The Flexible Electronics Opportunity (2014) / Chapter Skim
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4 The Emerging Competitive Landscape
4 The Emerging Competitive Landscape
Pages 71-96
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From page 71... ...
Although countries located in each zone enjoy significant competitive strengths, no region is clearly poised to dominate the new industry. In 2011, Germany's National Academy of Science and Engineering published a study of Germany's global competitive position in organic electronics.
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From page 72... ...
"Samsung Delays its Flexible Displays," PhoneArena.com, April 17, 2013; "Samsung Delays Flexible OLED Displays," Plastic Electronics, October 2, 2012. Problems associated with manufacturing yields reportedly induced LG and Samsung to delay introduction of 55-inch organic light-emitting diode (OLED)
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From page 73... ...
and European firms to enter commercial production of consumer displays, with the exception of proprietary niche technologies. The 2011 study by the German National Academy of Science and Engineering drew a picture of a global market for organic electronics in which Asian firms were acquiring a virtually insurmountable leadership position in OLED displays.
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From page 74... ...
AMOLED displays
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From page 75... ...
to increase its output of OLED screens, of which 300 billion won ($268 million) would be allocated to flexible displays.
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From page 76... ...
to be the biggest beneficiary of the commercialization of flexible display."13 In January 2014, LG unveiled the world's first flexible OLED TV, with a screen with degrees of curvature that can be modified by viewers using the TV remote.14 The other potential challenge facing Samsung in flexible displays comes from China, where an extraordinary national effort to establish a presence in conventional rigid displays has enabled domestic producers to capture about 20 percent of the global market.15 Chinese LCD makers, powerfully backed by ocal gov l ernments, are currently working to invest in the production of small AMOLED displays, aiming at the smartphone market where indigenous makers represent a 11 "Samsung to Invest $1.8 Billion on OLED," Korea Times, November 14, 2012. 12 HSBC Global Research, Flexible Display: Fantastic Plastic -- A Shape-Shifting Game Changer, April 2013, 22.
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From page 77... ...
The ascendancy of South Korean chaebol firms in displays has been paral leled by the veritable implosion of the Japanese electronics giants that once dominated global markets for semiconductor memories, televisions, and displays. The Japanese electronics majors are seen as having failed to adjust to the digital revolution.20 In the fiscal year ended March 2012, Japan's eight largest elec tronics firms suffered a combined net loss of more than $20 billion, roughly the equivalent of the gross domestic product of Paraguay.21 These firms, engaged in massive facilities downsizing and workforce reductions, were characterized by The Wall Street Journal in 2012 as "dinosaurs stumbling around after the asteroid hit."22 The Japanese government has intervened with a $2 billion bail out, consolidating the displays operations of Sony, Toshiba, and Hitachi in a new entity, Japan Display Corporation, which is majority-owned by the government.
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From page 78... ...
Sony indicated, however, that "there were some challenges inherent in the manufacture of large OLED displays." Accordingly, the company was attempting to fabricate larger displays using oxide semiconductor TFTs and incorporating Sony's "Super Top Emission" technology, which "has a high aperture ratio and enables light to be extracted efficiently from the structure's OLED layer." While the combination of these two technologies enabled the development of a promising prototype, the two firms were apparently unable to develop cost-efficient production processes. The low sales achieved by LG and Samsung with respect to the rollout of 55-inch OLED TVs in 2013 were also cited as a possible factor underlying the Sony/Panasonic decision.
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From page 79... ...
Unlike the Koreans, they will not hit you from behind.26 The rapid emergence of a display industry in China is a final wild card in the emerging Asian competition in flexible displays. In the past decade numerous Chinese electronics firms, usually strongly backed by local governments, entered the LCD industry, placing strong downward price pressure on established Asian producers.27 A number of these firms, most notably BOE Technology, are undertaking multi-billion-dollar investments in the production of flexible AMOLED displays, challenging Korean dominance in this technology.28 North Asia, said that "we found that key component supply can be used as a competitive weapon." "HTC Learns Lesson from Samsung Display Row," Central News Agency, May 28, 2013.
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From page 80... ...
Although Asian firms are likely to dominate the manufacture of flexible displays, at least initially, they are dependent on U.S. and European firms for key materials.
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From page 81... ...
or European initiative to contest the consumer flexible display market.
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From page 82... ...
