness as it seeks to develop into a leader in flexible electronics. It is comparatively weak in basic and fundamental research.³ The country’s science establishment is criticized for being overly bureaucratic, stressful, and unrewarding for researchers, and too focused on short-term results.⁴ Small- and medium-sized enterprises, the principal source of innovation, are widely seen as making an inadequate contribution to the Korean economy, which may or may not reflect

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¹ HSBC Global Research, Flexible Display: Fantastic Plastic—A Shape-Shifting Game Changer, April 2013, 3.

² “South Korean Electronics Companies Are Beating Japanese Competitors to the Punch in Getting Cutting Edge Technologies Developed by Japanese Researchers into Their Product Ranges,” Asahi Shimbun, July 9, 2010; “CES Reveals Korea’s IT Firms Are Lagging Their Rivals,” Chosun Ilbo Online, January 12, 2010.

³ Changhee Lee, Seoul National University, “Flexible and Printed Electronics—A Korean Initiative,” September 24, 2010.

⁴ In 2012, a survey of 293 scientists in Korea and 226 scientists of Korean descent living in the United States found that 72 percent of the Korea-based scientists indicated they would leave Korea if the opportunity arose. Sixty-six percent of Korean scientists living abroad said they wanted to go back to Korea but “low pay and a poor research environment keep them abroad.” When asked “what do you think of Korean science and technology policies?” 79 percent of Korean and 67 percent of Korean-American scientists responded “poorly” or “very poorly.” The most prevalent complaints were “an environment to where it is difficult to advance in research, unrealistic research fee regulations, bureaucracy meddling in research and a rise in temporary research positions as compared to permanent positions.” “For Scientists in Korea, Careers of Stress, Insecurity,” JoongAng Daily Online, September 24, 2012; A Call for Scientific Reinvention,” JoongAng Daily Online, April 21, 2012.

the dominance of the chaebol.⁵ Materials and machinery for flexible electronics applications are heavily sourced from abroad.⁶ Although flexible electronics is a quintessential “convergence” technology, Korean government support and regulatory oversight of industry has historically been rigidly segmented by sector, leading to obstacles and delays in the introduction of overlapping new technologies.⁷ South Korea’s university system is said to rank “far below Korea’s economic status,” and the country has had difficulty in attracting researchers from abroad. Barriers between academic disciplines have impeded the development of new technologies.⁸

The Korean government’s strategy in flexible electronics has been to support research on the core technologies in the field (OLEDs, LCDs, e-paper, touch panels, flexible PCBs, RFIDs and organic photovoltaic cells [OPVs]). Support has been extended to equipment and materials suppliers, including small- and medium-sized enterprises. Weaknesses in fundamental research are being addressed through international collaborations.⁹ In March 2011, Korea enacted the Industrial Convergence Promotion Act, effective in September 2011, to speed regulatory approvals for new products based on convergence technologies.¹⁰

Convergence Technology Initiative

In early 2011, South Korea’s Ministry of Knowledge Economy announced a $1.4 billion plan to propel Korea into the “league of top five international

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⁵ “Non-Chaebol Firms Losing Ground to Chaebol in S. Korea,” Yonhap, July 3, 2013. Korean SMEs are said to suffer from the “Peter Pan Syndrome,” unwilling to grow beyond a certain size and forfeiting an estimated total of 160 benefits, including tax credits and deductions and exemptions from regulations available only to SMEs. Mid-sized businesses accounted for only 0.04 of Korea’s 3.12 million enterprises in 2010. “Peter Pan SMEs Loath to Grow UP,” JoongAng Daily Online, January 2, 2013; “Peter Pan Syndrome,” The Korea Herald Online, January 5, 2013.

⁶ “Printed Electronics in Korea,” Printed Electronics World, February 15, 2011.

⁷ In 2004, LG Electronics developed a mobile phone capable of measuring blood sugar level and managing the administration of medication. The company had to abandon plans for commercialization, however, because government regulations categorized the phones as medical devices, giving rise to a prohibitively burdensome approval process. Overlapping regulations and standards have been blamed for delays in the commercialization of Internet TV and Internet telephones (VoIP) in Korea. “Regulation Hindering Technological Advances,” Dong-A Ilbo Online, March 27, 2010. “A Technological Hermit Kingdom,” JoongAng Daily Online, March 23, 2010.

⁸ Comments of Choi-Yang-hee, Dean of Graduate School of Convergence Science and Technology at Seoul National University, in “Korea Needs Change for Convergence,” JoongAng Daily Online, May 23, 2009.

⁹ Professor Changhee Lee, Seoul National University, “Flexible and Printed electronics—A Korean Initiative,” September 24, 2010.

¹⁰ “Korea Needs Change for Convergence,” JoonAng Daily Online, May 23, 2009. In 2011, Seoul National University unveiled 55 interdisciplinary fields in an effort to “break down traditional boundaries between academic disciplines.” “Interdisciplinary Studies,” Korea Times Online, July 8, 2011. In 2010, Yonsei University was selected by the Ministry of Knowledge Economy as the site of a state-funded program to train IT scientists modeled on MIT’s Media Lab, a “world class media convergence technology research center.” Dong-A Ilbo Online, August 26, 2010.

technology power houses” by 2020. The centerpiece of this plan is the promotion of six so-called “convergence technologies” that are expected to generate sales of $330 billion by 2025, or about one-third of the country’s gross domestic product (GDP) in 2010. Four of these are directly applicable to flexible electronics:

• Transparent flexible displays and related application products;
• Neuro tools that fuse information technology with neurology and nerve medical devices;
• Graphene materials and parts; and
• Super-fine print electronics manufacturing systems.¹¹

The plan was developed by a team headed by Hwang Chang-gyu, former President of Samsung Electronics, and Minister of Knowledge Economy Choi Joong-Kyung.¹² The government reportedly plans to launch a “huge” printed electronics development fund with some matching investments by industry.¹³

The government is arranging extensive financial support for private companies that enter high-technology convergence industries and other designated sectors with $6 billion worth of loans, guarantees, and other forms of financial support:

• The Ministry of Trade, Industry and Energy (MOTIE) announced in 2013 that it would invest $42 million over the next 6 years for commercializing graphene applications in the information technology (IT) sector.¹⁴
• The government Ministry of Knowledge Economy (now MOTIE) committed in 2010 to provide $875 million, to be matched by private-sector funds, to develop 10 “World Premier Materials” for industrial use, including substrates for flexible displays.¹⁵
• The Korean Printed Electronics Association told a visiting foreign delegation in 2012 that “the South Korean government wishes to invest $48 million in printed electronics over the next six years,” primarily for R&D.¹⁶
• In 2013, the Chairman of South Korea’s Financial Services Commission said that the government, “public financial support organizations,”

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¹¹ The other two convergence technologies to be fostered are offshore plants to industrialize deep sea resources and compact multipurpose module nuclear reactors.

¹² “Korea Hones in on Growth Engines,” JoongAng Daily Online, March 22, 2011.

¹³ “Printed Electronics in Korea,” Printed Electronics World, February 15, 2011.

¹⁴ “S. Korea to Spend 40 Mln USD on Graphene Development,” Xinhua, May 21, 2013.

¹⁵ “S. Korea Launches Project to Develop New Materials,” Yonhap, September 30, 2010; “Samsung, LG, Hyundai Motor Join Hands for Next Generation Flexible Display Development,” MK English News Online, July 5, 2010.

¹⁶ “IDTechEx Visits South Korea,” Printed Electronics World, April 18, 2012.

TABLE 6-1 Korean Flexible Electronics Development Programs

The new promotional effort builds on flexible electronics development programs that are well under way in Korean government laboratories and a number of companies. (See Table 6-1.)

Government Entities Supporting R&D

Historically, responsibility for Korea’s science and innovation policy has been divided between a number of competing ministries in a manner that was “sometimes unhelpful to Korea’s drive to improve its S&T and innovation performance.”¹⁸ Recent consolidations have been implemented that may address this problem, with most key functions now located within the Ministry of Trade, Industry and Energy (MOTIE) and the Ministry of Education, Science and Technology (until 2008 known as MOST).

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¹⁷ “$5 Bn to Pour Into SMEs in Next 3 Yrs,” MK English Online, May 23, 2013.

¹⁸ Organisation for Economic Co-operation and Development (OECD), OECD Reviews of Innovation Policy: Korea 2009, 2009, 180.

Ministry of Trade, Industry and Energy (MOTIE)

In 2013, the Ministry of Knowledge Economy (MKE) was renamed the Ministry of Trade, Industry and Energy (MOTIE), with jurisdiction over industrial and energy policy and foreign trade and investment.¹⁹ In 2009, MKE unveiled an $870 million plan to promote Korean development of “10 World Premier Materials (WPM)” by 2010, helping Korea develop into a “global parts and components powerhouse, increasing the value of parts/components exports from the 2008 level of $180 billion to $500 billion by 2018. In addition to R&D support the WPM effort financially supports mergers and acquisitions between Korean and foreign materials companies.²⁰ One of the 10 materials being developed is substrates for flexible electronics displays.²¹ MOTIE is also responsible for developing and implementing the massive R&D effort involving six convergence technologies that was announced in the spring of 2011.

MOTIE is concerned about Korean companies’ heavy dependence on imported production equipment—Samsung and LG, for example, procure most of their semiconductor manufacturing equipment abroad, particularly from Japan.²² In 2009, MOTIE started a program to provide R&D support to Korean companies to develop indigenous equipment, including machinery for “growth engine” technologies with implications for flexible electronics, such as the production of light-emitting diodes.²³

Ministry of Education, Science and Technology (until recently, MOST)

The Ministry of Education, Science and Technology (until 2008 the Ministry of Science and Technology) coordinates Korea’s science and technology activities. It provides support for university-based research on flexible electronics themes.

Public Research Institutes

During the developmental phase of Korea’s economy in the 1960s and 1970s, the country lacked the infrastructure for innovation with industrial and commercial applications. In response the government established the Korea Institute of

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¹⁹ “Seoul’s Commerce Ministry to Change Name With Added Role,” Yonhap, March 22, 2013.

²⁰ “Govt. to Invest $1 Trillion Won to Develop Premier Materials,” Asirang News, November 16, 2009.

²¹ Gye-man Kang and Hyung-deuk Jean, “Samsung, LG, Hyundai Motor Join Hands for Next Generation Flexible Display Development,” MK English News Online, July 5, 2010.

²² “Korea can aptly be described as a semiconductor powerhouse. In producing the world’s best products in the sector, however, the country imports most of the manufacturing equipment needed for semiconductors.” “Korean Company Arrives to Compete in Extremely Touch Sector,” Dong-A Ilbo Online, March 8, 2013.

²³ “Equipment Industry is Crucial to Growth,” The Korea Herald Online, August 17, 2009.

Science and Technology (KIST) in 1966 as a technical center to assist Korean companies to adopt and utilize foreign technologies. The government continued to open new specialized public research institutes relevant to key industries the government was seeking to foster, including electronics, telecommunications, chemicals, and energy. These centers played a key role in adapting and disseminating foreign technologies to local industry, as well as functioning as training centers for research personnel who migrate to jobs in industry. In the 1980s these institutes were consolidated and began to engage industry in collaborative research projects relevant to national economic development. The public research institutes are funded by government core grants that cover roughly half their budgets, with the remainder of their revenue derived from contract research for industry, government ministries, and local governments.²⁴

Korea Electronics Technology Institute (KETI)

KETI was established in 1991 as a government-funded research institute under the supervision of the Ministry of Commerce, Industry and Energy (MOCIE), now the Ministry of Knowledge Economy. Seventy percent of KETI’s funding is provided by the government and 30 percent by the private sector. KETI promotes the development of new technologies in electronics, telecommunications, and information technology. KETI provides support to small- and medium-sized enterprises and operates a business incubator. KETI’s research divisions and centers are pursuing a number of research themes with potential applications in the field of flexible electronics. (See Table 6-2.)

KETI administers the Korean Printed Electronics Center (KPEC), established in Jeonbok in 2009 to promote development of nanolevel printed/flexible electronics. KPEC represents an investment of $75 million, with $21 million invested in state-of-the-art production equipment. KPEC is concentrating on providing process, equipment, and characterization services for R&D by industry, government, academia, and industrialization. It is pursuing printed/flexible electronics themes that are expected to have applications in organic lighting, digital signage, automotive sensors, solar cells, and intelligent windows.

Korea Institute of Science and Technology (KIST)

KIST was established in 1966 jointly by the governments of South Korea and the United States to perform R&D to support Korea’s economic growth, by developing technologies with industrial applications. Today, KIST is Korea’s foremost science and technology institution. KIST has been promoting development manufacturing technology for flexible transistors for a number of years.²⁵

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²⁴ OECD, OECD Reviews of Innovation Policy.

²⁵ In 2007, in a collaboration with MIT, a team of KIST engineers succeeded in making a “low-voltage flexible transistor that could be worn like clothing or used to make wristwatch-style mobile

TABLE 6-2 KETI Research Themes

A United Kingdom (UK) trade and investment mission visiting KIST in 2012 reported that it was setting up a roll-to-roll (R2R) photo-curing system that had been developed in house.²⁶ The system has been used to demonstrate printing of RFID antennas. KIST was also reportedly researching process technologies for silver nanoparticles, organic photovoltaics, and inkjet printing of thin-film transistors.²⁷

Electronics and Telecommunications Research Institute (ETRI)

ETRI, a government entity, is Korea’s largest research institute and traditionally played a central role in the development of the Korean semiconductor industry.²⁸ In 2010, ETRI researchers developed a flexible nonvolatile memory based

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phones. The new transistor was developed by making a paper-thin polyethylene terephthalate plastic circuit board, which is bendable, inexpensive to produce, energy efficient and safe for the user.” “Transistor Could Lead to Wearable Computers,” Joong Ang Ilbo, October 9, 2007.

²⁶ Photo-curing systems have been utilized by a number of companies engaged in printed electronics. The process is used to cure metallic inks (e.g., silver, copper, copper oxide). The advantage of the roll-to-roll process is that it is fast and can be used with low temperature substrates such as paper. “IDTechEx Visits South Korea,” Printed Electronics World, April 18, 2012.

²⁷ “IDTechEx Visits South Korea,” Printed Electronics World, April 18, 2012.

²⁸ ETRI was a key member of the government-industry consortia that developed Korea’s 256 megabit and 1 gigabit dynamic random access memories. “Taedok to Become Mecca for Venture Firms,” Chonja Sinmun, April 10, 1998.

on memristors, promising electronic circuit elements discovered in 2008 that hold the promise of new types of dense, inexpensive, low-power memory devices that could replace transistors in future computers in a much smaller space.²⁹

National Research Foundation of Korea (NRFK)

NRFK is a quasi-governmental organization established by statute in 2009 that specializes in research funding and management.³⁰ Based in Daejon, it was formed through the merger of the Korea Science and Engineering Foundation, the Korea Research Foundation, and the Korea Foundation for International Cooperation and Science and Technology. It operates under the direction of the Ministry of Education, Science and Technology. Its basic mission is to provide comprehensive support for research in the natural sciences and the humanities, and it funds research at domestic universities with flexible electronics themes.

Korea Institute of Machinery and Materials (KIMM)

KIMM is a government research institute that develops and disseminates source technologies in mechanical engineering and conducts reliability tests. The government provides $54 million of its annual budget of $138 million, with the remaining $84 million derived from KIMMs operating revenue.³¹ KIMM’s Nano-Mechanical Systems Research Division is pursuing a number of research themes directly relevant to flexible and printed electronics:

• Flexible low-cost printed electronics devices technology,
• Flexible low-cost solar cell technology,
• Self-cleaning surface fabrication technique using nature-inspired technology,
• 3-D plotting system for tissue engineering scaffold,
• Ultra-precision machining and forming process for micro/nano features,

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²⁹ “Memristors change their resistance depending on the direction and amount of voltage applied, and they ‘remember’ the resistance when the voltage is removed.” Most memory devices store data as a charge, but memristors would enable a “resistive RAM, a nonvolatile memory that stores data as resistance rather than charge.” Memristors were postulated by Professor Leon Chun at the University of California in 1971. Hewlett-Packard subsequently demonstrated that they exist and developed an understanding of how they operate. To date, memristors have been made using metal oxide thin films. A team led by Sung-Youl Choi, the leader of ETRI’s flexible device research, used thin graphene oxide films to make a memristors-based flexible nonvolatile memory. The graphene oxide devices could be printed on rolls of plastic sheets and used in wearable electronics and plastic radio-frequency identification (RFID) tags. “Flexible Graphene Memristors,” Printed Electronics World, December 9, 2010.

³⁰Law of the Korea Research Foundation, Proclaimed March 25, 2009, Law No. 9518 (June 26, 2009).

³¹<http://www.kimm.ks/english/htm/about_01_t3.php>.

• Micro-/nanoscale machining and fabrication process based on femtosecond laser,
• Fabrication and process development for advanced MEMS,
• Nano-imprinting equipment technology,
• E-beam lithography and nanostamp fabrication technologies,
• Nanoprinting and nanodevices fabrication using nano-imprint lithography,
• E-beam lithography and nanostamp fabrication technologies,
• Nanoscale measurement and analysis,
• Development of thermoelectric device and module,
• Separation and transparent heater of carbon nanotube,
• Mass production and application of quantum dot, and
• Structural analysis and reliability evaluation of nano/micro structures.

KIMM sells technologies that it develops to private companies for a flat fee or for a percentage of revenues generated.³²

Korea Research Institute for Chemical Technology (KRICT)

KRICT is a government-supported research institute for chemical technology. The government directly provides $33.6 million of KRICT’s budget of $75.4 million. KRICT derives $41.8 million of its budget from income from R&D projects, including another $35.7 million in competitive government grants, $4.8 million from the private sector, and $1.3 million from royalties. KRICT’s Device Materials Research Center is pursuing a number of research themes with potential application in flexible electronics:

• Ink materials and processing technology for printable electronics;
• Low-cost/large area printing technologies for organic solar cells;
• Preparation of thin films, coating materials, and nanostructured materials.

In 2010, a team of KRICT scientists reported that they had succeeded in developing a process for using inkjet printing for the deposition of an active layer of polymer-based organic photovoltaic cells (OPVs). The technology could have applications printing OPVs on flexible substrates. The research was funded by a grant from the Ministry of Knowledge Economy’s Fundamental R&D Program for Core Technology of Materials.³³

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³² “Lucrative State-Run Lab Deal Called Model Sale,” JoongAng Ilbo, June 8, 2007. In 2010, it sold nano-imprinting technology for sensors with medical applications to U.S.-based NanoLambda for $80,000 plus 1.6 of all sales of image sensors created with the new imprinting technology. “State-Run Laboratory Export Advanced Nanoimprinting Technology,” Yonhap, March 15, 2010.

³³ “Highly Efficient Inkjet Printed Organic Photovoltaic Cells,” Japanese Journal of Applied Physics, 2010.

Korea Electrotechnology Research Institute (KERI)

KERI is a nonprofit government-funded research institute based in Changwon specializing in electrotechnology and electric power. In 2008, a KERI research team headed by Lee Geon-woang reported that it had developed a new transparent electrode that is bendable and can be applied to thin films to create flexible displays and touch screens. The electrodes were formed by combining carbon nanotubes, binders, stabilization compounds, and other chemicals. The liquid one-component solution can be applied in an R2R process in the form of paste. Lee said that the new manufacturing process can replace the conventional indium tin oxide (ITO) process “and revolutionize designs for touch screens, flexible displays, solar cells and various sensor devices.”³⁴

Industry/Government Consortia

Flexible Display Consortium

In July 2010, three of South Korea’s major industrial conglomerates, Samsung, Hyundai Automotive Group, and LG (Lucky-Goldstar) announced formation of a consortium to develop substrates for flexible displays as one of the World Premier Materials projects sponsored by the Ministry of Knowledge Economy. The consortium’s proposal was submitted to the Korea Evaluation Institute of Industrial Technology (KEIT) for approval. The project involves government funding of $81.8 million. The companies would contribute funds for equipment and facilities. Other participating companies include LG Chem, LG Display, Kolon Industries, Inktec, Samsung Mobile Display, Cheil Industries, and Samsung Electronics.³⁵

Thin-Film Solar Cells

In May 2011, it was announced that Samsung Electronics, LG Electronics, and Dongjin Semichem would participate in a government-industry joint R&D project to “develop next-generation thin film solar cells that can be placed in glass metal or polymer (flexible) substrates.”³⁶ According to the Ministry of Knowledge Economy this effort is one of five major R&D projects that collectively will receive 350 billion won ($328 million) from the government.

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³⁴ “Engineers Create New Transparent Electrodes for Display Screens” Yonhap, March 20, 2008.

³⁵ “Samsung, LG, Hyundai Motor Join Hands for Next Generation Flexible Display Development,” MK English News Online, July 5, 2010.

