www.nanomarkets.

net

Markets for Transparent Conductors in Touch-Screen Sensors2012 Nano-429

Published November 2011 NanoMarkets, LC

NanoMarkets, LC PO Box 3840 Glen Allen, VA 23058 Tel: 804-270-4370 Web: www.nanomarkets.net

NanoMarkets, LC | PO Box 3840 | Glen Allen, VA 23058 | TEL: 804-270-4370 | FAX: 804-360-7259

www.nanomarkets.net

Entire contents copyright NanoMarkets, LC. The information contained in this report is based on the best information available to us, but accuracy and completeness cannot be guaranteed. NanoMarkets, LC and its author(s) shall not stand liable for possible errors of fact or judgment. The information in this report is for the exclusive use of representative purchasing companies and may be used only by personnel at the purchasing site per sales agreement terms. Reproduction in whole or in any part is prohibited, except with the express written permission of NanoMarkets, LC.

NanoMarkets, LC | PO Box 3840 | Glen Allen, VA 23058 | TEL: 804-270-4370 | FAX: 804-360-7259

www.nanomarkets.net

Table of Contents
Executive Summary ........................................................................................................ 1
E.1 Transparent Conductors in Touch: Markets May Not As Big Some People Think!................................................................................................................. 1
E.1.1 The Touch Market Explosion...................................................................................................................1 E.1.2 The Limits of Touch as a Market Driver for Transparent Conductors ...............................................1 E.1.3 Emerging Strategic Issues for Firms Selling Transparent Conductors into the Touch-Screen Sector ...................................................................................................................................................................3

Page | i

E.2 Current Strategies and Firms to Watch ........................................................... 3

E.2.1 E.2.2 E.2.3 E.2.4 Cambrios: Success in the Touch Market with Nanosilver ..................................................................4 3M ...............................................................................................................................................................5 Some Nanotube Ink Firms of Interest ...................................................................................................6 Other Silver-Based Transparent Conductor Firms ...............................................................................7

E.3 Opportunities for Transparent Conductors by Type of Touch Sensor ....... 9

E.3.1 Analog Resistive Opportunities ...............................................................................................................9 E.3.2 Projected Capacitive Opportunities ......................................................................................................10

E.4 Supply Chain Opportunities for Transparent Conductor Firms Serving the Touch Sector ........................................................................................................ 10 E.5 Summary of Eight-Year Forecasts of Transparent Conductors for Touch Sensors ......................................................................................................................... 11

Chapter One: Introduction .......................................................................................... 14

1.1 Background to this Report ................................................................................ 14
1.1.1 Touch-Sensor Markets for Transparent Conductors: The Real Story ............................................15 1.1.2 Transparent Conductors in Touch: Shifting Market Priorities and Supply Chains ........................16

1.2 Objective and Scope of this Report................................................................. 18 1.3 Methodology of this Report .............................................................................. 18 1.4 Plan of this Report .............................................................................................. 19

Chapter Two: Opportunities for Transparent Conductors in Touch-Screen Markets ............................................................................................................................ 20

NanoMarkets, LC | PO Box 3840 | Glen Allen, VA 23058 | TEL: 804-270-4370 | FAX: 804-360-7259

www.nanomarkets.net

2.1 Impact of Recent Display Industry Developments on Transparent Conductor Requirements for Touch Displays ...................................................... 20
2.1.1 Product Trends: Of iPads and the Growing Role of Touch .............................................................20 2.2.2 E-Paper, OLEDs and Next-Generation Displays .................................................................................21 2.1.3 The Growing Importance of the LCD Manufacturers as Potential Customers for Transparent Conductors for Touch Sensors ........................................................................................................................22

Page | ii

2.2 Analog Resistive Markets: Not Dead Yet ...................................................... 24

2.2.1 Requirements for Transparent Conductors in Analog Resistive Technology .................................25

2.3 Projected Capacitive Markets: Exciting Prospects for Transparent Conductor Makers? .................................................................................................... 26
2.3.1 Requirements for Transparent Conductors in Pro Cap Technology ................................................27

2.4 Other Types of Touch-Screen Sensor: In-Cell Technologies and Other 28

2.4.1 In-Cell Technologies ...............................................................................................................................29 2.4.2 Surface Capacitive Technologies ..........................................................................................................31 2.4.3 Other Touch Technologies ....................................................................................................................31

2.5 The Rise of Chinese Technology ...................................................................... 32 2.6 Key Points from this Chapter............................................................................ 32

Chapter Three: Transparent Conductors: Materials and Touch ......................... 35

3.1 Whose Market is it Really? ITO or Alternatives in the Touch Sector ..... 35
3.1.1 Comparisons of Available Transparent Conductors ...........................................................................35

3.2 ITO, Coated Films and the Touch Market ...................................................... 38 3.3 The Growing Role for Alternative Transparent Conductive Oxides in the Touch Sector................................................................................................................ 39
3.3.1 Tin Oxide and Touch ..............................................................................................................................40 3.3.2 Zinc Oxide and Touch ............................................................................................................................40

