ITO replacements: time to take-off or fizzle out
Sep 10, 2014 Raghu Das
Over the past five years there have been a large number of companies developing transparent conductive film (TCF) alternatives for indium tin oxide (ITO). Including material providers and film providers, research and events firm IDTechEx has profiled almost 100 organizations working across more than 12 types of transparent conductive film technologies, covered in the report Transparent Conductive Films (TCF) 2014-2024.
ITO alternatives that have gained most traction so far include silver nanowires and metal mesh options, with early stage leaders so far being Fujifilm and O-Film.
Uptake in 2014 has been disappointing
While TCFs can and have been targeted to many applications, most suppliers are focussing on large area touch screens, which are a growing, near term market where the incumbent solution of ITO has problems meeting the required conductivity for best performance over large area. This is therefore not just about competing on cost, but more viably addressing a technical issue where the existing technology falls short.
Many companies that IDTechEx has interviewed have had their materials/films tested and assessed for use in touch screens. However, so far, many companies we have interviewed have found the uptake of ITO alternatives as disappointing. This is not due necessarily to their technology, but rather issues within the supply chain. The main challenges in 2014 are discussed below:
- Due to smart phones and tablets being relatively saturated and with the launch of Windows 8 which supports touch screens, consumer electronics companies expected that touch screen laptops would take off quickly. Therefore many touch screen providers invested large amounts of money in capacity to make touch screens for laptops. However, these have not taken off as quickly as they had hoped. Indeed, IDTechEx is aware that in 2014 some touch screen makers have been running at as low as half of capacity on new lines. As a result, many of these companies are dragging their feet when it comes to investing in another TCF platform until they have better utilization of existing capex expenditure.
- Secondly, touch panel makers themselves are under pressure, as their customers may turn out to be competitors. Display companies, usually suffering from low margins due to intense competition in the LCD display industry brought on by the surge in LCD capacity from China, recognize that a large part of value is captured by touch panel makers. Therefore, increasingly display makers seek to make their own touch modules. For example, LG make their own touch screen modules. Additionally, there is an increasing trend/interest towards touch screens integrated with LCD displays. This may result in a reducing number of touch screen panel makers.
- Finally, big players that provide ITO on PET have been slashing prices recently, such as Nitto Denko, which increases the barrier to adoption for alternatives - at least for a while.
As a result, 2014 has not been a good year so far for companies launching an ITO TCF alternative. For example, IDTechEx is aware of one company that had in 2013 expected sales of their TCF film to be $100 million in 2014, which was then reduced to a few million dollars by summer. Many smaller companies have seen interest but no significant orders being placed. That is not to say that these companies will not see traction - the hardships in 2014 are being tackled as under-utilized capacity is slowly being filled more as the supply chain adjusts to demand.
The offshoot of this is that increasingly TCF providers seek to differentiate - otherwise the many technology options with increasingly similar performance start to only compete on price. In particular, these differentiation interests include the ability for the film to be stretched or conformed across surfaces - whether thermo-formed or injection molded, or folded around edges of devices. Others are exploring other markets, such as transparent antenna systems.
This IDTechEx research, along with detailed assessment and market forecasts of TCF technologies by device type, in addition to detailed company profiles and benchmarking, are part of the IDTechEx reports and subscription services. For more information, see the IDTechEx report Transparent Conductive Films 2014-2024 www.IDTechEx.com/tcf which contains detailed analysis on this specific topic or contact us at research@IDTechEx.com to gain access to this and other research on emerging technologies as part of our subscription service (http://www.idtechex.com/research/portal.asp).
IDTechEx guides your strategic business decisions through its Research and Events services, helping you profit from emerging technologies. We provide independent research, business intelligence and advice to companies across the value chain providing data sought by business leaders, strategists and emerging technology scouts to aid their business decisions. For more information see www.IDTechEx.com .
Top image: OptiLan