³⁶ “Samsung, LG to Join Development of Thin Film Solar Cells,” Yonhap, May 31, 2011.

60-Inch Flexible OLED Consortium

In 2012, the Korean government chose LG Display to lead a consortium to develop 60-inch transparent and flexible OLED displays by 2017 as part of the government’s Future Flagship Program.³⁷ The consortium will include Avaco, a maker of equipment for producing displays that reportedly received a $6.7 million order to supply LG with tools and parts for making flexible OLED panels. LG reportedly envisions applications for flexible OLED displays that include home consumer products, windows displaying information at bus stations, and curved displays for retail settings in which displays wrap around columns or dangle from the ceiling.³⁸

Printed Electronics Project

In 2012, the Korea Printed Electronics Association (KoPEA) disclosed plans to launch a national Printed Electronics Project, a $48 million effort running from 2012 to 2017. Funding will reportedly be provided by MOTIE. Tentative technology themes have been identified including OLED lighting, RFID touchscreen displays, digital signage, and flexible printed circuit boards. The project will be led by large companies such as Samsung Electronics, LG Electronics, and POSCO and will include small- and medium-sized companies. Foreign participation is welcome.³⁹

Key Companies

LG Display

LG Display is the world’s largest maker of LCD panels. It was formed through a joint venture between South Korea’s LG Electronics and Royal Philips Electronics NV of the Netherlands and was known as LG Philips LCD Co. Philips sold its stake in 2008, and the company’s name was changed to LG Display.

Samsung Electronics

Samsung Electronics is a major South Korean producer of IT equipment, semiconductors, solar cells, and displays. Samsung Electronics Vice President Hung Wan-pyo said in July 2010 that “Samsung will introduce a smart phone that can be folded just like paper before the year 2015.”⁴⁰ Samsung withdrew from the

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³⁷ “LG Display Chosen by Korean Government to Lead OLED Project,” Printed Electronics World, August 8, 2012.

³⁸ “LG Convinces South Korea to Fund Development of Flexible 60-Inch OLED Displays,” Extremetech, July 17, 2012.

³⁹ “UK Opportunity: Korean Project 2012-17,” Plastic and Printed Electronics, May 1, 2012.

⁴⁰ “Samsung Aims to Introduce Flexible Smartphone Before 2015,” MK English News Online, July 22, 2010.

production of e-paper in 2010, citing cost issues.⁴¹ Samsung was established in 2012 through consolidation of Samsung’s various displays business units.

Cheil Industries

Cheil Industries is a Samsung subsidiary that was established as a textile company in 1954 and that diversified into chemicals (1989) and electronics materials (1994). Annual revenues are about $5 billion.⁴² Cheil is a major supplier of electronic materials to Samsung group companies including materials with flexible electronics applications.⁴³ Cheil entered the OLED business in 2009 and invested $180 million in 2011 in a factory for OLED material production to support Samsung’s Galaxy S4 smartphone.⁴⁴ Cheil has reportedly made progress in developing polyimide plastic substrate and is expected to play a significant role in Samsung Display’s Commercialization of plastic display products.⁴⁵ In April 2013, Cheil was reportedly considering the acquisition of Novaled AG, a German maker of proprietary OLED products.⁴⁶

Samsung Electro-Mechanics (SEMCO)

SEMCO, a member of South Korea’s Samsung Group, developed industrial inkjet printheads and copper ink in 2008. SEMCO was the first Korean company to enter the industrial inkjet printhead market, and its nano-copper ink for printed circuit boards was the first of its kind in the world. The inkjet printhead can be used to print conducting inks onto flexible substrates such as films and textiles.⁴⁷

Korea Kumho Petrochemical Co.

Korea Kumho Petrochemicals is a South Korean manufacturer of electronic chemicals and synthetic resins and rubber. In 2009, it announced plans to build a plant to manufacture carbon nanotubes, which are being used as conductors in

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⁴¹ “Samsung Electronics Halts E-Paper Production,” Yonhap, August 23, 2010.

⁴² Cheil’s CEO, Park Jang-woo, previously headed the Digital Media Division at Samsung Electronics and Samsung Electro-Mechanics. Cheil’s Vice President Lee Seo-hyun is the daughter of Samsung Electronics Chairman Yi Kun-hee. “Cheil Is Into Electronics, Chemicals, Fashion,” Joong Ang Daily Online, March 28, 2012.

⁴³ Cheil makes “electronic or plastic parts that are crucial in producing the major finished products by Samsung Electronics and other Samsung-affiliated companies.” Choi-Ji-wan, NH Research Center, cited in “Cheil Is Into Electronics, Chemicals, Fashion,” Joong Ang Daily Online, March 28, 2012.

⁴⁴ “Cheil Industries Celebrates Shipment of Amoled Displays,” Joong Ang Daily Online, April 3, 2013.

⁴⁵ HSBC, Flexible Display.

⁴⁶ “Samsung Group Unit Cheil Ind Considering Buying Novaled AG,” Financial Express, April 2, 2013.

⁴⁷ “Samsung Electro-Mechanics Launching Industrial Inkjet Business,” Printed Electronics World, April 1, 2009.

a number of flexible electronics technologies. The plant, to be located in Jeonju, is expected to achieve an output of 300 tons by 2013.⁴⁸

Hanwha Chemical

Hanwha Chemicals, a member of the Hanwha Group, is a South Korean petrochemical enterprise that produces polyethylene products, PVC resins, solar cells, anodic materials for batteries, and pharmaceuticals (including biosimilars). In 2008, the company indicated that it had started mass production of carbon nanotubes at a plant in Inchon. “The plant has the capacity to produce 100kg of single-walled carbon nanotubes and four tons of multi-walled carbon nanotubes.”⁴⁹ The company indicated it would invest $78 million in carbon nanotubes for 2013. Hanwha acquired Iljin Nanotech Co., a Korean carbon nanotube producer, in May 2008. In 2011, Hanwha acquired a 19 percent equity stake in U.S.-based XG Sciences, a U.S. manufacturer of graphenes.

University R&D

South Korea’s university system has been the subject of considerable criticism within the country. Many of the country’s universities suffer from under-enrollment, poor management, parochialism, and resistance to change.⁵⁰ In 2009, the Ministry of Education, Science and Technology compiled a list of badly run Korean universities and told each to “clean up its act.”⁵¹ Non-Korean professors comprise less than 5 percent of the faculty in Korean universities, and as of 2008, 39 institutions had no foreign faculty members, a significant weakness in a globalized economy.⁵² A recent Organisation of Economic Co-operation and Development (OECD) survey ranked South Korea last among member countries in terms of college education environment.⁵³ A recent Korean editorial commented that

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⁴⁸ “Korea Kumho Petrochemical to Build Carbon Nanotube Plant,” Yonhap, September 30, 2009.

⁴⁹ “Hanwha Chemical Begins Mass Carbon Nanotube Production,” Yonhap, December 22, 2008.

⁵⁰ “Whither Our National Universities?” JoongAng Daily Online, June 22, 2011; “How Bad Universities Fill Their Seats,” JoongAng Daily Online, June 17, 2011.

⁵¹ “Universities Get a Failing Grade,” JoongAng Daily Online, June 17, 2011.

⁵² “Foreign Professors Are Rare Breed,” The Korea Herald, October 6, 2008.

⁵³ Korean Universities have 32.7 students per professor, on average, or more than double the OECD average of 15.8. The figure is 15 in the US, 11.5 in Germany and 10.4 in Japan. “Korean Students are Badly Served by Their Universities,” Chosun Ilbo Online, June 8, 2011.

⁵⁴ “MIT and Korean Universities,” Dong-A Ilbo Online, May 20, 2011.

The Korean government is implementing sweeping reforms in the university system in an effort to “raise their competitiveness both at home and abroad.”⁵⁵ The universities are making a concerted effort to add foreign professors to their faculties.⁵⁶ In order to “globalize” Pohang University of Science and Technology (POSTECH) became an English language–only campus in 2010 and announced that it would invest $44.2 million for 3 years to draw 10 Nobel Prize and Fields Medal laureates to its faculty.⁵⁷ In 2008, the government indicated it would limit funding for research to 17 “World Class Universities,” effectively cutting off 35 institutions from further government research support.⁵⁸

Notwithstanding the problems of Korea’s universities generally, a handful of the country’s best institutions appear to be improving relative to their foreign counterparts and are engaged in significant research in the sciences and engineering.⁵⁹ In 2010, Korean universities ranked 11th in global standing for publications in major international scholarly journals, up from 19th in 1999.⁶⁰ In 2013, a global ranking of Korean engineering faculties by Quacquarelli Symonds placed Seoul National University (SNU) at 17 and Korea Advanced Institute of Science and Technology (KAIST) at 20th in chemical engineering, whereas in 2012 SNU was 38th and KAIST was not in the top 50.⁶¹ During the 5-year period 2006-2010, 12 Korean universities each registered more than 1,000 patents.⁶² (See Table 6-3.)

Several of these leading universities are making significant research contributions in the field of flexible electronics, most notably KAIST, UNIST, POSTECH, SNU, Kongkuk, Sungkyunkwan, and Kyung Hee universities.

Korea Advanced Institute of Science and Technology

KAIST is a graduate school specializing in science and engineering education and research. It was established in 1971 pursuant to special legislation and is supported with government funding. KAIST is Korea’s leading center for medium- to long-term strategic R&D projects of national importance.

In 2006, Suh Nam-pyo became president of KAIST and launched an ambitious effort to transform the institution into one of the top 10 universities in the

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⁵⁵ “National Universities Face Sweeping Reforms,” Yonhap, September 28, 2010.

⁵⁶ “Korean Universities Hire More Foreign Faculty,” The Korea Herald Online, August 2, 2010.

⁵⁷ “POSTECH Becomes All-English Campus,” JoongAng Daily Online, March 13, 2010.

⁵⁸ “Handful of Top Universities to Get State Research Funds,” The Korea Times Online, December 1, 2008.

⁵⁹ In 2010, five Korean universities ranked among the top 200 universities in the world in the World University Rankings by the Times and Quaquarelli Symonds, a British university rating agency, compared with only two in 2007. KAIST moved from 95th in 2008 to 79th in 2010. Seoul National University received the highest ranking at 50th. “5 Korean Universities Rank Among Global Top 20,” Chosun Ilbo Online, September 8, 2010.

⁶⁰ “Korea Ranks 11th in Papers for Scholarly Journals,” Chosun Ilbo Online, December 15, 2010.

⁶¹ “Korean Engineering Faculties Jump in World Ranking,” Chosun Ilbo Online, May 8, 2013.

⁶² “KAIST Tops Patent List Among Domestic Universities,” Chosun Ilbo Online, July 5, 2011.

TABLE 6-3 Patents Registered by Korean Universities

world. KAIST sent shockwaves through Korean academia in 2007 by denying tenure to 15 out of 35 applicants, and by increasing tuition levels for students with mediocre grades.⁶³ In 2009, KAIST president Suh became the first Asian winner of the ASME Medal, an annual award bestowed by the American Society of Mechanical Engineering for distinguished engineering achievement that is regarded as the Nobel Prize of engineering.⁶⁴ KAIST is pursuing a number of research themes with application to flexible electronics. (See Table 6-4.)

Ulsan National Institute of Science and Technology (UNIST)

UNIST is a recently established university offering undergraduate and graduate curricula in mathematics, the sciences, engineering, and technology. “Many consider it to be the MIT of South Korea.”⁶⁵ It has begun to report research discoveries relevant to the field of flexible electronics. In 2013, a group of Korean scientists led by UNIST professor Lee Sang-young announced development of the world’s first imprintable and bendable lithium-ion battery, based on nanomaterials, which was expected to enhance the development of flexible mobile

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⁶³ “How KAIST and POSTECH Reforms Can Save the Country,” Chosun Ilbo, October 8, 2007.

⁶⁴ “KAIST President Wins Int’l Mechanical Engineering Prize,” Chosun Ilbo Online, July 3, 2009. Suh’s campaign to raise KAIST’s standing has proven controversial, and he has been blamed for fostering a culture of competition that has led to a string of suicides among faculty and students. “KAIST Case Should Send a Warning to Elite Science Education in Korea,” Kyunghyang Shinmon Online, April 12, 2011.

⁶⁵ “YSU Expands Research Role with S. Korean Institute,” Vindicator, April 3, 2013.

TABLE 6-4 KAIST Research Achievements—Flexible Electronics

SOURCES: “KAIST Paves the Way to Commercialize Flexible Display Screens,” Printed Electronics World, February 28, 2011; “Korean Researchers Develop New Flexible Metal Wire Manufacturing,” Plastic Electronics, May 27, 2011; “S. Korean Scientists Develop New Flexible Stretchable Display,” Yonhap, July 3, 2012; “Korean Team Claims to Create World’s First Flexible Batter,” Don-A Ilbo, August 28, 2012; “Bendable Inorganic Thin Film Battery for Fully Flexible Electronic Systems,” Nano Letters, July 30, 2012.

devices.⁶⁶ In 2013, UNIST researchers “demonstrated high-performance polymer solar cells (PSCs) with the highest power conversion efficiency reported to date (8.92 percent) for plasmonic PSC using metal nanoparticles.”⁶⁷ PSCs are bendable, inexpensive to fabricate, lightweight, and have a relatively low potential for negative environmental effects, and the discovery moved the technology much closer to the 10 percent conversion efficiency seen as the level necessary for commercialization. In May 2013, UNIST scientists disclosed that they had combined silver nanowires with grapheme to create a thin, transparent, and stretchable electrode that shows almost no change in its electrical resistance when bent or folded.⁶⁸

Pohang University of Science and Technology

POSTECH is a science and engineering university that supports R&D in basic and applied sciences, usually in government/industry commissioned

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⁶⁶ The research was partially funded by the Ministry of Education, Science, and Technology. “S. Korea Develops World’s 1st Imprintable, Flexible Battery,” Yonhap, January 15, 2013.

⁶⁷ “A Giant Leap to Commercialization of Polymer Solar Cell,” Printed Electronics World, May 10, 2013; “Multipositional Silica-Coated Silver Nanoparticles for High-Performance Polymer Solar Cells,” Nano Letters, April 22, 2013.

⁶⁸ “Korean Researchers Demonstrate New Transparent, Stretchable Electrodes,” Printed Electronics World, May 31, 2013.

TABLE 6-5 Sungkyonkwan University Research Achievements—Flexible Electronics

SOURCES: “Large-Area OLED Lighting Fabricated by Screed Printing,” Flexible Substrate (November 2010); “Scientists Develop Transparent Electrode Manufacturing Process,” Yonhap (June 20, 2010); “Breakthrough Made in Next-Generation Chip Material,” Dong A.com (January 15, 2009); “Self-Powered Flexible Electronics,” MIT Technology Review (April 30, 2010); “Sungkyonkwan University and the University of Nevada Develop Flexible Tactile Displays,” Flexible Substrate, June 2009.

projects. One of its research organizations is South Korea’s foremost nanotechnology research center, the National Center for Nanomaterials Technology (NCNT). The Korean government provided $40 million of the $110 million that was invested to establish the center, and the private sector provided $40 million. One of NCNT’s three “priority support areas” is the development of flexible display core materials, including nano ink, substrate, and electronic materials. NCNT is also reportedly initiating R&D into graphene-based electronics.⁶⁹

Sungkyonkwan University

Sungkyunkwan, located in Seoul, is one of Korea’s foremost universities. Researchers at the university are active in developing materials and technologies with potential applications for flexible electronics. (See Table 6-5.)

Seoul National University

SNU is a highly regarded national research university in Seoul whose graduates dominate Korea’s government, academia, and business communities. SNU

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⁶⁹ “Korea’s POSTECH Explore Nanotechnology Frontiers,” Nano Science Works, January 20, 2010.

administers the Inter-University Semiconductor Research Center (ISRC) conducting basic research on semiconductor technology. ISRC has 550 researchers based in schools and businesses around Korea and 1,200 annual trainees. ISRC’s key feature is its state-of-the-art machinery rather than individual research projects.

Konkuk University

Konkuk University, located in Seoul and Chungju, specializes in science and technology. Konkuk administers the Flexible Display Research Centre (FDRC). Since 2007, FDRC has been collaborating with the Korean office of Finland’s VTT Technical Research Centre to establish a joint laboratory for printed electronics based on R2R process technology. The project is funded by the Korea Foundation for International Cooperation of Science and Technology (KICOS) through a grant provided by the Ministry of Education, Science and Technology (MEST). In June 2011, an international research team headed by Konkuk professor Park Bae-ho announced findings confirming the ripple structure of graphenes, thus identifying a technological hurdle that must be overcome before graphenes can find widespread applications in electronics.⁷⁰

Kyung Hee University

Kyung Hee University, a private university located in Seoul and Suwan, is regarded as one of the best institutions of higher learning in Asia. Kyung Hee operates as Advanced Display Research Center (ADRC) in conjunction with thin-film transistor (TFT)-LCD National Laboratory, with facilities to produce and characterize TFT-LCD, OLED, and Field Emission Display (FED) technologies. Kyung Hee is the only university in the world with this capability.⁷¹

Sunchan National University

Sunchan is a national research university. In 2010, in collaboration with Rice University in the United States, it developed a printable carbon nanotube RFID transmitter that, when embedded in packaging, “would allow a customer to walk a car full of groceries or other goods past a scanner on the car, the scanner would read all the items in the card at once, total them up and charge the customer’s account while adjusting the store’s inventory.”⁷²

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⁷⁰ “Int’l Research Team Confirm Ripple Structure of Graphenes,” Yonhap, June 30, 2011.

⁷¹ “Advanced Display Research Center (ADRC) at Kyung Hee University,” Korea Times, June 14, 2012.

⁷² “Nano-based RFID Tag, You’re It,” Rice University News & Media, March 18, 2010.

International Collaboration

Korean observers of the country’s strengths and weaknesses in flexible electronics regard as major weaknesses the country’s reliance on foreign sources for critical materials and equipment and its lagging position in basic research. International collaborations, overseas R&D centers, acquisitions and technology acquisitions, and exchanges are seen as important mechanisms for addressing these concerns.

Samsung/Liquavista

In January 2011, Samsung Electronics acquired Liquavista BV, a Dutch display technology company. The acquisition allowed Samsung to utilize a new type of “electronic display technology called electrowetting that enables display production with low power consumption for electronic book readers and mobile devices. Samsung plans to use the technology to develop e-paper and transparent displays.”⁷³ Amazon reportedly bought Liquavista from Samsung in 2013.⁷⁴

Inktec/Thin Film

Inktec Co. Ltd. is a leading Korean manufacturer of commercial and electronic inks. In 2008, Inktec disclosed that pursuant to an R&D collaboration with Thin Film Electronics ASA, a Norwegian developer of functional polymer materials for nonvolatile memory applications, the two firms had succeeded in creating fully functional printed memory products in an R2R high-volume printing process. Yields achieved were in the 96-97 percent range. The printed memory film was extremely thin (200 nm).⁷⁵

Yissum/Vaxan

In February 2011, Korea’s Vaxan Steel and the Yissum Research Development Company, the technology transfer arm of the Hebrew University of Jerusalem, signed a licensing on research agreement for the development of silver nanoparticles and silver-coated copper nanoparticles for use in conductive inks.⁷⁶

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⁷³ “Samsung Acquires Dutch Display Tech Firm,” Yonhap, January 20, 2011.

⁷⁴ “Amazon Buys Liquavista from Samsung,” Flexible Substrate, May 2013.

⁷⁵ The two companies produced working 512 MB chip modules in 0.25 nm technology. In 2009, this achievement won the IDTechEx Technical Development Manufacturing Award, which is given for the most significant manufacturing device, process, or production plant in the printed electronics industry in the preceding 24 months. “Inktec and Thin Film Electronics Win Prestigious Award,” Printed Electronics World, April 14, 2009.

