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A NanoMarkets White Paper

Transparent Electronic Materials: An Emerging Market Opportunity

Published January2012 NanoMarkets, LC

NanoMarkets, LC PO Box 3840 Glen Allen, VA 23058 Tel: 804-270-1718 Web: www.nanomarkets.net

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Transparent Electronic Materials: An Emerging Market Opportunity The information for this paper was sourced from the recent NanoMarkets report, Transparent Electronics Markets-2012 that was released in December of 2011. Page | 1 As we enter 2012, NanoMarkets believes that three major industry sectorsdisplays, solar panels and the windows industrywill soon require novel transparent electronics materials. These new materials sets will embrace conductors, semiconductors and dielectrics and NanoMarkets believes that all this will provide an important new opportunity for both established specialty chemical firms and start-ups. In a recently released report, Transparent Electronics Markets-2012,NanoMarketsprojected that revenues from transparent electronic materials are expected to reach $325 million in 2015, going on to reach $1.1 billion in 2019 (See Exhibit I). In addition, some of the materials development that NanoMarkets expects to be undertaken with transparent electronics in mind will generate additional revenues outside of the transparent electronics sector. We are thinking here especially of oxide thin-film transistors (TFTs) for use in both OLED and LCD backplanes for distinctly non-transparent displays. But some of the work on developing transparent conductors may have implications in the ITO replacement market as well. Three Crises: A Transparent Solution In the three industry sectors mention in the first paragraph of this paper management is coping with strategic crises that have become only more serious in todays slow growth economy. In each case, transparent materials may prove a key to dealing effectively with those issues. Crisis #1Transparent displays and the end of the LCD revolution: Not only has the world economic downturn hurt television and computer sales, but we are also in the last gasp of the liquid crystal display (LCD) revolution. All computer and mobile displays and almost all televisions are LCD now. So the display industry is looking for those next big things to keep its revenues growing. And it is coming to realize that transparent displays (along with flexible displays, OLED displays and e-paper) may be one of those things. Transparent displays using relatively crude CRT and electroluminescent (EL) technology have been used for signage and heads-up displays (HUDs) for years, but Samsung and LG are now
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promising to upgrade the technology for transparent digital signage in the near future. In addition, there is the promise of mass market transparent displays as part of a move towards augmented reality features on tablets and smart phones. This product trend has the backing of both Microsoft and Apple, which we think is reason enough that it should be taken seriously. Page | 2 One of the next iterations of the iPhone and iPad are likely going to have a transparent display that enables you to receive additional information about the place you are standing in on a transparent screen, while looking at the place through the screen. Crisis #2Windows, transparency and the construction bust:The windows industry, whose main addressable market traditionally is the new construction market, is not a good place to be these days! In some countries, construction growth is tepid; in others the worst is yet to come. Window manufacturers are therefore rethinking product/market strategies. Inevitably, they need to come up with new products that have (1) high value-added, which helps make up for lost revenues, and/or (2) a value proposition focused on energy efficiency; in the light of rising energy prices and environmental concerns this is a likely to be an important selling factor. For the windows industry the use of transparent materials needs no explaining. It is implicit in the whole idea of windows. But increasing value added means a whole new set of window functionalities. Self-dimming windows have been available for some time and the windows industry is now looking at windows that are also displays (for unobtrusive large-screen TVs), windows that are also lighting, and windows that are also solar panels. There may be even more complex hybrids in the future. One could, for example, imagine a panel that was a window and a solar collector during the day and a light at night. Commercial developments like this imply the need for higher performance transparent electronics materials capable of monolith integration of the functionalities mentioned above into windows. Self-dimming windows, in particular, have not done well in the marketplace, mainly because they have never achieved the performance capable of attracting many customers. New transparent materials could expand the addressable market for these innovations in the window space. Crisis #3Solar panels: After a spectacular 2010, the solar industry has slowed. NanoMarkets believes that the worst is yet to come in that we expect to see solar subsidies decline significantly as governments around the world reduce these subsidies as part of budget cutting efforts.
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The result? The solar panel industry will be desperately seeking ways to improve its economics. One way that it might do this is through building-integrated PV (BIPV). BIPV is a product design strategy that integrates PV panels with other building materials. By doing so, the shared cost of the substrate can significantly reduce the total cost compared with buying the roofing or siding Page | 3 plus the PV panel separately. Not all BIPV products are transparent, but BIPV glass in skylights, facades, curtain walls, and shade structures such as canopies already exist, although they are deployed mainly in highvisibility commercial buildings. In addition, what transparent BIPV mostly means today is standard crystalline silicon solar panels glazed into larger modules with some areas left open to enable light to come through. As such, transparent BIPV today is not really a materials play. But we would expect it to be much more about materials going forward; with the ultimate goal being the development of PV absorber layers that are inherentlytransparent. And while NanoMarkets does not believe that transparent BIPV is the killer app that organic PV (OPV) has long sought, this is one niche were OPV would appear to have an inherent competitive advantage. One final point on transparent PV absorber materials. While in the case of the other sectors that we have reviewed in this article, transparent really means transparent, in the PV sector it means something less than that. The point here is that no material can be both completely absorbent and transparent; so there is always a tradeoff. A general transparency target for commercial BIPV glass is around 50 percent. This lets in most of the current thin-film PV materials, which, if made thin enough, can be at least considered translucent. In addition, since novel transparent materials for PV absorbers do not have to be that transparent, the bar is lowered a little in terms of product development. Transparent Conductors for Transparent Electronics: A New Direction for the ITO Alternatives Firms? There is already considerable work being done on developing new transparent conductors, but most of this is aimed at coming up with alternatives to the indium tin oxide (ITO) that is used almost ubiquitously in the display industryand in some cases in the solar panel industryas a transparent conductor. ITO is expensive, sometimes brittle but highly entrenched in the display industry as a top and bottom electrode material for LCDs.