3.4 Conductive Polymers in Touch Displays ........................................................ 41 3.5 Nanomaterials and Touch Displays ................................................................. 41
3.5.1 Silver-based Nanomaterials...................................................................................................................42 3.5.2 Carbon Nanotube-Based Materials .......................................................................................................43

3.6 Other Alternative Materials .............................................................................. 43

3.6.1 Graphene at Rice University..................................................................................................................44 3.6.2 Other Nanometallic Materials ................................................................................................................44

NanoMarkets, LC | PO Box 3840 | Glen Allen, VA 23058 | TEL: 804-270-4370 | FAX: 804-360-7259

www.nanomarkets.net

3.7 Key Points from this Chapter............................................................................ 44

Chapter Four: Eight-Year Forecasts of Transparent Conductors in Touch Display Sensor Markets ................................................................................................ 47 Page | iii
4.1 Forecasting Methodology .................................................................................. 47
4.1.1 Display Types Covered in the Forecast ...............................................................................................47 4.1.2 Touch Technologies Covered in the Forecast.....................................................................................48 4.1.3 Materials Covered and the Penetration by Sector .............................................................................49 4.1.4 Transparent Conductor Pricing Assumptions ......................................................................................50 4.1.5 Other Sources of Information ...............................................................................................................51

4.2 Eight-Year Forecasts of the Underlying Touch-Display Market ............... 52 4.3 Breakout by Type of Touch Technology ......................................................... 53 4.4 Breakouts by Type of Transparent Conductors Used ................................. 55 4.5 Breakouts by Type of Transparent Conductors Used ................................. 61
4.5.1 Continuing Dominance of ITO Throughout the Forecast Period .....................................................63 4.5.2 Touch Opportunity for Transparent Conductors May Decline ..........................................................63 4.5.3 Transparent Conductor Sales by Type of Touch Sensor...................................................................64

4.6 Levels of Confidence in Our Existing Forecasts and Alternative Scenarios ...................................................................................................................... 65 Acronyms and Abbreviations Used In this Report ............................................. 67 About the Author ........................................................................................................ 68

NanoMarkets, LC | PO Box 3840 | Glen Allen, VA 23058 | TEL: 804-270-4370 | FAX: 804-360-7259

www.nanomarkets.net

List of Exhibits
Exhibit E-1: Non-ITO Transparent Conductors and its Main Competitors: A Guide .....................................................3 Exhibit 2-1: Touch-Screen Technologies by Size and Multi-Touch Functionality ........................................................21 Exhibit 2-2: Touch-in-Pixel Technologies .....................................................................................................................29 Exhibit 3-1: Important Parameters for Transparent Conductors Used for Touch-Screen Sensors..............................35 Exhibit 3-2: Transparency of Transparent Conductive Material Types........................................................................36 Exhibit 3-3: Sheet Resistance of Transparent Conductive Material Types ..................................................................37 Exhibit 3-4: Flexibility of Transparent Conductive Material Types ..............................................................................37 Exhibit 3-5: Selected Projects and Collaborations in the CNT TC Space ......................................................................43 Exhibit 4-1: Cost of Transparent Conductive Material Types 2012 ...........................................................................50 Exhibit 4-2: Forecast of Transparent Conductive Materials Requirements in Touch-Screen Display Sensors ............52 Exhibit 4-3: Forecast of Transparent Conductive Materials Requirements in Touch-Screen Display Sensors by Type of Technology (Millions of Square Meters of Substrate) ...................................................................................53 Exhibit 4-4: Forecast of Transparent Conductive Materials by Type in Touch-Screen Display Sensors: Pro Cap .......56 Exhibit 4-5: Forecast of Transparent Conductive Materials by Type in Touch-Screen Display Sensors: Analog Resistive .............................................................................................................................................................57 Exhibit 4-6: Forecast of Transparent Conductive Materials by Type in Touch-Screen Display Sensors: Other ..........60 Exhibit 4-7: Forecast of Transparent Conductive Materials by Type in Touch-Screen Display Sensors: All Markets ($ Million) ...............................................................................................................................................................62 Exhibit 4-8: Forecast of Transparent Conductive Materials by Type in Touch-Screen Display Sensors: by Type of Sensor ($ Million) ..............................................................................................................................................64

Page | iv

NanoMarkets, LC | PO Box 3840 | Glen Allen, VA 23058 | TEL: 804-270-4370 | FAX: 804-360-7259

www.nanomarkets.net

Executive Summary
E.1 Transparent Conductors in Touch: Markets May Not As Big Some People Think! E.1.1 The Touch Market Explosion

