Tag Archives: Novaled

Novaled Going Public with Clear Near-Term Value, but Long-Term Challenges Remain

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Novaled (Client registration required) has filed with the U.S. Security and Exchange Commission (SEC) for its proposed initial public offering (IPO). The company is a developer of dopant and transport materials for organic light-emitting diode (OLED) displays and lighting. (For more on these markets see the reports “Sorting Hype From Reality in Printed, Organic, and Flexible Display Technologies” and “Finding the End of the Tunnel for OLED Lighting.” (Client registration required)

Novaled seeks to raise $200 million in its IPO, which will be listed on the New York Stock Exchange (NYSE) or NASDAQ. The company’s financial records, which it released with its filings, indicate revenues of €6.8 million and €17.4 million in 2010 and 2011 respectively, reaching profitability in 2011. This development primarily derives from its materials, produced by BASF, being incorporated into commercial Samsung Mobile Display (SMD) smartphone displays. SMD accounted for 59% of its 2011 revenue.

The application in SMD smartphones also indicates that Novaled has a validated product for improving OLED performance through power efficiency and lifetime enhancement.

Smartphones will be the dominant application for OLED displays through 2017 (see the report “Cutting Up the LCD Pie: Calculating the Billion-Dollar Slices from Display Innovation” (Client registration required). With this application market the power savings of the material is most important to extend battery life, while the short lifecycles of smartphones minimizes the impact of lifetime enhancement.

However, while 75% of Novaled’s revenue came from Korean firms, much of its remaining revenue came from Europe – indicating that it’s not doing much work with Japanese, Taiwanese, and Chinese OLED display developers such as AUO and Sony. These players will inevitably begin to take OLED display market share from SMD and LG Display.

In addition, Novaled’s work in Europe indicates that it believes that OLED lighting remains a viable market, as it claims in the SEC filing that the OLED lighting market will be at least $3.5 billion in 2018. By contrast, we project a $58 million 2020 market for OLED lighting (Client registration required). Novaled is well poised now for near-term growth through its supply of SMD and LG Display, but faces a rockier future if it continues to rest its hopes on significant revenue from OLED lighting and static OLED display market shares.

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Lux Innovation Grid Highlights Viable Partners for Display Developers

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There’s been no shortage of investment in printed, flexible, and organic electronics aimed at driving next-generation displays, organic photovoltaics (OPV), transparent conductive films (TCFs), smart packaging, and thin-film batteries. Yet, challenged by the inherent technical hurdles and long development cycles, few firms have turned their potential into big cash returns. Those that eventually succeed will do so by building partnerships today that pool expertise in materials, equipment and device development.

This week’s graphic expressly focuses on display developers, and applies the Lux Innovation Grid to compare how potential partners compare in Technical Value and Business Execution. The field encompasses more mature technologies, like small molecule organic light-emitting diode (OLED) and electrophoretic displays, in addition to emerging technologies, including electrochromic and electrofluidic displays.

A glance at companies comprising the Dominant Quadrant clearly illustrates that OLED materials and equipment have a clear headstart over more emergent technologies like electrochromic and electrofluidic displays. OLED displays have found success thus far primarily in mobile displays, but development of larger displays like televisions is underway. Notable players include materials developers like Universal Display Corporation (UDC) and Novaled, in addition to equipment makers like Kateeva. These companies also comprise the majority of the “Positive” takes on the chart due to the strength of OLED technologies in general and the solutions that these companies can provide.

E Ink stands out for its Technical Value and Business Execution. The former derives from its high score in technology and intellectual property, the latter from its strong partnerships and management team. In addition, E Ink scores the only “Strong Positive” on our chart. This lofty position should not come as a surprise, since E Ink has a nearly 100% market share of the electrophoretic market, which is commonly found in e-readers like the Amazon Kindle.

Emerging reflective and flexible technologies are High-potential. Particularly for OLEDs, the transition to flexible displays requires new materials and substrates to protect the OLEDs from atmospheric contamination. New materials such as flexible glass from Corning Display or barrier films for plastic substrates from Tera-Barrier can enable flexible OLEDs.

Emerging reflective displays, like electrofluidic displays from Gamma Dynamics and cholesteric liquid crystal displays (LCDs) from Kent Displays, also fall into the High Potential category. Competing with electrophoretics will not be easy for the reflective technology developers, as both companies score above 3 on Technical Value, but below 3 on Business Execution – due to low scores on barriers to growth and revenue per employee.

Source: Lux Research report “Finding the Winning and Losing Companies in Printed, Flexible, and Organic Electronics.”

 

 

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