New Opportunities for Optical Films in the Display Industry

Monday 17 September 2012, Amsterdam

The LCD market heavily dominates the optical coatings and films needs of the display industry. LCDs and their backlight units use diffuser films, polarizers and reflective polarizers, contrast enhancement and prismatic films, as well as antireflection, antiglare, and privacy films. But most display makers are now looking for the “next big thing” in displays. This next big thing could come in the form of 3D devices, OLEDs for mobile computing applications, and perhaps even OLED TVs in the near-term; e-paper has also grown in importance over the last few years.

Although most of the revenues from optical coatings and films used in the display industry for years to come will be generated by those used in LCDs, This report indicates that the opportunities in this space will be shaped by the emergence of the new kinds of displays outlined above. These new kinds of displays can be expected to create new kinds of optical films, and may create openings for new firms to establish a market presence and gain market share versus the competition.

Nonetheless, such changes could also create a problem for firms supplying optically functional display films that have long relied on a well-established LCD sector for sales. Both OLEDs and e-paper displays are backlight-free, and they thus require fewer optical film products than conventional LCDs.

Optical Films and Coatings for the LCD Industry: Multi-Functional Films and New Functionality

Optical films in an LCD include films in both the backlighting unit (BLU) and on the front surface of the display. BLU films include a reflector, a diffuser, one or more prism films, a rear polarizer, and sometimes a reflective polarizer). Front surface optically functional coatings or films include an antiglare/antireflective film and, sometimes, a privacy film (for personal mobile devices).

Over the next few years, we believe that LCDs will be locked in a battle with other kinds of displays for the visual quality that they offer. This report indicates that many of the films and coatings that are used in LCDs will prove potent weapons in this fight. In addition, we think that the optical coatings/films can be utilized to lower the costs and improve the profitability of display makers, which will only be more challenged as the newer kinds of displays gain market traction.

Improving visual quality: With regard to the visual quality challenge, we see improved anti-glare and ant-reflection films as being a key opportunity since both go a long way to improving the readability or viewability of an LCD, and both are especially important in high brightness and outdoor settings.

With so much of the display industry focused on the mobile display industry, analyses see films/coatings for reflectors as presenting another opportunity in the LCD sector in the near term, this is because they maximize brightness for the LCD at the lowest possible power consumption. Today, the simplest reflectors are made from metallic films, white paint, or a white pigment-filled film like 3M’s white diffuse reflector (WDR). However, we see a growing need for more sophisticated and higher reflectivity reflectors, which are typically fabricated with multilayers of alternating low and high RI polymers.

Combining functionalities and reducing costs: A growing trend that we also expect to see in the LCD films and coatings space is combination of functionalities. This may also lead to more marketable displays, but its most immediate impact is on reducing costs and thus – potentially at least – increasing profitability for the display makers.

The display industry has never been especially profitable and as new kinds of displays begin to come onto the market, LCDs will become even more margin challenged, since they will have to improve in performance along a number of dimensions to compete with the newer display types. This could involve expensive design and materials considerations and manufacturers of their LCD films and coatings are likely to be able to make money by tapping into this need.

One can see this trend in the latest diffuser films used in LCDs. In the past, most of these have been simple filled plastics, but we think that there will be growing use of more sophisticated, engineered films that both diffuse the film and enhance light transmission. A similar development in polarizers is 3M’s dual brightness enhancement film (DBEF), which is a reflective polarizer film that combines the technology of the 3M ESR film product with polarizing functionality. It is typically used in addition to the rear polarizer, and is placed directly before the rear polarizer after any other brightness enhancement films used in the system.