OLED encapsulation materials market to grow 16% CAGR by 2021, says IHS

digitimes | Posted: 24 Aug 2017, 11:26

The popularity of organic light-emitting diode (OLED) TVs and smartphones has boosted not only the oled display market but also the OLED encapsulation materials market. According to IHS Markit, the OLED encapsulation materials market is expected to grow 4.7% from a year ago to US$117 million in 2017.
 
"The market is forecast to grow even faster as Chinese and South Korean panel makers have aggressively invested in new OLED fabs, resulting in the increase in OLED shipments in terms of area," said Richard Son, senior analyst at IHS Markit.
 
The OLED encapsulation materials market is forecast to reach US$232.5 million by 2021, growing at a compound annual growth rate of 16% from 2017, IHS said.
 
Unlike thin-film transistor liquid crystal display (TFT-LCD), OLED displays require encapsulation as the organic elements are vulnerable to moisture. The OLED encapsulation materials can be categorized into metal, frit glass, thin-film encapsulation (TFE) and hybrid.
 
The metal type is expected to lead the market in terms of revenue because it is mainly used for OLED TVs whose growth is fastest. However, with China-based smartphone brands releasing a wide range of new products with OLED panels, demand for frit glass encapsulation materials, which are currently applied to smartphones with rigid-OLED displays, will remain steady, though losing its market share.
 
In terms of revenues, metal type encapsulation is expected to account for 50% and the frit glass type to take 43% in 2017, and 67% and 23% in 2021, respectively.
 
"Hybrid encapsulation, which combines TFE with a barrier film, has high production cost and its flexibility is limited, and thus demand for the hybrid type will not increase significantly," Son said. "However, the latecomers are focusing on the hybrid encapsulation as it has a lower technological entry barrier compared to TFE, allowing them to succeed in mass production faster than when using TFE."
 
From a mid- and long-term perspective, the hybrid encapsulation materials market will continue to grow for a while. TFE and the hybrid type are expected to take 6% and 1% of the encapsulation materials revenue market in 2017, respectively, but they will grow to reach 7% and 3.5% respectively in 2021.

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