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Various materials have been used or proposed as substitutes for ITO including other transparent conducting oxides, conductive polymers and a variety of nanomaterials; especially inks made with silver nanowires and carbon nanotubes. The big issue faced by all the firms in this sector, however, is that the big LCD makers are reluctant to shift to an ITO alternative because of the Page | 4 large investment that they have made in ITO. Given this, many of the manufacturers of ITO alternatives have found that the touch-screen sensor market is easier to break into than the mainstream LCD market. Touch-screen sensors may be a good place to start, but they will never generate enough revenues for manufacturers of transparent conductors to build substantial businesses on. However, the rise of a vibrant transparent electronics business means that there is potentially a new sector where transparent conductors can be sold. And, what is more important in the context of this report is that transparent conductors are the one area of transparent electronics materials that arereadily available and mature technologically. And the firm to watch in this sector, we believe, is Cambrios. This is not so much because of its nanosilver-based transparent conducting material, but because of the fact that it has so effectively managed its business development and supply chain strategies to become the first firm to get a high-performance transparent conducting nanomaterial into a real-world product; the touch-sensor for a smart phone, that is available on the market today. It is also worth mentioning that this sector is one in which not just start-ups, but much bigger firms see opportunity. Thus Dow Chemical, Kodak, Linde, Saint-Gobain and Sumitomo have all already staked a claim in the transparent conducting nanomaterials space. Transparent Semiconductors of the Future The emerging markets that we described at the beginning of this article are obviously going to need more than just transparent conducting materials and as in any materials set, the materials that are central to creating value in future transparent material sets are the semiconductors. And it has not proved especially easy to find materials that can serve as semiconductors and at the same time be transparent. NanoMarkets believes that there are three types of research efforts that can leador are leadingto practical transparent semiconductors. These are (1) organic electronics, (2) efforts to develop electronics using nanomaterials or nanostructures of some kind and (3) metallic oxide semiconductors:

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We note that as a practical matter most of the work in this field is focused on using (3); semiconductor materials based on metal oxides of various kinds. Although the semiconducting transparent oxide class of materials, as yet, lacks truly useful p-type semiconductors, functioning devices have been built using n-type oxide semiconductors. Indeed, there can be little doubt that the whole area of transparent electronics received Page | 5 a considerable boost in credibility in the early 2000s from a number of research devices (TFTs) that were built using (mostly) ZnO as a semiconductor. Nanomaterials appear to offer considerable potential for creating transparent TFTs at some time in the future, but few researchers are focusing on this right now. But it should, perhaps, be mentioned that ZnO nanowires have been used in transparent conductor research devices from time to time. Organic electronics is a research program that often makes use of transparent materials (PEDOT is a notable example), but it hasnt focused on transparency as a goal, but rather on a complete electronics paradigm built around organic materials.