⁷⁶ The silver-based conductive inks were developed by Professor Schlomo Magdassi, Dr. Alexander Kamyshmy, and Michael Grouchko from the Institute of Chemistry at Hebrew University. Inks based on these nanoparticles can be used in printed electronics applications on many types of surface,

Under the terms of the agreement Yissum grants Vaxan a license to commercialize the new inks exclusively in Asia, excluding Israel and the former Soviet Union, and Vaxan will pay Yissum research fees and royalties from future sales.⁷⁷

KIMM/Singapore

In 2009, the government-run Korea Institute of Machinery and Materials (KIMM) concluded an agreement with Singapore’s Institute of Materials Research (IMRE) and Singapore Institute of Manufacturing Technology (SIMTECH) to develop micro- and nanotechnologies with medical, electronic, automotive, aerospace, and environmental applications. Research themes include R2R printed electronics, nano-imprint lithography, and nanostructured functional coatings. The collaboration will draw on IMRE’s expertise in materials science and engineering, SIMTECH’s process and measurement technologies, and KIMM’s systems and materials technologies.⁷⁸

Korea-China Flexible Solar Cells Project

In 2010, a Korea-China joint research program was undertaken to develop advanced flexible plastic solar cells and new photovoltaic polymers. The participating institutions are Korea’s Pusan National University Department of Nanomaterials Engineering and the Qingdao Institute of Bioenergy and Bioprocess Technology (QIBEBT), Chinese Academy of Sciences. The Korea-China joint research program is co-funded by Korea’s Ministry of Education, Science and Technology and China’s Ministry of Science and Technology.⁷⁹

LG Display/PVI

In 2010, it was disclosed that Korea’s LG Display would collaborate with Hydis Technologies Co. Ltd., a subsidiary of Taiwan’s Prime View International, to seek leadership in the global e-paper display market. The parties are cross licensing technology and will mutually support production with respect to e-paper

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including thin plastic films and paper. Silver nanoparticles are seen as a particularly promising material for inkjet printed electronics because silver is the most conductive metal, and, in contrast to other metals, oxidation does not harm the conductivity of the film on which silver-based circuits as a superior printing method to lithography and screen printing techniques because it is faster and less expensive.

⁷⁷ “Yissum and Vaxan Collaborate and Printed Electronics Ink,” Printed Electronics World, February 2, 2011; “Korea, Israel Collaborate on Nanoparticles,” Korea Herald Online, April 10, 2011.

⁷⁸ “Korea S’pore Institutes in R&D Tie-up,” The Business Times, March 20, 2009.

⁷⁹ “New Korea-China Research Program Focuses on Nanomaterials for Flexible Solar Cells,” MIT Technology Review, April 19, 2010.

and high-end TFT-LCDs. The two companies will collaborate on materials sourcing and technology development.⁸⁰

KPF/Plextronics

In 2008, Korea Parts & Fasteners (KPF), a producer of forgings and bearings, entered into a memorandum of understanding with U.S.-based Plextronics, Inc., a maker of printed solar and lighting products to establish a production line for organic photovoltaic panels in Cheongju, Korea, and an R&D center. KPF committed $12 million and Plextronics, $10 million, and the collaborators will hold 51/49 percent shares, respectively. The new joint venture, KNP Energy Co. Ltd., “will receive government cash grants tax breaks and support in the building of its factory and research center.”⁸¹

Hanwha Chemical/XG Sciences

In January 2011, Hanwha Chemical Corp., a chemicals-producing firm in South Korea’s Hanwha Group, acquired a 19 percent stake in XG Sciences, a U.S.-based manufacturer of graphenes, materials that have promising potential for flexible electronics, for $3 million. Hanwha also secured rights to sell XG Sciences’ graphenes to India and China.⁸²

POSCO/XG Sciences

In June 2011, POSCO, South Korea’s largest steelmaker, concluded a deal to acquire a 20 percent stake in U.S.-based XG Sciences Inc. The deal makes POSCO XG Sciences’ largest shareholder. POSCO will manufacture graphenes under a licensing agreement with XG Sciences and hopes to establish a graphene manufacturing plant in China in 2012.⁸³

CHINA

China presents a curious counterpoint to the United States and Europe in flexible electronics. In contrast to these regions it lacks most of the equipment and materials infrastructure to support manufacture of flexible displays, as well

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⁸⁰ “PVI, Hyds Technologies and LG Display Launch Co-operation,” Printed Electronics World, January 4, 2010.

⁸¹ “Korean, U.S. Firms to Set up Solar Panel Joint Venture,” Yonhap, May 29, 2008. Under the terms of the MOU, Plextronics supplies baseline solar device and process technology to KPF, and KPF develops advanced process technology using Plextronics’ inks, device, and process technology. “Plextronics Signs MOU to Supply Solar Technology to Korean Company,” Printed Electronics World, June 9, 2008.

⁸² “Hanwha Chemical Buys Into U.S. Graphene Maker,” Yonhap, January 19, 2011.

⁸³ “POSCO Buys into U.S. Graphene Manufacturer,” Yonhap, June 8, 2011.

as a mature basic science research base. However, also in contrast to the United States and the European Union (EU)—where no major manufacturer of flexible displays has emerged—China is currently experiencing an investment rush by enterprises seeking to enter the production of AMOLED displays. The apparent anomaly reflects, in significant part, the potential “market pull” of Chinese consumer demand, as well as the demonstrated willingness of government authorities to finance large-scale investments in production capacity and, if necessary, to subsidize major operating losses.

China is a late starter in the field of flexible electronics. However, it is likely to exercise significant influence on the evolution of global competition in this industry. Given that a key impediment to the development of a commercial flexible electronics industry is the comparatively low consumer “demand pull,” China’s market is likely to play a major role in creating high-volume demand enabling the improvement of production efficiency and yields.⁸⁴ In addition, large-scale financial backing by local governments is enabling Chinese manufacturers to mount a challenge to Korea’s supremacy in flexible consumer displays. While to date China’s central government has not placed a high priority on development of an indigenous flexible electronics industry, it has provided incentives and encouraged local government developmental initiatives. Moreover, the government has targeted other closely related sectors (microelectronics, photovoltaics), a fact which is likely to contribute to the eventual build-out of a domestic flexible electronics industry chain.

China’s huge domestic market, augmented by targeted government procurement programs, has generated demand for products closely associated with flexible electronics, inducing investments in local manufacturing operations by domestic and foreign enterprises. Between 2007 and 2013, the Chinese government implemented a rural home appliance discount plan that provided subsidies to rural households to purchase low-end appliances, including LCD TVs, providing a strong demand boost for indigenous production of flat-panel displays (FPDs). The existence of an FPD industrial base is enabling China’s entry into AMOLED flexible displays.⁸⁵ In addition, China has emerged as the world’s largest market for RFIDs, driven by government procurement of 1 billion national ID cards and increasing use by public entities of RFID tags for transportation logistics and contactless reusable tickets.⁸⁶

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⁸⁴ “Potential Threat to Samsung: Chinese AMOLED Panels to Pass Into Market,” Business Korea, May 2, 2014.

⁸⁵ “Rural Home Appliance Subsidy Fruitful,” China Daily, November 17, 2013; “China’s Rural Home Appliance Subsidy Boosts Sales,” China Daily, November 12, 2012. The subsidy policy promoted the purchase of low-end LCD TVs up to 47 inches, which favored domestic producers relative to Japanese and Korean makers of higher priced LCD TVs. In 2008, the subsidy was paid only when a product priced at 2,000 yuan ($324) or less was purchased. In 2007, the subsidy was expanded to products costing as much as 7,000 yuan ($1,134).

⁸⁶ “RFID, PE Industries Enjoy Growth in China,” Printed Electronics Now, September 2010; “China’s PE, RFID Markets Show Strong Growth,” Printed Electronics Now, November 2009; “ID

Not all Chinese government policies have been consistent with a development of an indigenous capability in flexible electronics. In an industry in which, in global terms, small- and medium-sized enterprises are often at the cutting edge of innovation, Chinese central government policies in electronics have favored large enterprises, with the result that SMEs have encountered difficulty raising capital.⁸⁷ The central government’s introduction of measures promoting “indigenous innovation,” introduced during and after 2006, arguably induced Chinese display makers to utilize inferior domestically made inputs and acted as a drag on industry integration.⁸⁸

Displays

As Korea and Taiwan are demonstrating, the existence of an established industrial base for the production of rigid consumer displays can leverage entry into flexible displays, most dramatically through the conversion of production lines for glass panels to enable manufacturing of flexible displays.⁸⁹ As recently as 2010, China accounted for less than 4 percent of global production capacity for flat-panel displays. However, reflecting massive and sustained capital investments—capacity has grown at a compound annual growth rate of 51 percent since 2010—China is forecast to account for greater than 21 percent of global capacity by 2015. While to date most spending has been concentrated on amorphous silicon TFT-LCDs, Chinese producers of displays are rapidly diversifying into high-end subsectors such as low-temperature polysilicon TFT-LCDs and AMOLED

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Cards Drive RFID Demand in China,” Infowars.com, August 30, 2005. In 2009, the Hong Kong Airport Authority introduced RFID technology to facilitate baggage tracking. The Hong Kong government has sponsored pilot projects to encourage the use of electronic product codes (EPCs) in RFID identification tags to improve supply chain efficiency. “Product Codes Help Synchronize Flow of Goods,” South China Morning Post, October 10, 2008; “Motorola Deal to Improve Airport Luggage Handling,” South China Morning Post, May 12, 2009.

⁸⁷ In the 1990s, Chinese industrial policy was “grasp the large, let go to the small.” The Ninth Five Year National Development Plan provided with respect to the electronics industry the objective of creating 2-3 microcomputer makers with an annual production capacity of more than $1 billion. YungKai Yang, “The Taiwanese Notebook Computer Production Network in China: Implication for Upgrading of the Chinese Electronics Industry” (University of California at Irvine, Personal Computing Industry Center, February 2006), 19. A significant exception to this general pattern was the Torch Program, initiated in 1986, which directed government R&D support to SMEs. Heilman et al. (2013) op. cit., “China’s Torch Programme.”

⁸⁸ On this point see Chen and Ku (2014) op. cit., “Indigenous Innovation vs. Teng-Long Huan-Niao,” op. cit., the gist of the Indigenous Innovation policies was to create incentives to enable Chinese enterprises to acquire, absorb, and modify foreign technologies to create new technologies with Chinese-owned intellectual property. Provisional Measures for Accreditation of National Innovation Products, Ministry of Finance, Ministry of Science and Technology and National Development and Reform Commission, December 2006.

⁸⁹ “Q&A,” Dr. Janglin Chen of ITRI (Part 1),” The Emitter, July 2, 2013; ITRI, “Flexible Electronics Packing a Punch,” March 31, 2011.

displays for smartphone and tablet PC applications.⁹⁰ Massive Chinese investments in AMOLED displays now appear to represent a direct challenge to the market leader, Samsung.⁹¹

Emergence of China’s Flat-Panel Display Industry

China’s come-from-behind effort to establish a domestic FPD industry is relevant to the subject of flexible electronics because the comparative lack of a domestic FPD industrial capability is seen as a major impediment to U.S. and European prospects in flexible electronics. China has demonstrated that with the requisite level of investment and acquisition of foreign technology, an FPD industry can be established in a relatively short timeframe in the face of strong competition. The experience of BOE Technology Group, China’s market leader in FPDs, which suffered massive operating losses in the wake of the global financial crisis, underscores the risks facing Chinese firms in this sector.⁹² However, central and local government subsidies ultimately offset these losses.⁹³ Sustained by government organizations, the newly established FPD industrial base is enabling China’s current bid to challenge Korean dominance in flexible displays.

China’s nascent LCD industry benefited substantially from supportive government policies at the national level.⁹⁴ However, the key government actors in

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⁹⁰ “China to Account for More Than 70% of Flat Panel Display Equipment Spending,” CTimes, February 7, 2014.

⁹¹ “Potential Threat to Samsung: Chinese AMOLED Panels to Pour Into the Market,” Business Korea, May 2, 2014; “Can China Break Samsung’s AMOLED Grasp?” China Focus, April 8, 2014; “China Firms Invest in AMOLED Lives Largely,” SinoCast, March 12, 2014.

⁹² “BOE admitted that hurt by recession in the global consumer electronics market in the second half of this year, it saw the price of major LCD panels continued to drop and due to this, its loss incurred from operations this year would be huge.” “China Panels Makers Expand Amid Fiercer Global Competition,” SimoCast, December 12, 2011; “BOE Loss-Making Operation Expected to Continue in 2011,” SimoCast, February 3, 2012.

⁹³SinoCast, an online information website covering Chinese business, observed in 2012, “According to industry observers, it is inevitable for both BOE and Huaxing Photoelectronic to suffer an operational loss in 2011, thus various kinds of government subsidies, export rebates, and discount loans will play a significant role in helping them turn the loss into a profit on their financial sheets. . . . The Chinese government had provided subsidies and support to the nation’s LCD panel makers for a period of time and in 2010, TCL received more than CNY 1.5 billion [$243 million] from the municipal governments of Shenzhen and Huizhou as well as from the provincial government of Guangdang. The figure it achieved in the first three quarters of 2011 hit CNY 340 million [$55 million].” “Panel Makers Depend Much on Government Subsidies,” SinoCast, January 4, 2012.

⁹⁴ China’s 11th Five Year Plan (2006-2010) included a subplan for development of the information industry, including promotion of the digital TV sector, which used flat panels to display images. Beginning in 2006, tax rebates on value-added tax (VAT) paid on intermediate components and sub-assemblies used in flat panel TV receivers were increased for 13 percent to 17 percent upon export of finished products. The industry enjoyed tariff and VAT concessions on imported machinery and materials used to produce LCDs. In 2009, the State Council issued a plan calling for the elimination of “bottlenecks” in the flat-panel display industry, including central government subsidies of up to $32 million. In 2012, the government raised the tariff rate on large-screen LCD panels from 3 percent

the growth of this industry were local governments.⁹⁵ Municipal governments have been alternately encouraged and restrained by central government authorities concerned over the potential for excessive investments.⁹⁶ Local authorities utilized their State Assets Supervision and Administration Commissions (SASACs), high-tech development zones (HTZs), and economic development authorities to support LCD investment projects, provide loans, and periodically to purchase additional equity in LCD enterprises.⁹⁷ (See Table 6-6.)

The ownership structure of the Chinese LCD makers typically provides for mixed public–private ownership, which enables periodic rounds of public–private equity financing.⁹⁸ In the case of BOE Technology, China’s largest LCD maker, the government of Beijing wields “actual control” over the company through the wholly government-owned Beijing Electronics Holdings Co., Ltd., despite the fact that the latter’s equity interest is extremely modest and diluted by other equity interests.⁹⁹ (See Figure 6-1.)

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to 5 percent to protect domestic producers. Tain-Jy Chen and Ying-Hau Ku, “Indigenous Innovation vs. Ten-Long-Huan-Niao: Policy Conflicts in the Development of China’s Flat Panel Industry,” Industrial and Corporate Change, February 2014.

⁹⁵ Professor Jang Jin of Korea’s Kyung Hee University, who chaired the International Meeting on Information Display in 2013, observed that “China’s local governments have made huge investments in the display industry. China’s LCD display industry is currently facing a 1-2 year technology gap with Korea’s, while the technology gap in OLED technology extends further to five year’s difference. However, within ten years, China will begin to dominate the display industry in its entirety. They are hiring talented engineers from Taiwan and paying them high salaries.” “Display Technology Is Emerging in China,” Korea IT Times, June 26, 2013.

⁹⁶ In 2009 the State Council urged local governments to provide financial support for strategic investment projects in the flat panel display industry, committing to augment this support with central government funds. The result was a “plethora” of investment initiatives “mostly orchestrated by the local governments,” and in 2010 the Ministry of Industry and Information issued an ordinance revoking the authority of local governments to approve LCD panel projects, requiring central government approval of each project. Subsequently the NRDC has screened LCD investment proposals favoring in particular proposals featuring comparatively advanced technology levels. Chen and Ku, “China’s Flat Panel Industry,” 11–12.

⁹⁷ At the national level, central SASAC was established in 2003 to own and manage state-owned assets “on behalf of the State Council,” China’s supreme executive authority. A network of local-level SASACs was subsequently established. The local SASACs operate under the administrative control of local governments, which make appointments and manage budgets of the enterprises that they wholly or partially own. Central SASAC retains business authority over local SASAC offices and “guides and supervises” the work of state-owned assets supervision and administration of the government at the local level.” Interim Regulations on Supervision and Management of State-Owned Assets of Enterprises, Decree of the State Council of the People’s Republic of China, No. 378, Premier Wen Jiabao, May 27, 2003.

⁹⁸ In 2011, China’s central SASAC called for engagement of non-state-owned capital, including private and foreign capital, in the state holdings of state-owned enterprises. “Equity diversification is crucial for SOEs to form a modern corporate management structure [to enable SOEs to] compete with other multinational companies in the global arena,” said SASAC Chairman Wang Yang. “Chinese State-Owned Enterprises to Use Overseas Funds,” Asia Pulse, January 9, 2011.

⁹⁹ Beijing Electronics Holdings Co. Ltd.’s direct 2.04 percent equity interest in BOE Technology is smaller than the holdings of five other entities: Beijing e-TOWN International Investment & Devel-

TABLE 6-6 Ownership of Leading Chinese TFT-LCD Firms (2010)

SOURCE: Rho, “A Study on the Chinese Flat Panel Display Industry” (2010) op. cit., 21.

A key aspect of local government support for Chinese LCD producers has been HTZs, many of them originally established pursuant to a central government initiative but characterized by “bottom up” local government direction and featuring a wide variety of promotional tools from zone to zone.¹⁰⁰ The Kunshan New & Hi-Tech Industrial Development Zone (KSND), for example, established in 1994, is the site of China’s first large-scale indigenous OLED production line, established by Visionox in 2008.¹⁰¹ The KSND, like similar organizations in other areas, exists as an administrative entity capable of setting its own operating rules and industrial incentives. The KSND offers a variety of incentive packages to high-technology companies, which may include grants, training, and concessional rents and utilities. High-technology companies qualify for an income tax rate of 15 percent, as

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opment Co. Ltd (10.98 percent, state-owned); Beijing BOE Investment & Development Co. Ltd., (6.37 percent, state-owned); Beijing Economic-Technological Investment & Development Corp. (6.27 percent, state-owned); Hefei Rangke Project Investment Co. Ltd. (4.99 percent, state-owned); and Beijing BDA Technological Investment Development Co., Ltd (4.44 percent, private). BOE Technology Annual Report, 2013, 41.

¹⁰⁰ The so-called Torch Plan, launched by the State Council in 1988, sought to establish “Silicon Valleys” across China in the form of HTZs. Despite its genesis as a central government initiative, between 1988 and 2005 only about 1 percent of Torch Plan finances derived from the national budget, with the remainder attributable to local sources including local enterprises and banks. Although the HTZs were originally intended as incubation areas for innovative domestic enterprises, many of them came to be dominated by foreign-owned entities and large export-oriented companies. “Progress of Torch Plan Reviewed,” Keji Ribao, April 11, 1990; Sebastian Heilman, Lea Shih, and Andreas Hofem, “National Planning and Local Technology Zones: Experimental Governance in China’s Torch Programme,” The China Quarterly, December 2013.

¹⁰¹ Market Intelligence & Consulting Institute, “China’s Visinox Begins OLED Production in Kunsham,” October 17, 2008.

FIGURE 6-1 Schematic showing control arrangement for BOE Technology Group.
SOURCE: BOE Technology Group Co., Ltd, Annual Report 2013, 45.

opposed to the standard rate of 25 percent.¹⁰² KSND is focusing its developmental effort on six “pillar” sectors, one of which is OLEDs, an area in which it collaborates with Tsinghua University, which has established a science park in Kunshan.¹⁰³

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¹⁰² Kunshan Expat Association Website, <http://www.kunshanexpat.com/business-update/41-the-ksnd-business-promotion-bureau>.

¹⁰³ “Special Supplement: KSND, Rising Star in the Yangtze River Delta,” China Daily, September 7, 2007.

Local governments have found creative ways to induce investment in displays, including flexible displays. In August 2011, BOE Technology reportedly reached an agreement with local authorities in Ordos, Inner Mongolia, to invest $3.5 billion to set up AMOLED display production lines in Ordos, in return for which the BOE group received exploitation rights for 1 billion tons of coal from the city of Ordos. The exploitation rights were held by a BOE subsidiary, BOE Energy Technology, and later in 2011 BOE Technology agreed to sell 60 percent of its stake in BOE Energy to Beijing Industry Development & Investment Management Co., Ltd., a Beijing government-owned entity that held a 3.27 percent equity stake in BOE Technology, and another 20 percent of its equity stake in the state-owned coal producer Beijing Haohua Energy Resource Co. Ltd.¹⁰⁴ Through the stock sales BOE Technology received $566.9 million, which it used to offset losses and to finance the new AMOLED lines in Ordos.¹⁰⁵ In effect, Ordos used exploitation rights for coal to enable BOE Technology to raise capital from its existing public shareholders for a local investment in AMOLED manufacturing.

AMOLED Displays

In 2011, when Korea’s Samsung held a near monopoly in the production of AMOLED displays (92 percent share), Chinese LCD makers were reportedly preparing to enter the AMOLED display market and challenge the Korean market leaders.¹⁰⁶ Market analyst Vinita Jakhanwal from the consultancy iSuppli commented that

The major Chinese market entrants were expected to be established LCD makers, and a number of these companies declared their intention to enter AMOLED production, including BOE Technology, Tianma, Visionox, Shenzhen ChinaStar Optoelectronics, and IRICO.¹⁰⁸

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¹⁰⁴ BOE Technology Annual Report, 2011, p. 53; “BOE Transfers Mining Shares for OLED Investment,” WantChinaTimes.com, October 29, 2011.

