TOKYO -- Japanese companies including Mitsubishi Chemical and V Technology are stepping up development of OLED products, looking to secure a place in that expanding market as Apple eyes the parts for its smartphone displays.
Organic light-emitting diode screens consist of materials that produce light in response to electricity laid atop a circuit board. Mitsubishi Chemical, a unit of Mitsubishi Chemical Holdings, has grown its business to include those substances, developing a process to print liquefied materials atop circuit boards like ink on paper. Samples have been provided to display panel makers in Japan and abroad. The technology could enter commercial production as soon as 2017 at Mitsubishi Chemical's Fukuoka Prefecture factory, after production techniques are nailed down.
Materials costs for the printed products are around one-tenth of those for conventional OLEDs made with vapor-deposit techniques. Production costs are drastically lower as well.
Manufacturers had been racing to develop technology for printing different substances with the micron-level precision required in OLEDs. Mitsubishi Chemical won that round, adapting techniques used to make OLED lighting to paint thin, precise layers on narrow surfaces. This innovation could help speed the transition from current liquid crystal displays to OLED panels by opening the door to mass-produced printed components.
Japanese petrochemical company Idemitsu Kosan, a leading manufacturer of OLED materials, plans to grow capacity at its plant in Paju, South Korea, by 2.5 times. Sumitomo Chemical will spend around 20 billion yen ($178 million) to boost touch-panel production capacity around 40% by October.
The entry of manufacturers from China and elsewhere has made producing general-use materials for digital products intensely competitive. Japanese materials makers are thus strengthening operations in fields requiring high-grade technological prowess to keep up earnings.
Others are choosing to supply parts necessary for OLED production. V Technology has begun developing vapor deposition masks, used when affixing luminescent material to circuit boards under conventional methods, that it says allow for the production of higher-resolution displays than rivals' products. The manufacturer has teamed with a display panel maker to test the parts' performance. V Technology looks to break Dai Nippon Printing and Toppan Printing's virtual duopoly on the products.
Japanese companies also aim to catch up to South Korea's Samsung Display and LG Display in mass-producing OLED screens. The duo have the market mostly on lock. Panel maker Japan Display plans to grow research and development spending 3 billion yen, expanding an experimental OLED production line at its Ishikawa Prefecture factory to prepare for a start to mass production in 2018. Further investments will be made starting in fiscal 2016.
Apple, a leader in smartphone technology, has said it will include OLED display panels in some of the iPhones debuting in 2018. Sales to the American company account for around 40% of Japan Display's total. The panel maker currently produces only LCDs, opening it up to a major blow when Apple makes the switch. Becoming able to meet those needs as well is thus a matter of survival.
JOLED, a venture combining Panasonic and Sony's OLED panel operations, also aims for mass production in 2018. The company will spend around 20 billion yen to get a test production line up and running this spring. Sharp is conducting R&D aimed at mass production as well.
Though OLED technology has been used only in a limited number of devices so far, it is thought likely to take off going forward. Use in smartphones would help expand the market for the displays to $32.4 billion in 2020, or 3.7 times the 2014 level, U.S. survey firm IHI Technology says.