The most promising TCO material in terms of performance out of the common ones that are proposed for transparent electronics appears to be indium oxide; it offers the highest electron mobility, for example. In addition, we should note that there have been some successes in developing transparent p-type semiconductors. A recent text on this topic described as excellent the transparency characteristics of AlCuO2, SrCu2O2:K, LaCuOS:Sr, CuInO2:Ca and CuScO2:Mg, among other materials. However, we note that in this case, Excellent is defined as greater than 70 percent. A Conclusion and a Few More Companies to Watch In Exhibit II we set out how we see the transparent electronics space evolving and we note here that the optically active materials that will be used in smart windows and solar panels will also evolve in sophistication and performance. In addition, while we have focused in this article on the crucial conductors and semiconductors, there will be other materials needed to complete the transparent materials set. For example, the fabrication of transparent TFTs is going to require settling on a gate dielectric material; this choice will significantly impact the performance of the devices under consideration. And a number of materials have been proposed or used for gate dielectric materials including SiO, Al0, HfO, ZrO, and YO.
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And with the exception of the transparent conductor space, it is still too early to pick real winners and losers in the transparent electronics materials space. Indeed, NanoMarkets predicts that we will soon begin to see some new firms begin to appear in this space to capitalize on the opportunities that we have identified here. This is not to say that some of the big boys wont also play a significant role. For an overview of what NanoMarkets considers the Page | 6 top firms to watch in the transparent electronics space see the somewhat speculative Exhibit III. The main criterion for being on this list is the likely level of influence that these firms will have on the transparent electronic materials sector across a wide variety of applications; they are not necessarily materials firms themselves. One large company to watch in this space is 3M, which has a broad patent portfolio covering transparent conducting oxides and is a recognized leader in this field. Another interesting company is Kurt J. Lesker, which has reported to us in the past that its materials group has been able to identify 17 novel transparent conducting oxide that it believes have potential to eventually make a commercial impact. It is out of this kind of work that the new transparent materials set that we are predicting will be forged.

Exhibit I: Forecast of Selected Transparent Electronics Materials by Type ($ Million)

2012 Oxide electronics materials for transparent displays Active materials for smart windows Absorber layer materials for transparent solar panels Transparent sensor materials TOTAL NanoMarkets 2012 12.8 15.0 77.2 0.2 105.0 2015 55.7 42.8 226.6 0.5 325.5 2019 205.9 121.3 784.7 2.0 1,113.8

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Exhibit II A Provisional Roadmap for Transparent Electronics Materials

Current state of technology

Growing rapidly in importance. Emphasis on OLED TFT backplanes Doesnt really exist, but some work done in this area when OTFTs were being seriously considered Nanomaterials and nanostructures have been used to build transparent electronic devices in scattered experiments. Nanomaterials are also eating into the conductive transparent coating market

Next three years

Broad range of commercial devices, especially if p-type semiconductors can be developed

Future evolution

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Future unclear, alternative paradigms may arise

Oxide electronics

Transparent organic electronics

The rise of transparent electronics may give a motivation for reviving this research program Nanomaterials would seem to have the largest potential to emerge as the underpinning for electronics that is both highly transparent and offers high performance electronic capabilities

Transparent nanoelectronics

Possible that a consistent effort to develop a transparent nanoelectronics could develop.

NanoMarkets 2012

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Exhibit III NanoMarkets Top Seven Firms to Watch in Transparent Electronics Materials
Influence on the market What to watch for in the future
Prime mover in transparent electronics. Offering the first Will Samsungs next-generation transparent electronics displays and other products. Has products take off and will the materials this company a history of trying out new uses become the industry standard? materials faster than other display firms Apple could be the first firm to provide a sophisticated consumer product with a transparent display in it. As such it could be a strong influencer on the type of materials used in transparent electronics products. As an indication of what could happen, consider that Apple single-handedly turned Pro Cap touch-screen technology into a major industry. Saint-Gobain has not specifically identified transparent electronics as a target market, but seems to be creeping into this space and is well positioned for further growth in the future. Not yet a supplier of materials to the transparent electronics business, but its materials could have some interesting applications in transparent electronics and this may still be an easier sector to get into than the mainstream display sector In a position to be a major supplier of materials to a future transparent electronics sector. But would probably be a low-key one. As the leading display glass firm, likely to emerge as a key supplier of substrates for transparent electronics. Could perhaps offer specialty glass for this sector This work has considerable relevance to the future of transparent electronics and may make Lesker a player in the future

Page | 8

1. Samsung

2. Apple

Has patents for transparent displays to provide access to augmented reality. Seems likely to add this to iPad and iPhone

3. Saint-Gobain

Major glass firm with influence in smart windows and transparent conductors

4. Cambrios

The first transparent conductive nanomaterial firm to announce a real-world customer. Has extensive portfolio of transparent conductive oxides and films Not specifically active yet Carrying out R&D work on a number of novel transparent conducting oxide materials

5. 3M

6. Corning

7. Kurt J. Lesker NanoMarkets 2012

For additional information about the NanoMarkets report, Transparent Electronics Markets2012 please follow the hyperlink in the report title. You may also contact us at (804) 270-1718 or sales@nanomarkets.net.

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