¹⁰⁵ “BOE Tech Group to Sell 80% of energy Unit,” SinoCast, November 15, 2011; “BOE Gains 3.6 Billion Yuan Transfer Proceeds, Wholly Put an AMOLED,” GG-LED.com, February 29, 2012, <http://www.gg-led.com/asdisp3-G56095fb-159-html>. “BOE Transfer Mining Shares for OLED Investment in Ordos,” WatchChinaTimes.com, October 29, 2011.

¹⁰⁶ “China Aims for Lead in AMOLED Sector,” Asia Pulse, November 18, 2011.

¹⁰⁷ “Suppli Sees China Targeting AMOLED Market,” Optics.org, November 27, 2011; “China Aims to Be Major Player in AMOLED Industry,” Yonhap, November 18, 2011.

¹⁰⁸ In addition to these players, the Dutch-Belgian research organization IMEC was reportedly planning to build a 3.6 Gen AMOLED display fab in Nanjing in collaboration with JGroup, and Blue Excited Technology planned to make small AMOLED displays based on technology developed

In 2013 and 2014 numerous reports spoke of a major, multifirm buildup of indigenous Chinese production capacity for small AMOLED displays for handsets. A newly formed company, Shanghai-based Everdisplay Optronics, demonstrated prototype 5.5-inch OLED displays in 2013 and was said to be investing in production capacity for 15,000 units per month to commence in late 2014.¹⁰⁹ BOE and Visionox were reportedly considering investment in production lines for AMOLED panels smaller than 10 inches, with Visionox indicating it was hiring experts from the United States, Korea, and Taiwan to assist in this effort.¹¹⁰ At least three other Chinese makers were reportedly considering market entry, raising concerns of overcapacity:

According to a 2014 report by the consultancy NPD Display Search, which specializes in the display industry, Chinese companies’ spending on FPD production equipment, which represented 22 percent of global spending as recently as 2010, is expected to exceed 70 percent in 2014 and 2015, representing investments in both low-temperature polysilicon and AMOLED display applications.¹¹²

Despite broad and deep government financial support, Chinese firms entering the market for AMOLED displays against entrenched Korean players face daunting challenges. A 2011 report by the consultancy CCID Consulting summarized the situation facing Chinese entrants into OLED displays:

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at Xinyang Normal University. “AMOLED Production: Entering a New Era?” Information Display, March/April 2013.

¹⁰⁹ “China Looking to Break into Small Screen AMOLED Market 2015,” Plastic Electronics, May 7, 2014.

¹¹⁰ “Potential Threat to Samsung: Chinese AMOLED Panels to Pour into the Market,” Business Korea, May 2, 2014.

¹¹¹ “China Looking to Break into Small Screen AMOLED Market 2015,” Plastic Electronics, May 7, 2014.

¹¹² “China to Account for More than 70% of Flat Panel Display Equipment Spending,” CTimes, February 7, 2014.

The technological and supply chain obstacles to China’s success in AMOLED displays are being addressed, in part, by offshore procurement and arrangements and local investments by western materials and equipment suppliers.¹¹⁴ In addition, Chinese enterprises have reportedly hired significant numbers of engineers with relevant competencies from Taiwan, Korea, and other advanced countries.¹¹⁵

Key Companies

Beijing Orient Electronics (BOE) Technology Group Co. Ltd.

The foremost Chinese challenger of Korea’s position in AMOLED displays is BOE Technology, a partially state-owned enterprise that is China’s largest manufacturer of TFT-LCDs. The company’s roots go back to the 1950s to a Beijing-based maker of cathode ray tubes that gradually accumulated technology, production experience, and human skills and resources and which began seeking entry into TFT-LCD markets in the mid-1990s.¹¹⁶ In 2002, pursuant to a South Korean government effort to rescue the financially troubled Korean semiconductor producer Hynix, BOE Technology Group acquired Hydis, Hynix’s flat-panel display unit, for $380 million. To facilitate the sale of Hydis to BOE, three banks that were majority owned by the Korean government provided a total of $180 million in loans to BOE.¹¹⁷ Through the Hydis purchase BOE became

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¹¹³ “Large OLEDs Top Lists in China,” Solid State Technology, April 7, 2011. BOE’s investment in AMOLED display manufacturing in Ordos, Inner Mongolia, prompted the observation that “it will be a significant challenge to operate an AMOLED-display fab in such a remote location without any supply chain or plentiful water supply, and for BOE to make the leap into GEN 5.5, the leading edge of AMOLED display production.” Paul Semanza, “OLEDs in Transition,” Information Display, October 2011, 16.

¹¹⁴ “Merck KGaA Inaugurates Liquid Crystals Center in Shanghai,” Printed Electronics Now, December 3, 2013; “Qingshan L: Appointed as New Lab Director for AIXTRON China Ltd,” Printed Electronics Now, March 21, 2013; “BOE Technology Group Teams with Applied Materials to Deliver Leading Edge Display Technologies for Next-Generation Televisions and Mobile Displays,” Printed Electronics Now, July 2013: “Universal Display’s State-of-the-Art Chemistry Laboratory in Hong Kong,” Printed Electronics World, April 29, 2011.

¹¹⁵ “Display Technology is Emerging in China,” Korea IT Times, June 26, 2013. “China makers are heavily reliant on recruiting talent from Taiwan to develop AMOLED panels, which poses challenges for Taiwan’s panel industry, as top engineers are continuing to transfer to companies in China.” “China Handset Vendors to Rely on Local AMOLED Panel Production from 2016,” Digitimes, February 26, 2014.

¹¹⁶Understanding China’s Manufacturing Value Chain: Opportunities for UK Enterprises in China (University of Cambridge, 2008), 29.

¹¹⁷ Congressional Research Service, The Semiconductor Industry and South Korea’s Hynix Corporation, May 27, 2003, CR5-12. The banks were the Korea Exchange Bank, the Korea Development Bank, and Woori Bank (ibid.). The transaction was part of a larger effort by Hynix to sell nearly

the first Chinese firm to possess core TFT-LCD technology, which the company planned to use to become the world’s third largest maker of TFT-LCDs. BOE CEO Wang Dongsheng commented in 2003 that “the purpose of the acquisition was to obtain the core technology. This core, for crystal flat-display technology, was in the hands of South Korean and Japanese companies. An acquisition was the only way we could get ahold of it.”¹¹⁸

BOE began volume production of TFT-LCDs in Beijing in early 2005, but reflecting its limited technological capability it suffered operating losses for a number of years. However, it continually succeeded in raising funds from municipal governments in Beijing and Hefei (in Anhui Province) as well as from a number of state-owned enterprises—and as a result, it was able to sustain an aggressive investment effort.¹¹⁹ In 2010, the company reported it was being granted a government subsidy of $122 million.¹²⁰ In 2012, in the wake of “huge” operating losses, BOE Technology reported that two of its subsidiaries, Hefei BOE Optoelectronics Technology Co., Ltd. and Beijing BOE Display Technology Group Co. Ltd., each received discounted loans from the municipal governments of Hefei and Beijing totaling 223 million yuan ($36 million) and that its LCD production lines qualified for return of “overpaid” value-added tax (VAT) totaling 1.39 billion yuan ($225 million).¹²¹ In 2013, BOE Technology disclosed that it had signed an agreement with the government China Development Bank giving it total credit from the bank of 20 billion yuan ($3.2 billion) for 2013 and 2014.¹²² In mid-2013 BOE disclosed that the government

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$1 billion in non-core assets. “Rivals Furious As Hynix Set to Sell Dollars 1bn of Non-core Assets,” Financial Times, January 31, 2003.

¹¹⁸ “China Imports Hi-Tech through Hydis Purchase: BOE Says an Acquisition Is the Only Way to Get Ahold of the Core Technology,” South China Morning Post, February 20, 2003. The aftermath for Hydis itself was less sanguine:

“[Hydis] worker acrimony increased when BOE used technology transferred from Hydis to build a new display factory in Beijing. When Hydis later ran into financial trouble, BOE did not pump in more money, leaving it to file for bankruptcy protection in 2006, according to Hydis employees. Now sold to a Taiwanese company, Hydis is a shell of its former self. ‘BOE got the technology they wanted,’ said Hwang Pil Sang, a Hydis worker. ‘All we got was layoffs.’” “Soured Deal Embitters Shanghai and Seoul: A Warning for Those Seeking China Cash?” International Herald Tribune, February 25, 2009.

¹¹⁹ Sungho Rho, “Technological Discontinuity and Industrial Catch-up: A Study on the Chinese Flat Panel Display Industry” (presented at Globelics 2010 8th International Conference, University of Malaya, Kuala Lumpur, Malaysia, November 1-3, 2010), 22. “BOE Tech Sells Shares to Raise 1,96 Yuan,” South China Morning Post, October 13, 2006; “BOE Technology Wins Government Aids,” SinoCast, November 11, 2008.

¹²⁰ “China’s BOE Technology Group May Turn Around, Buoyed by Government Subsidy,” China Business News, January 20, 2010.

¹²¹ “Panel Makers Depend Much on Government Subsidies,” SinoCast, January 4, 2012.

¹²² “BOE Tech. Signs Financial Cooperation Agreement with CDB,” SinoCast, January 8, 2013.

Export-Import Bank of China had extended it a line of credit of 30 billion yuan ($4.9 billion) for the next 3 years.¹²³

Beijing Visionox Technology Co. Ltd.

Visionox was established in 2001 to commercialize OLED technology being developed at Beijing’s Tsinghua University. In 2002, pursuant to China’s 863 Program, or State-Hi Tech Development Plan, Visionox and Tsinghua studied the application of OLED technology to flat-panel displays under the Tenth and Eleventh Five-Year Plans.¹²⁴ This project reportedly successfully overcame “technological difficulties in terms of OLED material, manufacturing technology and product implementation, completed the technical study of pilot-scale experiment and realized small batch production.”¹²⁵ Visionox’s commercial strategy emphasizes development of its own proprietary technology, and in the first decade after its founding it applied for and/or secured 288 patents. Visionox’s R&D was supported by numerous government organizations, including the Ministry of Science and Technology, the Ministry of Industry and Information Technology, the Economic Development and Reform Commission, and the National Natural Science Foundation Committee.¹²⁶

In 2011, Visionox declared its intention to become a manufacturer of AMOLED displays.¹²⁷ Visionox indicated that it was building a 5.5 Gen AMOLED manufacturing line that was expected to become operational in mid-2014.¹²⁸ In 2013, Visionox announced that it had developed the Chinese mainland’s first flexible AMOLED display, a 3.5-inch display with a bending radius of nearly 10 cm that could withstand repeated bending.¹²⁹ A year later Visionox announced that it had

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¹²³ “China’s BOE Technology Signs Agreement With Export-Import Bank of China,” China Business News, June 20, 2013.

¹²⁴ The 863 program (so named because of its inception in March 1986) was established on the initiative of four of China’s leading weapons scientists to diversity China’s R&D programs from strictly military themes to dual use and civilian technologies. The 863 Program concentrated on the fields of information technology, lasers, space technology, automation, energy, new materials, and biology. “Innovation Can Solve China’s Energy Predicaments,” Keji Ribao, July 13, 2006; “Call for More Investment in China’s High Tech Sector,” Asia Pulse, February 2, 2006; “Fair, Dedicated, Realistic, Coordinated, Innovative,” Keji Ribao, March 25, 1990.

¹²⁵ Ministry of Science and Technology, “The 1st Large-Scale OLED Production Line of Mainland China Settled in Kunshan,” Press Release, November 23, 2005.

¹²⁶<http://www.visionox.com/en/about.aspx>.

¹²⁷ “Visionox Announces Its Commitment to Gen 4.5 AMOLED Production,” OSADirect, August 8, 2011. Visionox also produces OLED lighting panels, which are comparatively inexpensive. “Updates on Visionox’s OLED Lighting Program: New Panels and Lamps Unveiled,” OLED-Info.com, April 22, 2012.

¹²⁸ “Visionox Starts Constructing a 5.5-Gen AMOLED Line, Develops a Flexible 3.5’ Monochrome AMOLED,” OLED-Info, August 2, 2013.

¹²⁹ “Kunsham OLED Industry Makes a Breakthrough,” Kunshan Today, August 5, 2013.

developed a flexible full-color 3.5-inch AMOLED display, albeit with a smaller bending radius of under 5 mm.¹³⁰

Truly-Huizhou AMOLED JV

In December 2013, Hong Kong–based Truly International Holdings Ltd., an industrial group making LCD modules, touch panel products, and camera modules, concluded an agreement with the municipal government of Huizhou, in Guangdong Province, to launch a joint venture to produce AMOLED displays on a 4.5 GEN production line beginning in the second half of 2015, with a planned monthly output of 15,000 units.¹³¹ The AMOLED line will be located in the Huizhou Zhankai High-Tech Industrial Development Zone, and the management of the Zone is taking a 27.12 percent stake in the venture, along with another 19.88 percent share by the SASAC owned by the Huizhou Municipal Government. (See Figure 6-2.)

The joint venture’s total investment will be 6 billion yuan ($971 million) to be funded “by a combination of registered capital contributions, bank loans and government subsidies.” The AMOLED joint venture has “received great attention [sic] from Guangong provincial government and Huizhou municipal government as well as industrial subsidy support.”¹³²

Tianma Micro-Electronics Co.

Tianma is a maker of LCDs founded in Shenzhen in 1983 and has established LCD operations in Shanghai, Shenzhen, Chengdu, Wuhan, and Xiamen.¹³³ In 2010 Tianma’s Shanghai-based subsidiary, Shanghai Tianma Microelectronics Co., Ltd., announced plans to build a 4.5 GEN AMOLED production line in Shanghai. Shanghai would reportedly contribute 210 million yuan ($34 million) to this project, with another 281.6 million yuan ($46 million) derived from “government grants and subsidies.”¹³⁴ In 2014, Tianma was reportedly preparing to invest 1 billion yuan ($162 million) in a 4.5 GEN AMOLED production line,

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¹³⁰ “Visionox Developed Full-Color 3.5” Flexible AMOLED,” OLED-Info.com, March 27, 2014.

¹³¹ Truly is incorporated in the Cayman Islands and operates out of Hong Kong. Founded in Hong Kong in 1978, it has become a major force in the electronics industry in Guangdong Province, with a 1 million square meter local production base. <http://www.trulymid.com/en/newsInfo.asp?Pid?pid24>; Truly International Holdings Annual Report, 2013.

¹³² Truly International Holdings Limited, Shareholders Agreement on Formation of a Joint Venture Company, December 17, 2013, 5. Truly International’s 2013 annual report (p. 112) states that in that year the company received “incentive subsidies” of about $13 million from the Hong Kong government “to encourage the operation of a PRC subsidiary for the development on export sales and advance technology.”

¹³³<http://www.tianma.cn/english>.

¹³⁴ “Shanghai Tianma to Invest in GEN 4.5 AMOLED Pilot Line,” OSA Direct, August 30, 2010.

FIGURE 6-2 Schematic showing control arrangement for Truly/Huizhau AMOLED Joint Venture.
SOURCE: Truly International Holdings Limited, Shareholder Agreement on Formation of a Joint Venture Company (December 17, 2013).

primarily to serve domestic companies such as Huawei, Lenovo Coolpad, and ZTE Corp.¹³⁵

Hehui Optoelectronics

Shanghai Jinshan Hehui Optoelectronics Works is reportedly establishing a 4.5 GEN AMOLED manufacturing line in Shanghai’s Jinshan Industrial Zone.¹³⁶ The line is reportedly being established “largely through government funding.” Hehui has reportedly succeeded in recruiting more than 70 engineers from Taiwan. The line is reportedly producing small volumes of handset panels

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¹³⁵ “China Firms Invest in AMOLED Lines Largely,” SinoCast, March 12, 2014.

¹³⁶ “Hehui Optoelectronics President Visits Jobsite of SBC-MCC Group in Shanghai,” MCCChina, Press Release, July 8, 2013.

but is expected to begin mass production of AMOLED panels in 2014 and is “also likely to produce flexible displays.”¹³⁷

IRICO

IRICO Group Corporation is a state-owned enterprise with extensive electronics manufacturing operations whose shares are held by the central government SASAC, and according to its website, “for many years, the Party Central Committee and the State Council have always been concerning and supporting the development of IRICO.”¹³⁸ IRICO is a major producer of LCDs and for a number of years has stated its intention to enter the manufacture of OLED displays.¹³⁹ In 2011, the company was reportedly planning an issue of nonpublic shares to finance establishment of a 4.5 GEN AMOLED production line.¹⁴⁰ As of mid-2013 IRICO was reportedly preparing to build an AMOLED production line “in the next two years.”¹⁴¹

Ascent Solar-Suqian JV

In 2013, Colorado-based Ascent Solar Technologies concluded an agreement with the municipal government of Suqian, in China’s Jiangsu province, to establish a joint venture to manufacture Ascent’s proprietary thin-film copper/indium/gallium/selenium (CIGS) photovoltaic modules on flexible polyimide film.¹⁴² The joint venture will be located in the Suqian Economic and Industrial Development Science Park. The municipal government has committed to inject $32 million into the joint venture, and Ascent will contribute its proprietary technology and intellectual property as well as equipment from its Colorado plant. Suqian will also provide a 5-year corporate tax holiday followed by a 5-year 50 percent tax rebate; full rebate of the value-added tax for 2 years and a 50 percent rebate over the subsequent 5 years; and free accommodations for up to 3 years for “key scientists, engineers and management personnel of the JV.”¹⁴³

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¹³⁷ “Hehui to Mass Produce Small-to-Medium-Size AMOLED Panels in 2014,” <http://www.ctxme.com/latestnews_info.php?id=208>.

¹³⁸<http://www.ch.com.cn/english/txt.jsp?uritype+tree.TreeTempUri&wbtreeid=1459>.

¹³⁹ “Highlights from Printed Electronics Asia 2012,” Printed Electronics World, October 10, 2012.

¹⁴⁰ “IRICO to Raise Funds to Establish Generation 4.5 AMOLED Production Lines,” GG-LED, April 7, 2011.

¹⁴¹ “DisplaySearch: AMOLED Manufacturing Capacity Forecast to Nearly Triple in 2012,” Green Street Journal, July 29, 2013.

¹⁴² “Ascent Solar to Build New Manufacturing Plant in China,” Printed Electronics World, July 16, 2013.

¹⁴³ “Ascent Solar Signs Definitive Agreement to Build New Manufacturing Plant in Suqian of Jiangsu Province, China,” Printed Electronics Now, January 3, 2014.

Kunshan Printed Electronics Ltd.

Kunshan Printed Electronics Ltd. (KSFPE) was established in Suzhou in 2011 by Dr. Zhang Xiachang, the inventor of SoftBattery and co-founder of Finland’s Enfucell. KSFPE was funded by local investors in cooperation with a local machinery operator. The company has established an R2R production line for printed batteries with a capacity of 40 million cells per year.¹⁴⁴ Applications of the batteries include RFID labels, smartcards, and ultrathin calculators. The company’s collaborators include Finland’s government research organization, VTT, and the Finnish printed battery company affiliated with Dr. Zhang, Enfucell.¹⁴⁵

China Star Optoelectronics Technology (CSOT)

China Star Optoelectronics Technology (CSOT) was formed as a joint venture of Star Hi-Tech, a holding company dominated by the Shenzhen municipal government, and TCL Group, a large Chinese consumer electronics producer. CSOT recruited LCD talent in Japan, Korea, and Taiwan and formed collaborations with a number of foreign suppliers.¹⁴⁶ By 2012, China Star was the second biggest LCD maker in China and the only Chinese firm operating an advanced 8.5 GEN fab.¹⁴⁷

Kunshan Hisense Electronic Co., Ltd (Hisense)

Hisense was formed in 2007 by Chinese and U.S. nationals who had studied in U.S. universities or worked in U.S. and European high-technology companies.¹⁴⁸ Hisense develops and produces materials associated with printed electronics, including nanosilver conductive ink, conductive silver paste, and printed electronic inkjet printing systems. Managed and staffed primarily by “returned

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¹⁴⁴ “Printed Battery Company in China,” Printed Electronics World, July 22, 2013.

¹⁴⁵<http://www.ksfpe.com>.

¹⁴⁶ Foreign affiliations included Corning (glass substrates); Toppan and Dai Nippon Printing (color filters); and Sumitomo Chemical, Toyota Gosei, and JSR (photoresist materials). Mei Chih Hu, “Technological Catching-up in East Asia,” in International Economic Development: Leading Issues and Challenges, eds. Fu Lai Tony Yu, Wai Kee Yuen, and Dinna S. Kwan (New York and Abington: Rutledge, 2014), 86.