34 However, beginning in 2011, global demand for photovoltaic modules -- whether conventional silicon-based or organic -- declined substantially, reflecting decisions by some European countries to reduce subsidies for solar power 32 "Army-Backed Flexible Display Effort: A Symbol of Public-Private Partnership," IEEE Computer Society, July-September 2006.
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From page 83... ...
"As a result, some companies are looking to sell below cost to gain market share, and ride at the losses as other companies go out of business." "Solar Market Continues to Evolve," Printed Electronics Now, July 2012. 36 "Sun Burn 2: Global Changes Slow Solar Growth," Toledo Free Press, July 26, 2012; "China's Photovoltaic Industry: Exporting on the Cheap," Energy Tribune, September 3, 2009; "Cloudy Skies Remain for Taiwan's PV Industry," Taiwan Economic News, November 30, 2012; "PV Armageddon: The Rapid Market Swings Concealed Major Efficiency Gains," Printed Circuit Design & Fab, April 2012.
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From page 84... ...
Army Research Laboratory to accelerate the development of flexible displays in the United States, entered into a strategic research partnership with AU Optronics Corporation, the largest manufacturer of thin-film transistor LCDs in Taiwan. Another FDC strategic research partner, U.S.-based E Ink, was acquired by Prime View International, a Taiwanese company that is the largest manufacturer of electronic paper in the world.
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From page 85... ...
Company Technology Asian Partner Country Nova Centrix Nanoparticle inks Showa Denko Japan Applied Nanotech Copper ink for thin-film substrates Ishihara Chemical Japan Plextronics Photovoltaic panels Korea Parts & Fasteners Korea Konarka Thin-film photovoltaic panels Konica Minolta Japan Ascent Solar CIGs modules on flexible film Municipal Government of China Suqian SOURCES: "Nanomaterials Firms Turn to Asia for Commercial Opportunities," Plastic Electronics, April 15, 2011; "Konica Minolta and Konarka Join Forces to Develop Organic Thin Film Photovoltaics," Nanowerk, March 4, 2010. contribute $1.6 million, its technology, and "certain equipment from its Colorado facility."46 Companies based in Korea, Taiwan, and Japan have obtained important flexible electronics technologies through acquisition of, or significant equity investment in, U.S.
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From page 86... ...
In early 2013, as Schott Solar experienced increasing economic distress, Fraunhofer ISE purchased Schott's portfolio of 111 patent families "covering the entire value chain of silicon photovoltaics, from crystallization to system installation" for an undisclosed 49 The CEO of NanoGram, a U.S.-based developer of nanomaterials design technology, com mented on the 2010 acquisition of his company by Japan's Teijin Limited, a chemicals manufacturer, that "our nanoparticle manufacturing technology, and the materials we have developed using the technology, have proven to have superior functionality in a variety of applications for solar, flexible displays and printed semiconductor applications. What NanoGram needs to take those materials to market is application expertise and the ability to scale quickly.
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From page 87... ...
Ijima commented that Japanese electronics companies are "lagging behind their South Korean rivals." He has approached Japanese state-run research funding bodies but found their response was slow: Even if research funds are provided in the next fiscal year's budget, it would take a year and a half for the project to get underway. That is about the time frame in which Samsung could come out with a new product.57 In August 2013, Ijima delivered the opening address at the Nanocarbon Application Forum in Osaka, ruefully showing his audience the world's first smartphone with a touchscreen made of carbon nanotubes, made not in Japan but in China, exemplifying the "loss of Japan's leading edge regarding nanotube research." 58 Asian firms are now developing proprietary technologies in the field of flexible electronics that are potentially of interest to companies in North America and Europe.
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From page 88... ...
US e-paper displays Acquisition 215 2012 E Ink Taiwan SiPix US e-paper 31.58% equity 50 2010 Teijin Japan Nano Gram Corp US Inks, silicon nanoparticles, Acquisition NA process technology 2011 Hanwha Chemical Korea XG Sciences US Graphenes 19% equity 3 2011 POSCO Korea XG Sciences US Graphenes 20% equity NA 2009 LG Korea Kodak OLED business US OLED Acquisition 2007 Sumitomo Chemical Japan Cambridge Display UK Polymer OLED Acquisition 285 Technology SOURCES: "Samsung to Buy Germany's Novaled," The Wall Street Journal, August 9, 2013; "Prime View International Acquires E-Ink for $215 Million," ZDNet, June 1, 2009; "E-Ink to Acquire Shares of SiPix, SiPix Imaging," Telecompaper Asia and Africa, August 9, 2012; "Nanostart-Held Nano Gram to be Fully Acquired by Major Japanese Corporation," Nanotechnology Now, August 9, 2010; "S. Korea's Hanwha Chemical Buys Into U.S.
