Low Costs from Older Materials
Nanomaterials: Is this the End of ITO?
Bendy is Trendy
The Final Score
Among the many problems that the display industry has experienced with ITO, the most serious is surely cost. The display industry has done well in the past decade as flat-panel displays (FPDs) have all but replaced CRTs and have penetrated markets in which displays were never found before. This growth has occurred in large part because of declining displays prices. For growth to continue in the display industry, a downward price curve for displays will still be needed.
Unfortunately, this is not completely consistent with likely price trends in the ITO business. ITO is an expensive material due to its containing indium; indium has been priced at $350 to $1,000 for the last several years. While the recession may have delayed the need to address the cost issue, it has not eliminated the problem. Once economic growth returns, ITO prices will rise again. While NanoMarkets thinks indium prices will never attain the levels prophesied in some of the more hysterical pre-recession forecasts, one famous one suggested indium could reach $10,000 per kilo, but it wouldn't be unreasonable to see them quadruple.
But even this more modest price rise could put a lot of pressure on the margins of FPD makers. With prices of displays coming down by (say) 10 percent per year and indium quadrupling in price, the percentage of ITO in the bill of materials (BOM) for a display could reach double digits. This would not be good news for FPD makers who have never generated huge profits in the first place.
NanoMarkets sees only three ways to alleviate this problem. More Indium can be produced, causing supply of indium to go up and prices of ITO to drop. Or, ways can be found to use less ITO, causing demand for ITO to go down and prices of ITO to drop. Finally, the industry could find lower cost materials to replace ITO. All of these alternatives are being adopted now to some extent. All of them have issues.
Producing more indium in effect means that zinc firms will extract more indium as part of their process. This strategy is attractive to some companies in the zinc industry, but by becoming involved in the indium business they are taking on considerable business risk; indium's only significant use is for making ITO and (as we have seen) the price of indium changes a lot.
Using less ITO could mean either reclaiming ITO used in old TVs and monitors or reclaiming ITO wasted in the sputtering process. Or it could mean replacing sputtering with an improved deposition method. But while reclaiming waste is always a good idea, somehow it never produces the returns that its advocates expect. And new forms of deposition are easier discussed than implemented. For example, solution processing beats sputtering hands down in terms of material use efficiency, but it can be a tricky process to deploy and often leads to relatively low performance from the materials being deposited.
There has been a lot of discussion about finding a low-cost alternative to ITO. The three classes of materials that are candidates for such an alternative are other transparent conducting oxides (TCOs), conductive polymers and nanomaterials.
Alternative TCOs and polymers have a lot in common, although not chemically, of course. They are technologically mature, very low cost materials, and they are used wherever possible as an ITO substitute. The problem is that, as a practical matter, these materials can seldom offer the performance in terms of transparency and/or conductivity that ITO can offer. Alternative TCOs are used instead of ITO in some kinds of commercial photovoltaics, but in the display industry TCOs are not widely used. They have been used in some touch-screen sensing systems as have conductive polymers, but no one seems to believe that there is much likelihood of ITO being swept aside by new and improved TCOs or conductive polymers in the near future.
TCOs and conductive polymers that have been suggested as ITO alternatives are fairly established materials and are relatively inexpensive because they are produced in large quantities and have been for many years. But this is also (paradoxically) why we should not expect these materials to eclipse ITO; these ITO alternatives are just too well understood for a real breakthrough. It is true that the grades of TCOs and polymers that are used for displays are better than most and further improvements are likely, but these will be only incremental improvements. TCOs and polymers have a niche role to play, where cost is paramount over performance.
NanoMarkets is not so rash as to predict the end of ITO anytime soon. But we think that if this ever happens it will come as the result of an ITO alternative based on nanomaterials either based on carbon nanotubes or some nanoparticulate preparation.
The key point to understand here is that while TCOs and polymers are at a late stage of evolution of both their cost and innovation curves, nanomaterials replacements for ITO are at the early stage. As these materials change from being materials that are being supplied in small volumes for lab use and sampling, orders of magnitude declines in price are likely. In addition, the basic materials from which the nanomaterials are created may be less subject to the price fluctuations associates with indium; this is obviously the case with carbon nanotubes, for example.
Also, while the older ITO alternatives are never likely to provide the performance of ITO in terms of transparency and conductivity, nanomaterials certainly have the potential to do so. In fact, the whole point about nanomaterials (in any market) is that they can achieve high performance. In the case of nanoparticulate materials this is because the high surface-area-to-volume ratio makes them more "reactive;" in this case, more conductive. In the case of nanostructures, it is because a similar effect can be achieved through their geometry.