¹⁴⁷ “Rise of Chinese LCD Firms Threatens Local Makers,” Taipei Times, November 12, 2012. In 2012, Taiwan’s AUO sued two of its former executives in Taiwanese court alleging that they had leaked company secrets to China Star including AMOLED related technologies. “AUO Former Executives Are Suspected of Selling OLED Technology to Chinese Companies,” OLED-Info.com, October 16, 2012.

¹⁴⁸ Hisense chairman Xu Haisheng is a Chinese professor at East China University who studied for a doctorate in the Material Research Institute and Department of Electrical Engineering at Penn State, and subsequently served as a senior scientist with Intel. General Manager Zhou Yang, an American, has an engineering doctorate from Dartmouth and held a series of engineering positions with U.S. companies. <http://www.en.kshisense.com>.

students,” the company is located in the National Business Incubator for Returned Personnel Kunshan Development Zone, Jiangsu. In 2012, Hisense unveiled a new inkjet deposition and analysis system, IJDAS-300, which is capable of jetting a wide range of functional fluids using multiple deposition print heads interchangeably.¹⁴⁹

Government Supported Research Institutes

China’s manufacturing industries are commonly supported by government-backed industrial research institutes.¹⁵⁰ Several such institutes already exist to support China’s flexible electronics industry.

Industrial Institute of Printed Electronics

In September 2013, the Industrial Institute of Printed Electronics was established in Changzhou, Jiangsu Province, between Shanghai and Nanjing, by the municipal government and high-technology industrial park of Changzhou.¹⁵¹ The local government has committed to a first-phase investment of $16.4 million with “much more” in the second phase. The Institute will join with the Printed Electronics Fund Ltd. to form a consortium that will create companies to produce sensor and smart RFID tags, flexible TFTs, smart tags, flexible displays, and inkjet print heads. The fund company reportedly has registered capital of $49 million, which can be increased to $162 million “very soon.” The Institute’s function will be “to establish a platform for printed electronics tests, prototypes including a certain amount of production for sales, and to provide printed electronics companies with technical support. . . . The research focus will be centered on the integration of printed electronics applications and roll-to-roll mass production.”¹⁵² The Dean of

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¹⁴⁹ “Kunshan Hisense Electronics Introduces New Cost Competitive and Versatile Materials Printer,” Printed Electronics Now, September 10, 2012.

¹⁵⁰ For example, in one of China’s most dynamic manufacturing sites, the city of Shenzhen in Guangdoing province, the Chinese Academy of Sciences, a state organization, has established the Shenzhen Institutes of Advanced Technology (SIAT), which consist of five research institutes and numerous ancillary laboratories and research facilities. SIAT seeks to enhance the innovative capability of local manufacturing and service industries and to contribute to human resource development. SIAT maintains extensive research cooperation ties with foreign research organizations. It has established partnerships with more than 500 local enterprises and incubated 60 high-technology companies. “Into the Time Shenzhen Institutes of Advanced Technology,” <http://english.siat>.

¹⁵¹ Changzhou National Hi-Tech District is a national-level high-technology industrial development zone. It is the site of activity by more than 10,000 companies, including 1,500 foreign-invested entities, including Komatsu, ThyssenKrupp, Ashland, Fujitsu, Nikon, Hitachi, Hyuadai, and Denso. Broken down by sector, its companies are engaged in chemicals and new materials (23.1 percent), equipment manufacturing (41.3 percent), electronics (18.6 percent), and photovoltaics (13 percent). <http://www.invest-in-Cnd.cn/>.

¹⁵² “China Establishes Industrial Institute of Printed Electronics,” Flexible Substrate, November 2013; “Industrial Institute of Printed Electronics,” Printed Electronics World, October 29, 2013.

the new Institute is Dr. Zhang Xiachang, who was one of the 2002 co-founders of Enfucell, the first Finnish firm to be named a “technology pioneer” at the World Economic Forum in Davos.¹⁵³

Hong Kong Nano and Advanced Materials Institute

In 2006, the government of Hong Kong (Innovation and Technology Commission) set up five R&D centers for applied research in order to bridge the gap between scientists’ research and industrial application.¹⁵⁴ One of these was the Nano and Advanced Materials Institute Limited (NAMI), an entity funded by the Hong Kong government and owned by the Hong Kong University of Science and Technology (HKUST).¹⁵⁵ Key research themes have included nanotechnology-enabled/enhanced display and lighting devices, new high-performance light-emitting material, and nanoscale engineering in electronics.¹⁵⁶ In 2013, NAMI was reportedly working on development of transparent conductive films based on silver nanowire and a scalable printing technique.¹⁵⁷

Universities

South China University of Technology

The South China University of Technology’s School of Materials Science and Engineering operates a number of laboratories and centers pursuing research themes relevant to flexible electronics. Its State Key Laboratory of Luminescent Materials and Devices reportedly developed China’s first flexible AMOLED display in 2013.¹⁵⁸ The Guangdong Key Laboratory of High Performance and

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¹⁵³ Dr. Zhang was educated in China as a biochemical engineer. He moved to Finland to study the work of Dr. Aarne Halme, who was concentrating on research themes that later proved relevant to the development of flexible batteries. “Great Potential Seen in Soft Batteries,” Helsingin Sanomat, March 20, 2007.

¹⁵⁴ Hong Kong Innovation and Technology Commission, “LegGo Members Visit Hong Kong Science Park,” Press Release, July 18, 2011.

¹⁵⁵ “Printable Transparent Conductive Films and Its Applications in Organic Solar Cells,” Flexible Substrate, January 2013. Total government funding for NAMI during its first 5 years of operating was HK $400 million ($52 million). Dr. Jiyun Feng, Commercialization of Nanotechnology Products in Hong Kong: Strategy and Progress (presentation at International Nanotechnology Business Summit, Tokyo, February 21, 2007).

¹⁵⁶ Feng, Nanotechnology Products in Hong Kong.

¹⁵⁷ “Flexible Transparent Conductive Films and Its Application in Organic Solar Cells,” Flexible Substrate, January 2013.

¹⁵⁸ The device was reportedly 4.8 inches, rollable, flexible and bendable, and resistant to mechanical shock. It was developed jointly with Guanzhau New Horizons Optoelectronic Technology Co. Ltd. “China Successfully Developed its First Flexible Display,” ChinaAbout.net, August 12, 2013.

Functional Polymer Materials conducts research on themes that include polymer photoelectric materials and devices.¹⁵⁹

City University of Hong Kong

In 2011, it was disclosed that Arizona State University (ASU) would collaborate with the City University of Hong Kong in the field of flexible microelectronics. The two institutions collaborated on a proposal for the National Science Foundation (NSF) Engineering Research Center on large area sensing arrays, which would use bendable transistors in a plastic sheet to detect radiation and biomarkers. ASU proposed to provide pilot time manufacturing capability in flexible electronics, and the City University offered expertise in flexible nanowires.¹⁶⁰

Zhejiang University

Zhejiang University in Hangzhou has reported results of research to develop materials for microencapsulation of electrophoretic displays.¹⁶¹

Shanghai Jiao Tong University

Researchers at Jiao Tong have reported use of vacuum filtration to deposit single-wall carbon nanotube films on paper substrates, enabling the creation of patterned nanotube films fabricated as flexible electrodes. The paper-based flexible electrodes were said to “show great potential in flexible display technology.”¹⁶²

TAIWAN

Taiwan’s entire national developmental effort in flexible electronics is centered on a single organization, the government Industrial Technology Research Institute (ITRI), which is recognized as one of the premier institutes of applied research in the world. ITRI, which translates basic research into commercial products and industrial processes, is perhaps the principal reason Taiwan has secured a leading position in some flexible electronics product areas (e-paper) and relevant industrial processes (adapting conventional LCD production lines to the production of flexible displays). Taiwanese companies have proven adept at moving products to market quickly, driving down manufacturing costs, and

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¹⁵⁹<http://202.38.194.245/hgschool/materials>.

¹⁶⁰ “ASU and University of Hong Kong to Work Together on Advanced Flexible Electronics,” Flexible Substrate, December 2011.

¹⁶¹ “Materials for the Microencapsulated Electrophoretic Display,” Flexible Substrate, June 2012.

¹⁶² “Flexible Electrodes Using Single-Wall Carbon Nanotubes Patterned as Paper Substrate,” Flexible Substrate, March 2012.

building the necessary supply chains. Japanese electronics firms, facing an existential crisis in the face of Korean competition, are increasingly seeking support and tie-up with ITRI and Taiwanese companies.

Notwithstanding its demonstrable strengths, Taiwanese leaders worry that their country lags in innovative thinking and that young people, in particular, are too risk averse with respect to startups. The Taiwanese IT manufacturing method of “accepting detailed computer performance benchmarks from American customers and then figuring out the least expensive way to meet those benchmarks . . . may also be an obstacle to innovation now. The least expensive approach often involves barely exceeding the benchmarks, and not coming up with solutions that may cost more but dazzle consumers.”¹⁶³ Most of all, Taiwanese leaders wonder whether their domestic industries can successfully match the financial resources, IP portfolios, and bold investments of Korea’s chaebol firms.

Taiwanese scientists have been engaged in basic research relevant to flexible electronics since the 1970s. Research with respect to potential industrial applications began around 2000.¹⁶⁴ In 2004, Chen Liang-gee, Director of the Electronics and Optoelectronics Research Laboratories (EOL) at ITRI, proposed that his organization launch a research effort in flexible electronics:

ITRI established a Flexible Electronics Technology Division in July 2005 and within a year it was staffed by 31 professionals. In August 2005, for the first time at the annual meeting of the Cabinet-level Science and Technology Advisory Group (STAG), flexible electronics was the focus of discussion. Following the meeting the government decided to begin earmarking funds to ITRI to pursue research in the field, with an emphasis on flexible displays.¹⁶⁶

Government Entities Supporting R&D

Ministry of Economic Affairs (MOEA)

MOEA is Taiwan’s central entity responsible for economic planning, industrial policy, and program implementation. It supervises and provides one-half of the financial support for the ITRI, Taiwan’s largest research organization, which

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¹⁶³ “In Taiwan, Lamenting a Lost Lead,” The New York Times, May 12, 2013.

¹⁶⁴ Professor Chen Show-an, Department of Chemical Engineering, National Tsing Hua University, in “Bendable, Rollable, Profitable,” Taiwan Review, July1, 2006.

¹⁶⁵ Chen-Liang-gee in “Bendable, Rollable, Profitable,” Taiwan Review, July 1, 2006.

¹⁶⁶ Ibid.

TABLE 6-7 MOEA Funding of Flexible Electronics R&D (2010)

SOURCE: Dr. Janglin (John) Chen, Flexible Electronics Development in Taiwan, September 24, 2010.

spearheaded the development of the country’s semiconductor and electronics industries. MOEA is the principal source of funding for Taiwan’s R&D in the field of flexible electronics. (See Table 6-7.) According to 2010 data from the leading international association for organic electronics, OE-A, between 2006 and 2013 Taiwanese government investments in printed electronics were about $200 million.¹⁶⁷

Industrial Technology Research Institute (ITRI)

ITRI is a not-for-profit institute for applied industrial research and development. One-half of its operating budget of $510 million is provided by MOEA and half by the private sector. Most of its operations consist of R&D projects involving collaboration with and funding by private companies, to which research results are transferred for development into commercial products. Some ITRI research units have been spun off to form successful private companies, including the United Microelectronics Corporation (UMC), Taiwan Semiconductor Manufacturing Corporation (TSMC), Vanguard International Semiconductor Corporation, and the Taiwan Mask Corporation. ITRI also provides logistical support for startup enterprises at its Incubation Center and its Open Laboratory program. Greater than 60 percent of ITRI’s 6,000 employees hold graduate degrees in the sciences. ITRI has amassed more than 10,000 patents and assisted in the creation of more than 165 spinoffs and startups. Seventy CEOs of high-technology companies are former ITRI staffers.¹⁶⁸

ITRI’s managers characterize their organization as a “technology intermediary” between the research community and Taiwanese industry. ITRI’s primary function is not research—although it performs substantial research—but adaptation and transfer of research results and technology from Taiwanese and foreign laboratories (public and private) to domestic companies and industry. Technology is transferred to Taiwanese companies through licensing agreements, various co-development projects, spinoffs, patent auctions, migration of ITRI personnel to companies, and research consortia and alliances. (See Figure 6-3.)

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¹⁶⁷ Andrew Hannah, CEO, Plextronics, “The Global View of Printed Electronics and What It Could Mean to the U.S,” September 24, 2010.

¹⁶⁸ ITRI, “What is ITRI?” <http://www.itri.org.tw>.

FIGURE 6-3 ITRI as a technology intermediary.

ITRI is “arguably the most capable institution of its kind in the world in scanning the global technological horizon for developments of interest in Taiwanese industry, and executing the steps required to import the technology—either under license or joint development—and then absorbing and adopting the technology for Taiwanese firms to use.”¹⁶⁹ ITRI maintains an extensive network of technology collaborations and alliances with first-tier high-technology multinationals and research organizations.¹⁷⁰

Taiwan’s entry into the field of flexible electronics was made possible by friendly transfer of technology from Eastman Kodak Company to ITRI. Dr. John Chen, a Taiwanese scientist who served in various R&D roles at Kodak from 1982 through 2006, was able to facilitate transfer of technology for large area R2R fabrication of flexible displays from Kodak to ITRI after Kodak decided to abandon commercialization and sell technology “to someone who was competent.”¹⁷¹ Chen led an ITRI team to Kodak’s laboratories in Rochester where a Kodak team worked with them to facilitate the technology transfer, which included transfer of know-how and equipment. ITRI’s subsequent development of flexible displays has surpassed the highest technological levels achieved by Kodak but was “all

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¹⁶⁹ John A. Mathews and Dong-Sung Cho, Tiger Technology: The Creation of a Semiconductor Industry in East Asia (Cambridge: Cambridge University Press, 2000).

¹⁷⁰ See National Research Council, 21st Century Manufacturing: The Role of the Manufacturing Extension Partnership Program (Washington, DC: The National Academies Press, 2013).

¹⁷¹ See National Research Council, 21st Century Manufacturing: Flexible Electronics for Security, Manufacturing, and Growth in the United Sates: Summary of a Symposium. Washington, DC: The National Academy Press, 2013, p. 76.

based on Kodak technology.” Chen observes that “this was the beginning of flexible displays in Taiwan.”¹⁷²

ITRI’s principal research activities are conducted in six thematic “core” laboratories: and roughly a half dozen “technology centers” that focus on strategic topics and seek to integrate the multiple disciples of the various core laboratories. The core laboratories pursue “deeper and newer” ideas in areas such as materials, electronics, measurement, and machinery whereas the technology centers combine and integrate those competencies with an eye toward commercialization in sectors such as cloud computing, biomedicine, and flexible displays. In flexible electronics, the ITRI core laboratories pursuing relevant research themes are the Electronics and Optoelectronics Research Laboratories (EOL), the Material, Chemical and Nanotechnology Research Laboratory, and the Mechanical and Systems Laboratory.

ITRI’s Electronics and Optoelectronics Research Laboratory has developed electro-optical substrate and “FlexLite” technologies that use “soft silicone packaging technology and circuit design to develop a flexible lighting technology with a thickness of 0.5 cm.”¹⁷³ FlexLite enables designers to “sculpt any lighting forms they wish, and any soft light source applied to the design can be used.”¹⁷⁴ Two core technologies are involved:

• The LED is a light source that emits heat, requiring a high thermal conductivity structure, so ITRI used graphene structure technology to the back of the light, achieving the requisite thermal conductivity.
• An optical absorption structure was established in the front of the lamp housing, allowing use of a flexible honeycomb structural design to achieve uniform effects without glare.

ITRI’s Display Technology Center (DTC) is one of several internal “Technology Focus Centers” established to promote interdisciplinary collaborations involving ITRI’s specialized research laboratories. DTC’s main facility is a 3,124 square meter second generation laboratory pilot line (glass substrate size 370 × 470 mm²) that has been used to produce 20-inch TFT-LCDs. Clean room class ranges from 10 to 10,000, covering array, cell, and module assembly processes.

DTC is capable of addressing the entire vertical chain of display technology, including design, fabrication, packaging, materials, component, process, and equipment to the system level. (See Figure 6-4.) DTC commonly engages in contract services, joint R&D, technology transfer, cross-licensing, and evaluation and verification of customers’ flexible displays materials, equipment, and systems.

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¹⁷² Interview with John Chen, Director, ITRI Display Technology Center, Hsinchu, Taiwan, February 14, 2012.

¹⁷³ ITRI, “Flexible Electronics Packing a Punch,” March 31, 2011.

¹⁷⁴ Ibid. Arif S. Ergun et al., “Capacitative Micromachined Ultrasonic Transducers; Theory and Technology,” Journal of Aerospace Engineering, April 2003.

FIGURE 6-4 ITRI Flexible Display Program integration.
SOURCE: Dr. Janglia (John) Chen, ITRI Display Technology Center, “ITRI Display Programs,” February 14, 2012.

DTC’s objective is to position Taiwan as a leader in the field of flexible displays, which it forecasts will achieve global revenues of $4 billion by 2015. ITRI research groups are addressing a number of themes in flexible display technology:

• Flexible substrate technology. ITRI has developed flexible substrate process technology using amorphous silicon (a0Si). TFT and an organic TFT process have been developed to meet the requirements of TFT-LCD/AMOLED applications. ITRI is also developing process technology for gas barrier layers for AMOLEDs.¹⁷⁵ ITRI developed polymer-based ultrasonic paper (PUP) for use in physiotherapy and sensing, which is believed to have potential as a flexible substrate for various printed electronic components. Polymer-based ultrasonic paper was the first flexible technology in the field of capacitive micromachined ultrasonic transducers (CMUTs)¹⁷⁶ A flexible CMUT technology could permit

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¹⁷⁵ In May 2011, ITRI received the silver award for “Display Component of the Year,” given by the Society for Informath Display, the leading global display group, for its flexible substrate for displays. According to ITRI the substrate is the first and only technology that permits the mass production of flexible and transparent displays of all sizes. “ITRI Wins Prominent Display Technology Award from Industry Group,” Central News Agency, May 19, 2011.

¹⁷⁶ CMUTs are devices that generate and receive sound waves at ultrasound frequencies. They are made of small and thin membranes suspended over a conductive silicon substrate by insulating posts. The membranes that comprise the CMUT are micromachined onto a silicon substrate. See generally

• each ultrasonic transducer to remain within an array perpendicular to the relevant object’s surface during ultrasonic transmission and reception.¹⁷⁷

• Flexible display media technology. ITRI has developed a monochrome cholesteric liquid crystal display (Ch-LCD) flexible display built on a plastic substrate based on R2R manufacturing technology, suitable for large-size public displays. ITRI has developed a 10.4-inch color display featuring plastic substrates and a total thickness of less than 10 mm. ITRI has developed electrowetting display (EWD) technology that can create an optical shutter with switchable liquids or change the visual area of colored liquids allowing wide-angle display applications. In June 2011, ITRI won R&D Magazine’s R&D 100 Award for development of rewritable e-paper, i2R e-paper, based on a new type of polarizer protector film named HyTAC. The technology utilizes organic and inorganic nanomaterials, a highly transparent optical film and low-toxicity manufacturing processes.¹⁷⁸
• Flexible thin-film transistor array technology. ITRI has developed flexible silicon-based TFT array technology. It has integrated highly accurate photolithography processes on flexible substrates using organic thin-film transistor (OTFT) and OLED technology.
• Flexible display system technology. ITRI has developed “the electronic devices and circuits to integrate a complete system for image processing, power supply,” microprocessor and memory control; driving systems for displays; and “a color image quality assessment instrument and processing technology to evaluate and monitor performance of flexible color displays.”¹⁷⁹

ITRI has taken a leadership role in organizing Taiwanese industry to commercialize emerging flexible electronics technology. In 2005, ITRI set up the Flexible Electronic Promotion Alliance in collaboration with the government, academia, and private manufacturers. ITRI hosted a flexible electronics technology forum, with more than 150 invitees from government, academia, and industry and “invited local makers, from upstream, to downstream, to set up the alliance, hoping to integrate related material, production processes, devices, finished products and equipment to form a platform for academy-industry interchanges.”¹⁸⁰ At the time ITRI’s EOL then-Director General, Chen Lian-gee, commented that

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Arif S. Ergun et al., “Capacitative Micromachined Ultrasonic Transducers; Theory and Technology,” Journal of Aerospace Engineering, April 2003.

¹⁷⁷ “Flexible Electronics Pilot Lab and New Electronic Paper in Taiwan,” Printed Electronics World, June 8, 2007.

¹⁷⁸ “ITRI Wins Further Prestigious R&D Awards,” Central News Agency, June 23, 2011.

¹⁷⁹ Ibid.

¹⁸⁰ “ERSO to Set UP Flexible Electronics Alliance in July,” Taiwan Economic News, May 19, 2005.

TABLE 6-8 ITRI Assigns Technological Roles to Individual Companies

SOURCE: ITRI Display Technology Center Presentation (February 14, 2012).