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From page 89... ...
However, the development of SWOT analyses in flexible electronics has usually engaged academic and industry leaders and other experts in the field in intensive strategic assessments of the emerging global competitive landscape. These analyses thus represent the informed "conventional wisdom" of individuals with deep knowledge of the subject.
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From page 90... ...
. The leadership position of Germany in printing technology and the printing machines industry should benefit successful eco nomic implementation or organic electronics.63 The Commission's SWOT analysis saw as a significant European weakness the fact that neither "giant" European companies nor startups were entering the market, raising the risk that "external companies will benefit from the research and investment done in Europe." Similarly, the OPERA analysis observed that while Europe was strong in materials, equipment, and device design, "when it comes to manufacturing, the picture is less rosy.
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From page 91... ...
Facilities for prototyping and pilot-scale manufacturing existed at umerous research centers.68 n 66 acatech,Organic Electronics in Germany, 23. 67 WTEC Panel Report, European Research and Development in Hybrid Flexible Electronics, July 2010, 7.
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From page 92... ...
n the competition for the leadership position in organic electronics, Asia holds a decisive advantage: the local OEM like Samsung, LG or Sony rules the consumer electronics industry. Asia also holds a global market share of nearly 60 percent on the level of contracted work [contract manufacturing]
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From page 93... ...
it was troubling that few of the groups the panel visited actually considered the United States as a threat in any sense, reserving that for Asian countries, particularly Korea and Japan, and organizations and companies based in these countries.71 In 2010, NorTec, a highly regarded public economic and innovation development organization based in Ohio, conducted a SWOT analysis in connection with the creation of a strategic roadmap for a flexible electronics innovation cluster in northeast Ohio, FlexMatters. Although the SWOT was concerned with the particular cluster, not the United States as a whole, the findings are arguably applicable to a considerable degree to an assessment of the American competitive position.
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From page 94... ...
The NorTech assessment noted the existence of a strong local university research base and innovative large and small companies capable of capitalizing on the opportunities offered by flexible electronics, but struggling with workforce issues and worried about competition from Asia and uncertainties with respect to regulation and availability of funding. Consistent with this assessment, the WTEC team that surveyed European flexible electronics laboratories in 2010 summed up the challenge facing the United States in this field as follows: What the panel discerned from this study is that the relatively low prevalence of actual manufacturing and advanced systems research and development in the United States has led to an incomplete hybrid flexible electronics R&D sce nario for this country: it is strong in basic research and in innovation but weak in advanced development for manufacturing, mirroring trends in some other sectors as well.
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From page 95... ...
THE EMERGING COMPETITIVE LANDSCAPE 95 TABLE 4-12 NorTech SWOT Analysis -- Northeast Ohio Flexible Electronics Cluster Strengths Weaknesses Academia Academia • Fundamental discoveries • New business methodologies • Relevant technologies -- materials, devices, • Promotion of technical leadership design Big Companies • Ability to secure funding • Workforce issues • Patents and know-how • Talent pipeline from universities • Talent • Market intelligence Big Companies Small Companies • Innovation methodology • Funding • Product portfolios • Patent infringement • IP • Technology intelligence • System development/design layout • Partnering and teaming opportunities • Global footprint • Market intelligence • Large customers, robust sales channels Small Companies • Innovative products • Manufacturing competency • IP strategy Opportunities Threats Academia Academia • New technologies • Loss of first mover advantage • Industry alliances, hub of cluster • Sustainability of funding long term Big Companies Big Companies • New products/systems • Global competition • New manufacturing strategy • Aggressive Asian patent filing • Product line extensions • Funding uncertainty Small Companies • Disruptive technology introduction • New product components/devices • New legislation/standards • New processes (R2R) Small Companies • Novel manufacturing platforms • Asian dominance of low-cost manufacturing • Lack of funding • Technology shift/loss of customers • Extinction SOURCE: NorTech, FlexMatters Strategic Roadmap, November 2010.
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