The nanomaterials vs. ITO game can--in theory anyway--be played in two ways. Suppose at some time in the future, some firm has developed a high-performance, relatively low-cost nano-substitute for ITO. One option would be to sell it as better, because of its higher conductivity, than ITO. (And one should remember here that ITO isn't especially conductive; it's used because of its currently unique balance of conductivity and transparency.) Another option would be to use lower concentrations of nanomaterials, perhaps matching the conductivity of ITO, but with very high transparency and at a lower cost than ITO.
Yet another advantage that nanomaterials could bring to the table in a future battle with ITO is the relative ease with which they could be adapted to roll-to-roll (R2R) processing. At least this seems to be the case with carbon nanotubes, which can easily be dispersed in water and coated, making them favorable for ink and printing processes. In addition, R2R processing implies the use of a flexible substrate, something that carbon nanotube preparations are well suited for because of their very high mechanical flexibility. By contrast, ITO cracks fairly easily when bent a lot.
All this should be attractive for display firms, which are finding batch processes based on very large substrates have growing diseconomies of scale. Helping to replace the older ways of manufacturing displays with lower cost processes is therefore yet another way that nanomaterial replacements for ITO could help lower costs.
However, some skepticism is in order here. First, R2R manufacturing of displays is a long way from being perfected and in any case, for the limited requirements of an R2R process, a thin coat of ITO may perform quite well. Intrinsically flexible displays, ones the user can bend back and forth, would be a challenge to ITO, but despite much talk such flexible displays still look to be some way off. Perhaps nanomaterials will help them arrive in the marketplace.
For the time being, the clearest example of ITO's mechanical limitations is to be found in analog resistive touch screens. The sensor subsystem used in such touch screens contains two transparent conductor layers, typically using ITO. With each touch, the top layer bends to contact the bottom conductive layer, thus registering a touch. When ITO is subjected to this repeated bending, it tends to degrade and crack, rendering the touch screen inoperable or at the very least insensitive to touch. For precisely this reason, analog resistive touch screens have been a major target for firms developing alternatives to ITO. (Note: Analog resistive touch screens have the largest share of the touch-screen market, but other touch technologies, such as the projected capacitive technology used in iPhones, do not have the same potential for ITO substitution as analog resistive screens.)
Finally, we also think that nanomaterial-based alternatives to ITO may have some applicability in the emerging area of OLED displays (and in OLED lighting too). OLED displays are being touted as having very high visual quality and this goes hand-in-hand with brightness uniformity. ITO is challenged in providing this for large OLED displays. For such large panels, ITO's fairly high resistivity is a problem--the voltage drop can create a brightness gradient over large areas. And while thin-film coatings of ITO tend to be smoother than some of the other choices, these coatings still have significant spikes rising tens of nanometers from the surface. These spikes can cause electrical shorts between the layers of a device. The ITO material can also interact with some active layer materials, causing them to degrade prematurely and shortening the device life. This surface roughness of the ITO layer can be addressed through post processing, though, of course, this adds cost. By contrast to all of this, nanomaterials can be deposited with both bulk and micro uniformity. And they may solve the resistivity issue as well.
Admittedly, much of the above is speculative, although hopefully intelligently so. NanoMarkets believes that nanomaterials are getting closer to becoming a viable alternative ITO. Non-existent in the transparent conductor market in 2009, we believe that nanomaterials will make inroads starting in 2013.
At present, several firms and research institutes are developing such materials. Unidym, for example, is creating carbon nanotube films for ITO replacements, and already has joint development agreements with Touch Panel Laboratories and LG Display to develop these films for touch screens. Cambrios Technologies Corporation, on the other hand, offers an ITO alternative consisting of metal nanowires dispersed in solvent, which it markets under the trade name ClearOhm. Meanwhile, nanoparticle networks are being developed at Argonne National Laboratory and a silver nanoflake material within a conductive polymer binder is being developed by Sigma Technologies.
So far none of these efforts has resulted in a product that can knock ITO out of consideration for major applications, but as we have shown the potential is there. If an investor is looking to bet against ITO, it is in nanomaterials that he or she should be placing his or her money.
Source: A Nanomaterial-Based Rival to ITO Just Over the Horizon
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