Janglin Chen, Vice President and General Director of DTC, concurrently serves as Chairman of the Taiwan Flat Panel Display Materials and Devices Association. Chen points out that ITRI assigns technological roles to individual companies and that DTC’s research projects in flexible electronics represent “a complete manufacturing chain in its early stages.”¹⁸² ITRI thus works with not only displays companies such as AU Optronics, but also materials and systems suppliers. (See Table 6-8.)

In 2010, DTC announced the development of FlexUPD, a technology that enables manufacturers of display panels “to convert their existing production lines and panels for glass panels to flexible displays with minimal investment in new equipment.”¹⁸³ FlexUPD was honored as The Wall Street Journal’s 2010 TIA Gold Winner and was one of R&D Magazine’s R&D 100 winners. Because FlexUPD can be introduced by adapting existing mainstream LCD production lines, by adding coating and debonding equipment, it is a technology that requires minimal new investments by the display industry in order to manufacture bend-

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¹⁸¹ “Bendable, Rollable, Profitable,” Taiwan Review, July 1, 2006.

¹⁸² Interview with DTC Director Janglin Chen, Hsinchu, Taiwan, February 14, 2012.

¹⁸³ ITRI, “Flexible Electronics Packing a Punch.” FlexUPD is based on an ultra-thin, transparent, soft plastic substrate. Dr. Janglin Chen, General Director of the DTC, described the process steps in 2013: “Once the transistors are layered on the plastic substrate and enclosed, the substrate can be cut and peeled off the glass substrate to make a flexible display. The secret lies in the instant debonding/removal process. It is like a layer of non-stick material between a crepe and a pan. In addition to letting the crepe slip off the pan easily, the non-stick layer does not damage the filling in the crepe. This innovative technology is more advanced and cost-efficient than the metal film substrates and laser removal technology used by some leading display manufacturers.” “Q&A: Dr. Janglin Chen of ITRI (Part I),” The Emitter, July 3, 2013.

able, foldable, and rollable electronic devices. Dr. Chen stated in a July 2013 interview that since ITRI began winning awards for FlexUPD,

In 2007, ITRI established a Flexible Electronics Pilot Laboratory to perform R&D on flexible electronics and develop international cooperation in the field.¹⁸⁵ Its initial activities included development of production process R&D for flexible electronic circuits, flexible solar cells, flexible reactors, and flexible displays. The Pilot Laboratory prioritized development of machinery for continuous processes. ITRI indicated it would establish an industry alliance to carry out joint efforts to establish high-performance flexible electronic production lines. The Pilot Laboratory established a production process for 25 centimeter wide lithography and three processes for inkjet printing and screen printing.¹⁸⁶

The Emerging Alliance with Japan

In 2013, the Taiwanese magazine Business Today published a cover story accusing Samsung of plotting to “kill Taiwan,” targeting the island’s technology-intensive industries. Although a number of Taiwanese CEOs expressed doubt that Samsung had any such intention, the article underscored the extent to which Taiwan is concerned about the competitive challenge posed by Korean firms in advanced technologies, particularly semiconductors, computers, displays, and smartphones.¹⁸⁷ Taiwanese electronics companies are increasingly responding to Korean competition by forming alliances with companies in Japan, in particular, and to a lesser degree, the United States and Europe, involving the thematic areas relevant to flexible electronics.

Taiwanese high-technology companies have been pursuing technology alliances with Japanese firms for many years, and such collaborations have become more feasible as Taiwan has caught up with Japan in the information

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¹⁸⁴ “Q&A: Dr. Janglin Chen of ITRI (Part I),” The Emitter, July 3, 2013.

¹⁸⁵ Domestic and foreign companies, universities, and research organizations are welcome to conduct R&D at the Pilot Laboratory, which was tasked with forming international R&D alliances.

¹⁸⁶ “Flexible Electronics Pilot Lab and New Electronic Paper in Taiwan,” Printed Electronics World, June 8, 2007.

¹⁸⁷ “Samsung Cannot ‘Kill Taiwan’ CEOs,” Taipei Times, March 23, 2013; “Taiwan Tries to Shore Up its Defenses Against Taiwan,” The New York Times, April 21, 2013.

TABLE 6-9 Comparison of Strengths and Weaknesses of Japanese and Taiwanese Electronics Companies

SOURCE: Based on Hiroko Shimpo, Business Alliances Between Japanese and Taiwanese Companies (Osaka Sang Yo University, November 2, 2011).

technologies.¹⁸⁸ When Taiwanese firms entered the LCD market in the late 1990s, in almost every case they formed strong affiliations with Japanese firms.¹⁸⁹ In contrast to relations between some former colonies and their previous rulers, relations between Taiwan and Japan have been close historically.¹⁹⁰ Taiwanese and Japanese electronics companies enjoy mutual complementarities that can potentially offset the weaknesses of the other. (See Table 6-9.)

Terry Gou, the CEO of Hon Hai Precision Industry, the Taiwanese firm commonly known as Foxconn, the world’s biggest contract manufacturer of electronics, explained the logic of a Taiwan-Japan tie-up in 2011 as follows:

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¹⁸⁸ “Taiwan Enters Japan’s Semiconductor Supply Chain,” Taiwan Insights, April 4, 2012. In 2011, Taiwan’s Presidential Office and Cabinet formed a Taiwan-Japan exchange promotion office with the goal of securing “long-term partnership between Taiwan and Japan, not just for a few years.” “More Japan Firms Planning to Invest in Taiwan,” China Post Online, March 3, 2011.

¹⁸⁹ Mei Chi Hu, “Technological Catching-up in East Asia,” in International Economic Development: Leading Issues and Challenges, 84.

¹⁹⁰ Japanese rule (1845-1945) was characterized by significant investments in industry, utilities, agriculture, and educational infrastructure, providing a solid base for Taiwan’s modernization in the post–World War II era. Japanese colonial administration was relatively enlightened and did not result in the kind of lasting antipathy toward Japan found elsewhere in East Asia as a legacy of the Greater East Asia Co-Prosperity Sphere. Thomas R. Howell, Alan Wm. Wolff, Brent L. Bartlett, and R. Michael Gadbaw, eds. Conflict Among Nations: Trade Policies in the 1990s (Westview Press, 1992), 312–317.

For a variety of historical and practical reasons, potential technological alliances between Taiwanese or Japanese firms, on the one hand, and Korean firms, on the other hand, do not share the same complementarity and are therefore less likely to materialize.¹⁹²

Collaborations between Taiwanese and Japanese electronics firms began with an alliance in semiconductors between Japan’s Elpida Memory, Inc. and Taiwan’s Powerchip Technology Corporation in the early 2000s. Powerchip subsequently established a joint venture with Japan’s Sharp and Peneasas in LCD drivers. In 2010, Hon Hai bought a majority interest in Hitachi Displays Ltd. with the intention of establishing a factory in Japan to produce small LCD panels.¹⁹³ In the wake of the 2011 Fukushima earthquake and destructive floods in Thailand, Japanese electronics firms, confronting disrupted supply chains as well as the need to control costs, have outsourced key manufacturing operations to Taiwan, including production of 28 mm memory devices, and have increased their investments on the island.¹⁹⁴ These moves have been paralleled by the development of closer ties between ITRI and Japanese businesses, with ITRI “increasingly becoming the place from which Japanese medium-sized businesses seek advice,” ITRI’s venture capital arm, the Industrial Technology Investment Corporation, established a fund in 2011 with Japan’s Mitsui Sumitomo Insurance Venture Capital that invests in Japanese and Taiwanese companies.¹⁹⁵ In August 2013 ITRI and Japan’s Komari Machinery Co. disclosed joint development of a non-lithography

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¹⁹¹ Hiroko Shimpo, Business Alliances Between Japanese and Taiwanese Companies (Osaka Sang Yo University, November 2, 2011), citing Nikkei Business, <http://www.nikkeibp.co.jp/article/NEWS/20110614/1925531>.

¹⁹² Some major Japan-Korea company alliances exist, such as the mutual-shareholding arrangement between steelmakers Nippon Steel Corporation and the Pohang Iron and Steel Corporation (POSCO). However, electronics companies in Japan and Taiwan commonly compete head to head with Korean firms and regard them as major competitors. Many Koreans harbor nationalistic suspicion of Japan, a fact that hinders both sides from building a long-term, stable and cooperative relationship.” Shimpo, Business Alliances, 52.

¹⁹³ “Hon Hai to Invest $1.2 Billion in Hitachi LCD Unit,” Reuters, December 27, 2010.

¹⁹⁴ “Taiwan Enters Japan’s Semiconductor Supply Chain,” Taiwan Insights, April 4, 2012. In 2011, Toray, a major Japanese maker of photovoltaic thin-film devices, announced plans to establish a manufacturing plant in Taiwan. “More Japan Firms Planning to Invest in Taiwan,” China Post Online, May 3, 2011.

¹⁹⁵ Chang-Chien-Chung and Ann Chen, “Top Industrial Research Body Praised for Helping Japanese Firms,” Central News Agency, February 5, 2013.

R2R printing technology that can be used to fabricate touch panels, cutting manufacturing time and cost.¹⁹⁶

ITRI-Kaneka

In 2013, ITRI disclosed that in collaboration with Japanese polymer substrate firm Kaneka Corporation it had co-developed a new flexible oxide semiconductor TFT backplane for applications in mass-produced AMOLED displays. The two parties have reportedly overcome the technical challenge posed by the fact that stress occurring in the TFT fabrication easily destroys flexible TFT devices. The new substrate reportedly meets the requirements of high transparency and high temperature resistance.¹⁹⁷

ITRI-Komori

In 2013, ITRI and Japan’s Komori International disclosed development of a new fine-line printing technology that will enable replacement of seven different pieces of equipment with one direct-printing station. The new technology is expected to enable printing of fewer than 10 microns, fine metal lines and enhance materials utilization in R2R manufacturing operations.¹⁹⁸

E Ink/Sony

Taiwan’s E Ink Holdings developed the original concept of electronic paper and the technology used for e-ink screens on dedicated e-readers. In 2013 it introduced E Ink Mobius in conjunction with Sony, which created the device’s electronics and which will use it in a new series of e-reader products it will commercialize in 2014. E Ink is reportedly working with Sony to develop large-screen display e-readers for educational use. The E Ink Mobius e-reader features a flexible display encapsulated in a rigid glass. Its creator, Giovanni Mancini, says that the critical issue is not whether the screen can be folded, but whether it is lighter and more durable and consumes less power than conventional backlit screens on tablets and phones.¹⁹⁹

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¹⁹⁶ Tsutomu Niitsuma, representative director of Komari, commented that “our great collaboration proves that printed electronics can lead to innovations for existing products.” “ITRI Lifts Lid on Advanced Printing Tech for Lower Priced Touch Panels,” The China Post Online, August 27, 2013.

¹⁹⁷ “ITRI and Kaneka Unveil New Flexible Display Technology,” ITRI Today, April 3, 2013.

¹⁹⁸ “ITRI and Komori Announce New Fine-Line Printing Technology,” Flexible Substrate, November 2013.

¹⁹⁹ “E Ink, Sony Debut New Flexible Screen Technology,” Publisher’s Weekly, May 23, 2013; “The Glass is Half Full …,” Flexible Substrate, May 2013.

AUO-Idemitsu

In 2012, Taiwan’s AU Optronics entered into an alliance with Japanese display maker Idemetsu Kosan Co. Ltd. to jointly develop next-generation OLED displays “in an attempt to catch up with rivals [e.g., Samsung] making the high-resolution panels for smartphones and TVs.”²⁰⁰ AU Optronics’ OLED manufacturing technology was reportedly about 2 years behind that of Korea. Under the firms’ agreement, Idemitsu delivers high-performance OLED materials to AU Optronics for applications in OLED panels for smartphones and tablet PCs.²⁰¹ The alliance is intended to “allow AUO to make up its shortcoming in materials and patent layout by shortening its development cycle.”²⁰²

AUO-Sony/Panasonic

In 2011, Japan’s Sony Corporation ended a 50-50 joint venture with Samsung for the production of FPDs, and Sony was reportedly looking for ways to diversify its supply sources of LCD panels.²⁰³ In June 2012, Sony and Panasonic disclosed that they would collaborate on OLED television development in an effort to counter Korean competition.²⁰⁴ In early 2012, it was reported that Taiwan’s AU Optronics was collaborating with Sony on OLED production and that Sony would buy all of AU Optronic’s AMOLED production over the next term.²⁰⁵ In January 2013 AU Optronics announced that it had successfully co-developed with Sony a 56-inch OLED TV panel, then the world’s largest, with 4K resolution.²⁰⁶

Toppan-Chi Lin

In 2011 Japan’s Toppan Printing concluded a collaboration agreement with Taiwan’s Chi Lin Technology Co., Ltd., a member of Taiwan’s Chi Mei Group, to co-develop e-paper for applications in electronic price tags, logistics instruction labels, and retail point-of-sale displays.²⁰⁷

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²⁰⁰ Lisa Wang, “AUO Signs Accord with Idemitsu to Manufacture OLEDs,” Taipei Times Online, February 3, 2012.

²⁰¹ “AUO Signs OLED Cooperation Agreement with Idemitsu Koscan,” The Emitter: Emerging Displays Technology Monthly Report, February 2012.

²⁰² “Taiwan Enters Japan’s Semiconductor Supply Chain,” Taiwan Insights, April 4, 2012.

²⁰³ “Sony More Open to TV Panel Sourcing,” Central News Agency, December 28, 2011.

²⁰⁴ “Panasonic and Sony Confirm Plans to Join Forces for OLED TV Development,” Whathifi.com, June 25, 2012.

²⁰⁵ “Sony to Buy All of AUO’s OLED Capacity for Its Mobile Phones?,” OLED-Info.com, April 6, 2012; “AUO to Raise Money for OLED TV Production, Collaborates with Sony?,” OLED-Info.com.

²⁰⁶ “AUO, Sony Co-develop World’s 1st 4K OLED TV Panel,” Central News Agency, January 9, 2013.

²⁰⁷ Pursuant to the agreement, Toppan Printing acquired shares in a newly formed Chi Lin subsidiary, Pervasive Displays Inc., and Toppan committed to sell Pervasive Displays products in the

Other International Alliances

Taiwanese entities have also entered into significant collaborations with partners based in the United States and Europe. In 2010, Taiwan’s AU Optronics Corporation, one of the world’s leading makers of TFT-LCDs, announced that it had become an industry partner of Arizona State University’s Flexible Display Center (FDC). The two entities will “collaborate on the development of mixed oxide thin film transistors to accelerate the commercial availability of active-matrix organic light-emitting diode (AMOLED) flexible displays.”²⁰⁸ Yong-Hong Lu, Vice President of AU Optronic’s Technology Center, said that “the FDC has significant experience in adapting standard flat panel display manufacturing technologies for use with flexible substrates, which is a critical aspect of being able to bring flexible AMOLEDs to market. Working with the FDC offers us an opportunity for flexible substrates and [to] participate in the development of viable approaches to commercialization.”²⁰⁹

ITRI and Corning have been collaborating since 2011 to develop R2R process technology for flexible glass. ITRI’s competency in R2R processing of plastic substrates is complemented by Corning’s glass handling expertise. The two parties have developed an R2R process for 100 µm flexible glass substrates and R2R machines that produce touch panel modules on Corning Willow Glass, a flexible-display-quality substrate. In addition to touch screens, ITRI indicates the new processing technology can be used for applications in photovoltaics and OLED lighting.²¹⁰

Sollink is a Taiwan-based joint venture between Qualcomm MEMS Technology, a subsidiary of Qualcomm Communications specializing in displays for mobile devices, and Taiwan’s Cheng Uei Precision Industry Co., Ltd., a contract electronics manufacturer. Sollink is working to combine Qualcomm’s Mirasol display technology with flexible e-paper.²¹¹

In 2008, Germany’s Bayer Group disclosed plans to open two R&D centers in Taiwan, one of which would focus on industrial applications of functional films that are widely used in flexible and printed electronics applications. The center was expected to expand cooperation with local universities in its developmental efforts.²¹²

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Japanese market. “Toppan Printing and Taiwan’s Chi Lin Collaborates to Launch Electronic Paper Business Targeting Use in Industry,” Printed Electronics Now, May 12, 2011.

²⁰⁸ “The Flexible Display Center and AUO Enter Strategic Partnership to Accelerate Flexible AMOLED Development,” Nanowerk, November 16, 2010.

²⁰⁹ Ibid.

²¹⁰ “ITRI and Corning Collaborate on Roll-to-Roll Flexible Glass for Touch,” The Emitter: Emerging Display Technologies, November 30, 2012.

²¹¹ Mirasol technology features ultralow power consumption and good viewing quality even in sunlight. “E-Paper Makers Set Sight on Flexible Material Technology,” Taiwan Economic News, December 7, 2010.

²¹² “Bayer to Establish Two New R&D Centers in Taiwan,” Central News Agency, October 9, 2008.

Key Companies

E Ink Holdings (Prime View International)

E Ink (formerly Prime View International) is the world’s leading producer of ePaper, holding greater than 90 percent of the world’s reader market, comprised of companies such as Amazon, Sony, and Barnes and Noble. E Ink also produces ePaper for applications in watches, signage, electronic shelf labels, credit cards, and battery and memory indicators. Based in Hsinchu Science Park, E Ink is a subsidiary of the Yuen Fuong Yu Group, Taiwan’s largest paper producer. Founded under the name Prime View International in 1992, the company entered the market for ePaper display modules. In 2009, Prime View acquired Massachusetts-based E Ink Corp. for $215 million. E Ink produced e-paper displays for the Amazon Kindle and the Sony Reader, and following the acquisition, Prime View became the largest supplier of e-paper in the world, with a 90 percent market share in 2010.²¹³ In 2010, Prime View changed its name to E Ink Holdings, although it is still sometimes referred to as PVI or Prime View. In 2011, E Ink entered into a collaboration with Japan’s Seiko Epson, the world’s largest supplier of controller chips, to develop and produce e-paper displays for sale in the Japanese and Chinese markets.²¹⁴

In 2012, E Ink concluded an agreement to acquire SiPix Technology Inc. and its wholly owned subsidiary, SiPix Imaging Inc., from AU Optronics. The acquisition gave E Ink “complete control of the electrophoretic display technology that dictates the ePaper field,” and one observer commented that, with the acquisition, “if challenging E Ink’s supremacy in the ePaper market was hard before, it just became Sisyphean.”²¹⁵ E Ink currently holds more than 2,000 patents on ePaper, LCD technology, and other technologies. Underscoring the strength of its intellectual property portfolio, in 2013 E Ink filed a patent infringement lawsuit in Germany against Trekstor and declared its readiness to “protect and defend its intellectual and other property worldwide.”²¹⁶

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²¹³ “AUO Aims for 10-fold Increase in E-Paper Shipments This Year,” Taiwan Economic News, February 10, 2011.

²¹⁴ The two firms will jointly develop 300-dpi high-resolution displays for use in commercial and educational e-book readers with screen sizes above 11 inches in size. The technology is intended to achieve better visibility of Japanese and Chinese characters. Epson will manufacture and provide a high-speed display controller platform for e-paper displays, incorporating a display controller integrated circuit (IC), processor, power supply IC, and associated software. PVI will manufacture the e-paper display.

²¹⁵ “E Ink Acquires SiPix, May Dominate ePaper Universe,” Engadget, August 4, 2012.

²¹⁶ “E Ink Files Patent Infringement Lawsuit Against Trekstor,” Flexible Substrate, January 2013.

AU Optronics Corp.

AU Optronics Corp. is the largest TFT-LCD manufacturer in Taiwan.²¹⁷ In March, 2009, AU Optronics acquired a 31.58 percent equity stake in SiPix Imaging, based in Fremont, California.²¹⁸ SiPix is a major developer of e-paper technologies, including R2R production technologies and novel materials for e-displays. SiPix has “filed over 100 patent applications and has developed a core expertise in roll-to-roll based display solutions and integration.”²¹⁹

During the first half of 2010, AU Optronics was forced to shut down its production line for SiPix e-paper due to “technical problems” that were subsequently resolved. The company indicated in February 2011 that it foresaw an 8- to 10-fold increase in e-paper sales in 2011 over 2010 levels and that it expected to achieve a 20 percent market share in the global e-paper market in 2011.²²⁰ The sale of SiPix to E Ink followed in 2012.

Chin Lin Technology

Chin Lin Technology, part of Taiwan’s Chi-Mei Group, is a “leading design, engineering and manufacturing company specializing in backlighting technology, material sciences and advanced display systems.”²²¹ Chin Lin is one of the world’s most vertically integrated manufacturers of FPDs. In May 2011, Chin Lin announced the creation of a new subsidiary, Pervasive Displays Inc., for the design and manufacture of e-paper modules for use in commercial and industrial displays. “Pervasive Displays will develop low-power small-to-medium display components for applications in logistics, price tags, medical devices, automation, smart labels and energy control panels.” In April 2011, Chin Lin and Japan’s Toppan Printing Co., Ltd. entered into an agreement pursuant to which Toppan will sell Chin Lin manufactured e-displays into Japanese industrial markets.²²²

Delta Electronics, Inc.

Delta Electronics, based in Taiwan, is the world’s largest provider of switching power supplies and DC brushless fans. It also produces electronic displays and components, renewable energy products, and industrial automation

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²¹⁷ AU Optronics was formed in 2001 through the merger of Acer Display Technology, Inc. and Unipac Optoelectronics Corporation. In 2006, the combined entity acquired Quanta Displays, Inc.

²¹⁸ The SiPix shares, valued at $30 million, were acquired by two AU Optronics subsidiaries, Konly Venture and Ronly Venture.

²¹⁹<http://Sipix.com>.

²²⁰ “AUO Aims for 10-fold Increase in E-Paper Shipments This Year,” Taiwan Economic News, February 10, 2011.

²²¹ German Trade Office, Taipei, “Bayer Material Science, Bayer Taiwan, and Chi-Lin Technology Launch a New Era in Taiwanese Opto-electronics Industry,” March 11, 2011.

²²² Yahoo Finance, “Chi-Lin Announces Formation of Pervasive Displays Inc.,” May 3, 2011.

technology. In January 2011, Delta announced that it had developed a range of color e-paper technologies in collaboration with Bridgestone Corporation based on the latter company’s Quick Response Liquid Powder Display (QR-LPD) technology. “Delta’s focus is on downstream development [of this technology], such as product design, software and hardware integration, and the development of applications for the consumer electronics and business-professional markets.”²²³ Bridgestone will market its e-paper modules under its AeroBee brand name,²²⁴ and “Delta will use the modules to develop next generation products and applications.”²²⁵

University R&D

National Tsing Hua University

National Tsing Hua University, located in Hsinchu, is one of the most highly regarded universities in Taiwan, with particular strengths in the sciences and engineering.²²⁶ Tsing Hua’s Department of Materials Science and Engineering is engaged in R&D in themes with application to flexible electronics. In 2010, researchers from this department reported that they had succeeded in developing a direct growth fabrication method for paper-based electronics. They grew vertically aligned, highly crystalline, and defect-free single crystal zinc oxide nanorods and nanoneedles on paper to form prototype hybrid junction diodes and UV photodetectors. The scientists found that bending and twisting devices fabricated in this way had a negligible effect on electrical/mechanical fatigue properties of the diodes. “Repetitive bending of the diode affected the performance only marginally.”²²⁷ In 2011, National Tsing Hua University researchers reported development of a technology to make key components of flexible e-books and displays from silk proteins.²²⁸

National Taiwan Normal University (NTNU)

National Taiwan Normal University, based in Taipei, is one of Taiwan’s foremost universities. In January 2011, a research team led by Professor Kao

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²²³ “Delta Electronics Blazes a Trail in Color QR-LPD Electronic Paper Applications,” Central News Agency, January 5, 2011.

²²⁴ “New Technology Makes E-Paper Animation Displays Possible,” Central News Agency, January 4, 2011.

²²⁵ “Delta, Bridgestone to Develop New E-Paper Products,” Central News Agency, November 9, 2010.

²²⁶ One graduate Lee Yuan-tseh is the holder of a Nobel Prize in chemistry, the first Taiwanese to receive a Noble Prize.

²²⁷ “National Tsing Hua University Develops Direct Growth Fabrication for Paper-Based Electronics,” Flexible Substrate, November 2010.

²²⁸ “Taiwan Research Team Turns Silk into E-Display Material,” Asia Pulse, March 2, 2011.

Wen-chung at NTNU’s Silicon-on-Chip (SOC) Lab at National Taiwan Normal University unveiled a new technology that will make animation displays possible on e-paper and in electronic books. The e-paper developed in this project can be bent and folded and will allow moving pictures to be visible on items such as electronic tickets, electronic menus, or other sites where information displays are needed. Mass production of the new e-paper is seen as 4 to 6 years away.²²⁹ In 2012, a research team at the university reported development of an easy and inexpensive method to construct optical thin films.²³⁰

JAPAN

Japan’s longstanding prowess in consumer electronics, microelectronics, and advanced materials should seemingly make it a leader in the emerging field of flexible electronics. However, Japan’s large electronics groups are reeling from the competitive challenge from Korea. The country’s relatively low level of inward foreign direct investment, although increasing, is a handicap in any technology-intensive industry characterized by global patterns of innovation.²³¹ In a field in which startups such as Plastic Electronics, Heliatek, and Cambrios are playing a major role in defining the competitive landscape, Japan’s business culture continues to inhibit startups, notwithstanding government promotional measures.²³² In a widely quoted comment in 2013, Tetsuya Ohashi, Public Relations Manager of Tera Motors, a Japanese startup that makes the world’s first smartphone connected e-scooter stated:

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²²⁹ “New Technology Makes E-Paper Animation Displays Possible,” Central News Agency, January 4, 2011.

²³⁰ “National Taiwan University Develops Stacked Nanoparticle Layers,” Flexible Substrate, January 2013.

²³¹ Japan’s inward FDI was less than 4 percent of its GDP at the end of 2011, compared with 48.8 percent for the UK. The OECD’s index of regulatory restrictions on FDI, which includes limits on foreign equity holdings, screening, and approval procedures, and rules on repatriating capital and hiring foreigners, indicated that Japan was the OECD’s most closed economy in 2012. “Little Sign That Abe Can Shake Up Japan’s Inbound FDI,” Reuters, May 20, 2013. Japan’s leaders have been seeking to change this dynamic for many years. In a 2003 speech to the Diet, Prime Minister Junihiro Koizumi said, “Foreign direct investment in Japan will bring new technology and innovative management methods, and will also lead to greater employment opportunities. Rather than seeing foreign investment as a threat, we will take measures to present Japan as an attractive destination for foreign firms in the aim of doubling the cumulative amount of investment in five years.” Prime Minister’s office, “General Policy Speech by Prime Minister Junichiro Koizumi to the 156th Session of the Diet,” January 31, 2003.

²³² Nato Kan, who in 2009 was serving as Japan’s Deputy Prime Minister and Minister of State for Science and Technology Policy, commented in that year that “unfortunately we do not yet have an environment in Japan that is suitable for venture companies.” “Entrepreneurs Lack Serious Support,” Japan Times, November 27, 2009. See generally National Research Council, S&T Strategies of Six Countries: Implications for the United States (Washington, DC: The National Academies Press, 2010), 46–58.

Exceptions exist to the foregoing generalizations, some of which are noted in this study, and Japanese policy measures have improved the climate for innovation, but caution by some Japanese businesses inhibits the country’s ability to assert leadership in this field.²³⁴

In general, Japanese firms’ perspective on flexible electronics appears to be one of caution. In late 2013 the consultancy IDTechEx reported on “an intense study of printed electronics in Japan,” including 45 recently completed visits to companies and institutions in the country. IDTechEx reported, “We have not found significant success with printed transistor, photovoltaics or other printed components or circuits although printed and conductive patterns are popular in Japan.” No firm appeared to be selling printed transistor circuits. There was “little interest in printed electronics on paper in Japan and this is misguided.” Company focus was “exclusively on high volume potential applications because the inevitably huge companies involved want nothing less. . . . Flexible OLEDs are now a particular focus.” Many companies are moving into printed electronics but “they rightly perceive that the biggest profits will be in materials not the final devices when it comes to displays. . . .” The Japanese reportedly “do not share the enthusiasm for graphene seen in the West.”²³⁵

In Japan, the challenges and opportunities presented by flexible electronics are overshadowed by the existential crisis of the country’s once-vibrant electronics industry. An examination of the underlying causes of the startling collapse of the once-mighty Japanese electronics giants is beyond the scope of this study, but observers offer explanations that include the strong yen, conservative management, failure to grasp the implication of digital technology and the Internet, slow decision making, reluctance to withdraw from declining product areas that were once a major source of profits, and excessively broad product portfolios.²³⁶ The Japanese government has responded to the deepening industrial decline by forming a large investment fund, the Innovation Network Corporation of Japan (INCJ), which has invested in troubled companies and facilitated the consolidation of money-losing business units of Japanese electronics firms. (See Figure 6-5.)

At the end of 2011, Sony, Toshiba, and Hitachi concluded an agreement to spin off and merge their LCD units in a new entity, Japan Display Corporation, which is 70 percent owned by the government Innovation Network Corporation of

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²³³ “Hey Japan, What’s With Your Startup Culture,” Fastcolabs, September 6, 2013.

²³⁴ “Start-up Spirit Emerges in Japan,” The New York Times, December 25, 2013.

²³⁵ IDTechEx, “Intense Study of Printed Electronics in Japan,” September 16, 2013.

²³⁶ “The Taiwanese make 14 decisions in one phone call. ‘Yes, we will deliver.’ The Japanese just can’t do that.” Ta-Lin Hsu, founder of private equity firm H&Q Asia Pacific, in “Japan’s Once Mighty Tech Industry Has Fallen Far Behind Silicon Valley,” San Jose Mercury News, October 12, 2012.

FIGURE 6-5 Innovation Network Corporation of Japan.
SOURCE: Japan Ministry of Finance.

Japan. Sony, Hitachi, and Toshiba will each hold 10 percent stakes in the new entity.²³⁷ The new company “must tackle South Korea’s Samsung Electronics Co., which has extensive resources to invest in new technology as well as other Asian rivals that offer less expensive, if generic, products.” Hiroshi Hayase, an analyst at the research firm display Search, commented in 2012 that “if Japan Display fails, the country’s whole electronics industry will be left with few alternatives.”²³⁸

Japan Display’s initial moves indicate that while its main business will remain conventional LCDs over the near term, it will be engaged in technology areas relevant to potential flexible electronics applications. In 2012, Japan Display indicated it had developed prototype video e-paper that it indicated would be ready soon for production.²³⁹ In 2013, the company indicated it “had developed a high pixel density 5.2 inch OLED display with full high-definition display resolution of 1,080 horizontal pixels × 1,920 vertical pixels.”²⁴⁰ In 2012, Japan Display joined Osaka University’s OLED project, the Center for Organic Photonics and Electronics Research.²⁴¹

A collaboration between Sony and Panasonic initiated in 2012 to develop OLED TVs using printing-based product technologies fell apart at the end of

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²³⁷ “Sony, Toshiba, Hitachi, Unload LCD Units to Japan Government-Backed Fund,” Bloomberg, August 31, 2011.

²³⁸ “Japan Takes a Gamble on Displays,” The Wall Street Journal, April 10, 2012.

²³⁹ “Japan Display Develops Video-Rate E-Page,” Plastic Electronics, November 6, 2012.

²⁴⁰ “Development of 5.2-Inch full-HD OLED Display,” Printed Electronics World, May 27, 2013.

²⁴¹ “Japan Display Joins Kyushu University’s OLED Project,” OLED.si, August 1, 2012.

TABLE 6-10 Japanese Supply Chain Firms—Foreign Alliances

2013.²⁴² The companies “were unable to make the panels durable enough nor to cut production costs.” A likely additional consideration cited by observers was the fact that LG and Samsung’s recently introduced 55-inch OLED TVs with “initial price tags of $10,000 that kept sales low and business in the red.”²⁴³

The travails of Japan’s electronics majors tend to mask the solid and steady technological and commercial achievements of less well-known Japanese makers of materials, equipment, and printing technologies relevant to flexible and printed electronics. Although few if any of these firms can match the Sonys and Hitachis in sheer size and global reach, most of them are large entities with extensive industrial competencies and intellectual property portfolios, and some, such as Seiko-Epson in the area of piezo-crystal-based inkjet printers, are true technological pioneers. Moreover, Japan’s materials, equipment, and printing companies are defying the national stereotype for insularity by forging technology and commercial alliances with major foreign firms. (See Table 6-10.)

Government Entities Supporting R&D

Ministry of the Economy Trade and Industry (METI)

METI was created in 2001 when its institutional predecessor, the storied Ministry of International Trade and Industry (MITI), was merged with the then Economic Planning Agency and other economic agencies. METI is responsible for industrial, energy, and trade policy. Its promotional activities in the field of flexible electronics are generally carried out through subordinate organizations,

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²⁴² “Sony, Panasonic OLED Link is Official,” Advanced Television, June 26, 2012.

²⁴³ “Technical Difficulties Foil Sony-Panasonic OLED Effort,” Flexible Substrate, January 2014.

TABLE 6-11 Distribution of NEDO Support for Flexible Electronics Research

the National Institute of Advanced Industrial Science and Technology (AIST) and the New Energy and Industrial Technology Development Organization (NEDO).

New Energy and Industrial Technology Development Organization (NEDO)

NEDO is an incorporated government agency under METI’s supervision. Its mission is to develop new energy and energy conservation technologies, verify technical results, and promote the dissemination of new technologies with an eye to their commercialization. NEDO coordinates research activities in the academic, industrial, and governmental sectors and arranges and promotes R&D projects.

NEDO’s support for research with flexible electronics applications has been scattered among a range of R&D fields.²⁴⁴ (See Table 6-11.)

A British Parliamentary Committee observed in 2009,

The reference was to a Japanese government effort launched for the 2008-2013 timeframe involving Japanese electronics firms in an effort to develop a 40-inch OLED display sometime after 2015 in an effort to “get the jump on South Korean TV heavyweights such as Samsung Electronics Co. and LG Display Co.”²⁴⁶

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²⁴⁴ Kaoru Hunjo, NEDO Executive Director, “Government-Industry R&D Partnerships . . . Japanese Experiences . . . Introduction of NEDO.” (January 2006).

²⁴⁵ House of Commons, Innovation, Universities, Science and Skills Committee, Engineering: Turning Ideas into Reality, vol., March 18, 2009, 45.

²⁴⁶ “Japan Backs OLED Display Research” CBC News, July 10, 2008.

National Institute of Advanced Industrial Science and Technology (AIST)

AIST, a government “independent administrative institution,” is Japan’s largest research organization.²⁴⁷ It operates under METI’s supervision and derives most of its funding from the government. It has more than 40 autonomous research units and roughly 2,400 resources, of which about 80 are foreign. A number of its research units are involved in R&D efforts involving flexible electronics:

• Flexible Electronics Research Center. This unit was established in April 2011 to pursue “green innovation with thin, light, flexible devices.” Its Director is Toshohide Kamata, a professor at Tsukuba University with a research background in printed electronics and organic electronics and displays. He is currently supervising research programs to develop flexible printed devices for displays, tags, and sensors. The Center currently has five research teams pursuing flexible electronics themes including one team headed by Professor Kamata himself. (See Table 6-12.) In 2014 it was disclosed that the Flexible Electronics Research Center had developed software for rapid, easy, and precise simulation of ink droplets printed on substrates with surfaces patterned with wettability, a tool that is expected to substantially accelerate the development of printed electronics manufacturing.²⁴⁸
• Photonics Research Institute (PRI) PRI conducts R&D on advanced information technology and telecommunications themes, including flexible displays and printed organic devices.
• Nanotube Research Center In 2008, AIST established its Nanotube Research Center, a follow-on to the Nano Carbon Research Center (2001-2007). The Nanotube Research Center was headed by Sumio Ijima, who discovered carbon nanotubes. The Center is pursuing R&D into the synthesis of carbon nanotubes “with an emphasis on applications technology for the commercialization of CNT (carbon nanotubes).”²⁴⁹
• Carbon nanotube plant In February 2011, AIST disclosed that it had established the world’s largest production plant for single-walled carbon nanotubes, conductive materials that are being used in fabricating

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²⁴⁷ Independent Administrative Institutions (IAI) are governed by Japan’s Basic Law on Reforming Government Ministries (1998). The designation of IAIs was part of a broader scheme to separate government organizations into planning and operational units. Planning functions remained in government ministries while operating functions were transferred to IAIs, which tend to utilize private sector–type management methods and to operate in relative autonomy.

²⁴⁸ “AIST Develops Droplet Simulation Technology for Printed Electronics,” Flexible Substrate, March 2014.

²⁴⁹ “AIST Nanotube Research Center Fabricates and Develops Ultrafine Processing Technology for CNT Wafer; One Step Closer to Mass Production and Practical Application of MEMS Devices,” Tokyo Semiconductor FDP World, January 5, 2009.

TABLE 6-12 Research Teams at the AIST Flexible Electronics Research Center

SOURCE: National Insitute for Advanced Industrial Science and Technology of Japan <http://unit.aist.go.jp/flec/en/teams/index.html>.

• flexible and stretchable electronic devices.²⁵⁰ In 2004, AIST developed a “super growth” technology for the synthesis of large quantities of single-walled carbon nanotubes at an ultrahigh purity of 99.9 percent, reducing production costs to one-thousandth of the previous cost. Output capacity of the new facility is 600 grams per day. The facility was created pursuant to a collaboration with Zeon Corporation, a Japanese maker of specialty chemicals.²⁵¹

• Ultra Flexible Display Component Project Beginning in 2006, AIST and the Japan Chemical Innovation Institute (JCII) pursued developments in array technology based on printing methods together with inks for TFTs. This project was part of NEDO’s Technological Development of Superflexible Display Components program (2006-2009). This effort

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²⁵⁰ “Japanese Build World’s Biggest Carbon Nanotube Plant,” Jiji, February 14, 2011.

²⁵¹ The research team succeeded in fabricating a 100 ppi organic thin-film transistor array on a 15 cm square plastic substrate using a printing method in which all materials were converted into inks and no vacuum processes were necessary. The team also successfully used microcontact printing to print gate electrodes, S-Delectrodes, and silver nanoparticles for wiring. The team achieved narrow line widths that sufficiently maintained conductivity at a thickness of 600 nm. AIST, “Development of an Inexpensive Method for Mass Synthesis of Single-Walled Carbon Nanotubes,” February 7, 2007.

• was led by Kiyoshi Yase, Deputy Director of AIST’s Photonics Research Institute, and Hirobomi Ushijima, Leader of the Bio-Photonics Group of the Photonics Research Institute.
  
  AIST characterized the results as “a major step toward commercially viable processes for producing flexible displays and organic devices by large area high-speed printing methods such as roll-to-roll printing.”²⁵²

• Flexible solar submodules. AIST’s Research Center for Photovoltaics has developed flexible solar submodules with the world’s highest photovoltaic energy conversion efficiency among thin-film solar cells using CIGS thin film.²⁵³ The research was conducted pursuant to a contract with NEDO as part of the latter’s Research and Development of High Performance Technologies on CIGS Solar Cells project (FY2006-2009). The flexible solar cells can be applied to various types of substrate materials. AIST indicated that “we will drive forward the research and development toward their applicability of larger-area substrates as well as the realization of lower-cost and higher performance integrated type flexible solar cell modules and industrialization through collaboration with companies.”²⁵⁴
• TFT OTFT backplanes. AIST exhibited at Nano Tech 2010 a number of flexible organic thin-film transistor (OTFT) backplanes that had been developed jointly with JCII, Toppan Printing Co. Ltd., DIC Corp., and the Konica Minolta Technology Centre Inc. One OTFT backplane had a resolution of 1,600 × 1,200 pixels and was believed to be the world’s largest OTFT sheet manufactured using printing technology.²⁵⁵

Ministry of Education, Culture, Sports, Science and Technology (MEXT)

MEXT, also known as Monkashō, is a Ministry that arose out of the former Ministry of Education. It is one of two entities administering the Grants-in-Aid for Scientific Research program, which provides for grants to projects organized by individual researchers or research institutes engaged in basic research, particularly critical fields.

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²⁵² Kiyoshi Yase, “Organic Transistor Frontline, Joint Research Between AIST and the Japan Chemical Innovation Institute, Technology for Fabrication of Organic TFT Arrays Using Full Printing Method, Step Closer to Realization of Printable Fabrication,” Tokyo Semiconductor FDP World, December 2, 2008.

²⁵³ “Flexible CIGS Solar Cell Submodule Achieves Record Energy Conversion of 15.9%,” Nanowerk, April 5, 2010.

²⁵⁴ CIGS is an acronym for copper indium gallium selenide, compound semiconductor material that is used as light absorber material in thin-film solar cells.

²⁵⁵ “AIST Develops Large Area (A4) OTFT Backplane,” OSA Direct Newsletter, February 22, 2010.

Japan Society for the Promotion of Science (JSPS)

JSPS, originally a nonprofit foundation for promoting scientific research, is now a government “independent administrative institution.” Virtually all of its operating budget is derived from the Japanese government. Together with MEXT it is one of two government institutions administering the Grants-in-Aid for Scientific Research to support university R&D.²⁵⁶

Other Research Organizations

Japan Chemical Innovation Institute (JCII)

JCII is a nonprofit research organization promoting cooperative R&D in chemistry involving government, industry, and academia. Beginning in 2006, JCII collaborated with AIST in the development of technology permitting the printing of thin-film transistors on flexible polymeric substrates.

E-printing Standards Development Group

In November 2010, it was disclosed that about 100 companies in Japan would collaborate with the University of Tokyo and the University of Osaka to draw up an international evaluation standard for next-generation electronic printing technology, which prints electronic circuits as flexible materials. The purpose of the collaboration is to enable “Japan to take the lead in helping evaluate electronic printing technology in a fair manner.” Current valuation criteria differ between countries and between groups of researchers, “making fair evaluations difficult.” The collaboration was an outgrowth of a study group formed in May 2010 by Katsuaki Suganuma of Osaka University consisting of experts from industry, academia, and the government.²⁵⁷

University Research

University of Tokyo R&D projects

The University of Tokyo is highly regarded for its development research in the area of printed electronics. In 2008, University of Tokyo scientists revealed that they had devised a reliable method to inkjet print dots of 1 micron width onto flexible film, an achievement that was described in the Proceedings of the National Academy of Sciences. The new method will conserve the very expensive inks used in printed electronics and will improve the electronic properties

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²⁵⁶ “Droplet Simulation Technology for Printed Electronics,” Printed Electronics World, January 21, 2014.

²⁵⁷ “Japan Universities, Firms to Draw Up E-Printing Standard,” Jiji, November 8, 2010.

of printed electronic devices by reducing key dimensions such as the channel length of transistors.²⁵⁸

Single-Walled Carbon Nanotubes

Since 2005, a research team at the University of Tokyo under the direction of Associate Professor Tokao Someya has been developing highly elastic conductive rubber using single-walled carbon nanotubes emphasizing creation of large area stretchable and bendable integrated circuits, large area sensors, and large area activators. The team is using inkjet printers at room temperature to deposit organic semiconductors using carbon nanotubes as conductive dopants on a rubber substrate. When the rubber is stretched, the nanotube-based conductive network is deformed, but remains conductive. The group is working to develop carbon nanotube–based stretchable wires and fully printed stretchable integrated circuits.²⁵⁹ The research is being supported by funding from the Grants-in-Aid for Scientific Research administered by the Ministry of Education, Culture, Sports, Science and Technology.²⁶⁰ A potential application of nanotube-based stretchable electronics includes the development of “electronic skin” for humanoid robots (sensitive to touch, temperature, sound and light). Someya indicates that “e-skin” could enable the creation of robots that could help senior citizens and disabled people and play with babies.²⁶¹

Collaborative Institute for Nano Quantum Information (Nano Quine)

In 2006, the University of Tokyo established the Collaborative Institute for Nano Quantum Information (Nano Quine), an institution to foster industry-academic cooperation in nanoelectronics, quantum-encrypted communications, and quantum computers. Nano Quine has formed partnerships with other academic institutes in Japan and overseas and with Japanese companies.²⁶² (See Table 6-13.)

Nano Quine promotes “T-style partnerships between academics and industry, with the base of the T representing the research themes that are jointly set by groups from universities and companies.” One of the research themes selected through this process is the application of organic transistors to advanced flexible electronics and optoelectronics. Nano Quine reports that its

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²⁵⁸ “Much Finer Detail Possible with Inkjet in Japan,” Printed Electronics World, March 28, 2008.

²⁵⁹ “Horizontally Aligned Growth of Carbon Nanotubes Holds New Possibilities for Integration; Fusion with Silicon LSI Anticipated,” Tokyo Semiconductor FPD World, January 5, 2009; Interview with Tokao Someya in Discovery News, February 5, 2010.

²⁶⁰ “Methods to Horizontally Align Single-Walled Carbon Nanotubes on Amorphous Substrate,” Journal of Novel Carbon Resource Sciences, September 2010.

²⁶¹ Interview with Tokao Someya, Discovery News, February 5, 2010.

²⁶² “University of Tokyo Forms Industry-Academic Cooperation Group,” Tokyo Semiconductor FDP World, July 31, 2007.

TABLE 6-13 Nano Quine Academic and Corporate Partners

research group “Next Generation Flexible Electronic Devices” has successfully developed an extensible active matrix integrating carbon nanotube extensible conductors and organic transistors. The same group has also demonstrated low-voltage operating organic CMOS circuits on flexible substrates.²⁶³ Nano Quine’s R&D activities are supported by the Special Coordination Funds for Science and Technology administered by the Ministry of Education, Culture, Sports, Science and Technology.

Kumamoto University

Kumamoto University in Kyushu is conducting research with Fuji Electric Systems to develop technology to fabricate solar cells on flexible substrates. Existing solar cell technology is based on crystallized silicon cells placed between rigid glass substrates. Fuji Electric is reportedly manufacturing an amorphous (noncrystalline) solar cell, FWAVE, a thin, flexible, black sheet covered with small holes encased in a transparent plastic film. It bends easily and can be fitted to domes and other curved or irregular surfaces. The Kumamoto prefectural government is reportedly establishing a $9.8 million center to support the development and production of thin-film solar cells.²⁶⁴

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²⁶³ Nano Quine, Nano Quine: Quantum Information Electronics, <http://www.nanoquine.iis.u-tokyo.as.jp/NQ/brochure.pdf>.

²⁶⁴ “National Kyushu Taking the Lead in Thin Film Solar Cells,” Asahi Shimbun, November 13, 2010.

Nagoya University

In 2013, in a new study researchers at Nagoya University reported development of integrated circuits composed entirely of carbon-based materials that can be molded into various shapes like plastic. The discovery may enable the easy integration of electronic circuits to a wide variety of plastic products.²⁶⁵

Kyushu University

Researchers at Kyushu University report discovery of a new molecule that increases the efficiency of florescent OLEDs without use of heavy metals.²⁶⁶ In 2013, Kyushu researchers announced development of a new technique for making germanium crystals at low temperatures, making more feasible the use of germanium in thin-film transistors required for flexible electronics.²⁶⁷

Companies

In addition to the major Japanese producers of displays, Japan has a broad array of companies developing and producing materials, equipment, and process technology with flexible electronics applications.

Semiconductor Energy Laboratory Co. Ltd.

Semiconductor Energy Laboratory Co. Ltd. (SEL) is a research company founded and majority owned by Dr. Shunpei Yamazaki, who is widely acknowledged as one of the most prolific inventors in history. SEL develops patentable technologies without engaging in manufacturing or sales.²⁶⁸ SEL has an extensive technology portfolio in the area of thin-film transistor devices and manufacturing processes, much of which it licenses to Japanese makers of displays, and it has collaborated with DuPont in the development of technology integrating TFT and OLED.²⁶⁹ In 2013 SEL disclosed development of a flexible lithium-ion rechargeable battery that could be bent to a curvature radius of 40 mm 10,000 times without deterioration in its properties.²⁷⁰ SEL has reportedly developed a

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²⁶⁵ “Nagoya University Researchers Develop Plastic Products That Are Moldable All-Carbon Circuits,” Flexible Substrate, November 2013.

²⁶⁶ “Efficient OLED from Kyushu University Gets Rid of Heavy Metals,” Flexible Substrate, February 2013.

²⁶⁷ “Kyushu University Grows Thin Films of Germanium,” Flexible Substrate, October 2013.

²⁶⁸ “Message from the President” SEL—Creating Technology to Server Society,” <http://www.sel.co.jp/en/01_AboutSEL/1-2_FromthePresident.html>; “Shunpei Yamazaki Holds Almost 2000 Patents,” Wired, October 26, 2007.

²⁶⁹ IDTech Ex, Printed, Organic & Flexible Electronics (2011) op. cit., 272.

²⁷⁰ “SEL Shows a Flexible Rechargeable Li-Ion Battery Prototype,” Flexible Substrate, November 2013.

range of flexible OLED displays using c-Axis Aligned Cristal (CAAC) oxide semiconductors, a material that reportedly enables creation of larger and more reliable flexible displays.²⁷¹

Fuji Electric Systems

Fuji Electric Systems, a subsidiary of Japan’s Fuji Electric Group, is a producer of power semiconductors, solar cells, and electronic systems with applications in automobiles, industrial systems, and consumer electronics. The company has been pursuing R&D into amorphous silicon solar cells using plastic substrates since 1993, with the objective of developing a large surface area solar cell that is lightweight and bendable, in contrast to glass substrate solar cells. Fuji Electric began mass production of thin-film amorphous solar cells in 2007 and stated its intention to invest $320 million by 2011 to expand its production capacity for light, flexible solar cells by 12-fold.²⁷²

Toppan Printing

Toppan Printing is a “huge force in printing,”²⁷³ with 2011 sales exceeding $18 billion, and also produces semiconductor photomasks, smart cards, RFIDs, and materials for displays. Toppan has been developing large area electrophoretic display signage since 2004. In 2012 it entered into a collaboration with Plastic Logic of the UK to develop flexible, reflective digital signage more than 40 inches in size, a prototype of which was exhibited in 2013.²⁷⁴

Teijin Limited

Teijin is a Japanese pharmaceutical and chemical company that produces high-performance aramid and carbon fibers and polyester films and plastics. In February 2009, Teijin formed a technology development agreement with Silicon Valley-based Nano Gram Corporation to conduct R&D on the optimization of silicon nanoparticles and inks and to develop process technology to sinter silicon nanoparticle film at the relatively low temperature of 200°C. As a result of this research Teijin was able to sinter silicon nanoparticle film on a polycarbonate resin, and the technology is expected to have applications for flexible displays and

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²⁷¹ “SEL Develops Flexible OLED Displays with New Materials,” Flexible Substrate, March 2014.

²⁷² “Fuji Electric Systems Fully Utilizing Lightweight, Flexible Characteristics of Film Type Solar Cells to Expand Into Various Applications,” Tokyo Semiconductor FDP World, June 26, 2007; “Fuji Elect Systems to Lift Capacity for Bendable Solar Cells,” Asia Pulse, October 3, 2007.

²⁷³ “Toppan Printing, Plastic Logic Collaborate on OTFT-Based Large Area Flexible Display,” Printed Electronics Now, March 2013.

²⁷⁴ “Ibid.

printed semiconductors.²⁷⁵ In 2010, Teijin wholly acquired Nano Gram. Teijin has set a target of capturing 80 percent of the global market for silicon inks with semiconductor properties by 2017.²⁷⁶

In 2010, Teijin began manufacturing and selling two types of transparent conductive films for use in new versions of electronic paper:

• SS120 uses polycarbonate (PC) film as a substrate, is suited for electronic paper that uses liquid crystals, and is expected to have applications with respect to OLEDs.
• HP125 uses polyethylene teraphthalate (PET) film as a substrate and is suited for electronic paper that uses electrically charged particles.²⁷⁷

Showa Denko

Showa Denko is a major Japanese chemical engineering firm, with more than 180 subsidiaries. In 2013, it disclosed that it had developed printable silver nanowire ink with which highly stable, transparent conductive patterns on flexible films. The new ink is expected to replace indium tin oxide (ITO) conductive film for touch screen applications. The new ink is a hybrid made by combining a small amount of silver nanoparticles with copper nanoparticles, creating a hybrid ink that can be used as a low-cost alternative to conventional silver ink and paste. The new ink was jointly developed with Osaka University.²⁷⁸

DIC Corp

DIC Corp., until 2008 known as Dainippon Ink and Chemicals, is a manufacturer of printing inks, synthetic resins, and other chemicals including materials with electronics applications. DIC is the world’s largest manufacturer of ink. In June 2011, DIC disclosed that it had developed a weatherproof coating agent that can be used instead of glass in solar cells, permitting the fabrication of flexible solar cells that weigh half as much as glass versions.²⁷⁹

Taiyo Ink

Taiyo Ink is the world’s leading supplier of resist and conductive inks for printed circuit boards. The company has five R&D centers around the world and a U.S. subsidiary, Taiyo America, based in Nevada. Taiyo has developed conductive

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²⁷⁵ “Teijin’s World First Silicon-on-Plastic Integration Technology,” Printed Electronics World, November 28, 2009.

²⁷⁶ “Teijin Acquires Nano Gram Corporation,” Printed Electronics World, August 11, 2010.

²⁷⁷ “Teijin Chemicals Enters Electronic Paper Market,” Printed Electronics World, July 6, 2010.

²⁷⁸ “Showa Denko Develops Printable Silver Nanowire Ink,” Flexible Substrate, January 2013.

²⁷⁹ “Breakthrough for Flexible Solar Cells,” Smarthouse, June 23, 2011.

inks for printed electronics and solar applications on both flexible and rigid substrates. The company’s conductive inks consist of individual metals or metal blends (such as silver with copper) or with ceramic additives.²⁸⁰ Taiyo America is reportedly developing flexible dielectric materials that utilize either UV or low temperature curing for use on flexible substrates made of PET or PEN.²⁸¹

Dai Nippon Printing (DNP)

DNP is a major Japanese printing company that makes components and materials for electronic displays. DNP has been conducting research on OTFTs for application in printed e-paper displays.²⁸² DNP has also developed a high-function waterproof flexible film to protect components of organic electroluminescence devices and solar panels, a potentially attractive alternative to bulky and rigid glass panels. The advent of a thin, flexible, and highly effective film is expected to enable the introduction of smaller and lighter components for use in a new generation of ultrathin solar panels.²⁸³

In 2009, DNP disclosed that it had developed a transparent conductive film designed to replace ITO films in e-paper, touch panels, and OLED panels. DNP used silver for conductive particles formed into patterns through a printing process on flexible film.²⁸⁴

Soken Chemical and Engineering Co

Soken Chemical is a Japanese developer and producer of pressure-sensitive adhesives, fine particles (including toner, photographic materials, and LCD materials), specialty-coated products, as well as chemical production plants. In 2008, the company disclosed that in a research collaboration with the University of Tokyo it had developed a new type of display material for e-paper. The material consists of resin spheres made with two colors mixed with silicone rubber and shaped into a sheet that is injected with silicone oil to enable the spheres to rotate freely. “Patterns are generated by selectively applying voltage to make the spheres turn so that either one color or the other faces forward. When power is cut, the spheres remain in place and the pattern is retained. According to Soken

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²⁸⁰ “Printed Electronics at Taiyo,” Printed Electronics World, October 14, 2009.

²⁸¹ “Taiyo America Adopts Knowledge from PCB Market to Printed Electronics,” Printed Electronics Now, January 2014.

²⁸² “Printed Electronics Asia: Visits to Local Center of Excellence, Part 2,” Printed Electronics World, October 15, 2008.

²⁸³ DNP’s new protective film produces a completely dust-proof, hermetically sealed environment with moisture barrier properties 100,000 times superior to that of conventional films used in food packaging, making it one of the most waterproof membranes in the world. “Waterproof Film for Solar Panels,” Japan Market Information, July 25, 2009.

²⁸⁴ “DNP Produces Printed Transparent Conductive Film to Replace ITO,” Flexible Substrate, June 2009.

the spheres are cheaper to make than capsules typically used for e-paper, and permit manufacture of large sheets of e-paper because panel production involves simply stretching it over a substrate.”²⁸⁵

Konica Minolta Holdings Inc.

Konica Minolta is a Japanese manufacturer of imaging equipment, measuring instruments, optical devices, and printers. It announced in 2010 that it would undertake mass production of OLED lighting products applying its photographic film technology. The same year it entered into a strategic partnership with U.S.based Konarka Technologies Inc. to develop and manufacture organic thin-film photovoltaic cells and panels.²⁸⁶ In 2013 it reported successful demonstration of printed electronics technologies to achieve commercially viable OLEDs for general lighting applications.²⁸⁷

Seiko Epson Corporation

Japan’s Seiko Epson is one of the world’s largest manufacturers of computer printers and imaging equipment, and it also produces integrated circuits and LCD components. The company pioneered inkjet printing utilizing piezo crystals, a technique it has carried forward into printed electronics, and was one of the first to build industrial-scale, high-precision machines capable of printing electronic components.²⁸⁸ In 2009, Seiko Epson announced development of a “breakthrough technology that uses inkjet technology to uniformly deposit organic material for the production of OLED TVs in large screen sizes.²⁸⁹

Asahi Kasei Finechem

Asahi Kasei Finechem is a subsidiary of Japan’s Asahi Kasei Chemicals Corporation, a producer of petrochemicals, polymers, and performance chemicals. Asahi Kasei Finechem is developing organic materials for electronic and optical materials. In 2009, the company disclosed that it had developed polyvinyl sulphonic acid (PVS) for use as a dopant for conductive polymers achieving substantially higher conductivity, more than 100 times greater than an alternative

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²⁸⁵ “Japan’s Soken Chemical Develops New Display Material for E-Paper,” Asia Pulse, October 22, 2008.

²⁸⁶ “Konica Minolta and Konarka Join Forces to Develop Organic Thin Film Photovoltaics,” Nanowerk, March 4, 2010.

²⁸⁷ “Application of Printed Electronics Technologies to OLED Lighting,” Flexible Substrate, May 2013; “Recent Progress on High-Performance OLED Technologies for Lighting Applications,” Flexible Substrate, January 2014.

²⁸⁸ “Industry Leaders Discuss Growth and Future of PE,” Printed Electronics Now, June, 2010.

²⁸⁹ “Seiko Epson Announces OLED TV Breakthrough,” Flexible Substrate, June 2009.

method using polystyrene sulphonate (PSS) as dopant. The company plans to apply polymers produced by the PVS method on OLED devices and solar cells.²⁹⁰

International Collaboration

Nitto Denko/Singapore

Nitto Denko is a Japanese producer of LCDs, tapes, flexible circuits, semiconductors, insulation, vinyl, and reverse osmosis membranes for desalinization of water. In 2008, Nitto Denko established the Nitto Denko Asia Technical Centre (NAT) in Singapore’s Fusionopolis, a large multidisciplinary R&D hub. NAT is a collaboration between Nitto Denko and Singapore’s A*STAR Data Storage Institute (DSI), the A*STAR Institute of Materials Research and Engineering, and Nanyung Technologica University.²⁹¹ NAT was established to foster the development of organic electronics technologies for use in sensor products that are flexible and less expensive to produce than are inorganic conductors such as silicon or copper. The biosensors are expected to have applications such as early detection of diseases, electronic paper, and lightweight plastic solar cells.²⁹²

Kisco/Singapore

Kisco Ltd. is a Japanese producer of basic materials for the electronics, automobile, housing, and pharmaceutical industries. In 2011, Tera-Barrier Films, a portfolio company of Exploit Technologies Pte. Ltd., the commercialization arm of Singapore’s Agency for Science, Technology and Research, invested an undisclosed amount in Kisco and became Kisco’s exclusive distributor for Asia Pacific.²⁹³ The funds provided to Kisco by Tera-Barrier will enable the company to continue its efforts to commercialize its proprietary moisture-resistant films for applications in flexible displays and organic solar cells. Tera-Barrier has also developed technology for flexible optoelectronics products, flexible solar cells, and disposable or wraparound displays.²⁹⁴

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²⁹⁰ “Asahi Entrances Polymer Conductivity by 100 Times,” Flexible Substrate.

²⁹¹ A*STAR is a government agency promoting scientific research and education.

²⁹² Singapore’s Economic Development Board (EDB) has identified organic or plastic electronics as key elements in the country’s strategy to promote new activities in high technology. NAT will be able to draw on biomedical expertise at the A*STAR research institutes in the nearby Biopolis, as well as using nearby hospitals to field test its innovations. “Nitto Denko Invests $10 Million to Pioneer Organic Electronic Device Research in Singapore,” JCN Network, November 30, 2008.

²⁹³ Applied Ventures LLC, the venture capital arm of Applied Materials, Inc., also has significant holdings in Tera-Barrier. Tera-Barrier was originally a spinoff of A*STAR, Singapore’s agency promoting scientific research.

²⁹⁴ “Tera-Barrier Investment & Exclusive Distribution Agreement with Kisco,” Printed Electronics World, January 26, 2011.

SDK/NovaCentrix

In April 2011, Japan’s Showa Denko KK (SDK) and U.S.-based NovaCentrix agreed to collaborate in the field of printed electronics. Pursuant to a licensing agreement SDK will manufacture and sell conductive inks developed by NovaCentrix, and SDK and NovaCentrix will jointly develop conductive inks to be used with NovaCentrix’s Photonic Curing process technology, a proprietary manufacturing process involving high-speed sintering with visible-light flash lamps, which restricts the rise in temperature enabling the use of plastic substrates that can be produced in an R2R process. SDK will contribute its metal, inorganic, and organic materials technologies to the joint development of conductive inks. SDK’s consolidated subsidiary, Shoko Co., Ltd., will serve as sales agent for NovaCentrix in Japan.²⁹⁵

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²⁹⁵ “SDK and NovaCentrix to Cooperate in Printed Electronics,” JCN Network, April 11, 2011.