Page | 1

Touch sensors for touch-screen displays almost all use transparent conductors to some meaningful degree. At the same time, thanks largely to the arrival of iPhones, iPads and similar products, touch displays represent a rapidly growing market. The combination of these two facts would seem to indicate that there are considerable opportunities for firms selling transparent conductors into the touch-screen display market and it fully explains why for many of the firms offering novel transparent conducting materials, the touch-screen market is seen as an opportunity: Indeed, for the growing number of firms that have developed novel materials that are intended to serve as alternatives to indium tin oxide (ITO), the touch-screen sensor market is seen as a (perhaps the) major source of early revenues. And in the current economic situation early revenues are the ones that matter. As this report shows, our research indicates that a significant market exists for novel transparent conductors in the touch-screen display market. Our research also suggests that in addition to an objective need for new materials, the manufacturers of touchscreen displays are more open to the idea of using new materials than many other suppliers/manufacturers in other parts of the display industry. There are numerous touch-sensor firms, but relatively few conventional display firms. This means that there are more targets for the sales and marketing strategies of alternative transparent conductor firms. In addition, even if the alternative transparent conductor firms were able to get through the selection process with a large LCD manufacturer, the transparent conductor firm may not be in a position to create enough transparent conductive coating to meet the LCD firm's needs. This is not a problem in the touch-sensor market. Many of the touch-sensor firms are new and few of them have large existing fabrication facilities, so they are more likely to give a new material and material supplier a chance.
E.1.2 The Limits of Touch as a Market Driver for Transparent Conductors

Nonetheless, NanoMarkets also believes that a careful analysis of evidence shows definitively that there is a limit to how far this strategy can be pushed. The touch-screen display market
NanoMarkets, LC | PO Box 3840 | Glen Allen, VA 23058 | TEL: 804-270-4370 | FAX: 804-360-7259

www.nanomarkets.net

can serve as a revenue generator for transparent conductor manufacturers only up to a certain point. Although touch technology is spreading rapidly in the mobile segment, larger displays used for televisions and desktop monitors do not seem to need touch. A few attempts to Page | 2 get touch into these products do not seem to have generated large demand. (Kiosks are the main counterexample, and digital signage may be a counterexample for the future; but all-in-one computers with touch controls have not set the world on fire!). The implications for the transparent conductor makers are that large displays (i.e., precisely those displays that might potentially use the largest amount of transparent conducting material) may not be part of the serviceable market for new transparent conductor firms. Another restriction on the opportunities to be found in the touch-screen sector from the perspective of the transparent conductor manufacturer can be found in the supply chain. The decision makers who specify materials for touch sensors are increasingly to be found in Asia and are not always easy to reach. We note that transparent conductor makers that seem to have been successful in reaching the touch-screen display market in the recent past have a well-developed infrastructure for selling into Asia. As the mainstream LCD makers get into the touch-sensor business the necessity for building bridges to Asia become all the more essential. Also, ITO isn't going to go away in the display touch-sensor market any time soon. Adoption of new and advanced materials as substitutes for ITO is largely led by industry pioneers in the touch-display industry at the present time. We cannot be sure that these pioneers will convince their peers to use newer materials. And it may well be that others will be much more conservative in such matters. It is interesting to note that one noticeable trend that NanoMarkets has identified in the touch-sensor market is not (as one might have expected) away from ITO to advanced nanomaterials, but rather from ITO to AZO; a material whose advantage over ITO is mainly to be found in price. The projective capacitive (Pro Cap) displays that represent the fastest growing segment of the touch-display industry have less reason to move away from ITO, because flexibility is not required to the same degree as for analog resistive displays.

The above factors work together to restrict the available market for transparent conductors in the touch sector. As one major supplier of ITO alternatives that we interviewed recently told us, his firm could produce in a month the entire worldwide supply of transparent conductive

NanoMarkets, LC | PO Box 3840 | Glen Allen, VA 23058 | TEL: 804-270-4370 | FAX: 804-360-7259

www.nanomarkets.net

material needed by the touch-sensor industry. This was clearly intended as a reference to the size of the market and not the size of his firm!
E.1.3 Emerging Strategic Issues for Firms Selling Transparent Conductors into the Touch-Screen Sector

We are not sure whether this statement is literally true, but it does dramatize what we see as a central fact of the touch markets considered in this report, namely that while they do genuinely appear to offer an early route to first revenues for suppliers of the latest kinds of transparent conductors, there is just so much business that transparent conductor makers can squeeze out of the touch-display market. This has some important strategic consequences for transparent conductor providers: To build a sizeable business, novel transparent conductor makers will have to find ways to leverage their business from the touch-sensor business into the mainstream flatpanel display (FPD) business. Only penetrating the FPD business offers suppliers of advanced transparent conductor materials a way to grow a transparent conductor firm to many hundreds of dollars in revenues. The touch-screen display market is likely to prove very competitive; so many transparent conductor firms are focused on selling into it right now. In NanoMarkets' view, this market is by no means big enough to support all of the potentialand actual competitors. Therefore, the firms active in this space are going to have to focus for their success on marketing issues as much or more than technical issues. As we have already mentioned, among the most important of these marketing factors is channel development. Some of the firms in this space clearly get this point. But, in our opinion, some do not.

Page | 3

E.2 Current Strategies and Firms to Watch

What follows is a quick survey and assessment of firms that are pursuing the touch-screen sensor industry with novel transparent conductors. It is not intended as a complete review of the firms active in this space. Instead, we have focused on firms, products and strategies that are more touch-specific. That said, Exhibit E-1 summarizes all the firms that appear to be offering alternatives to ITO, whether for the touch or other sectors.
Exhibit E-1 Non-ITO Transparent Conductors and its Main Competitors: A Guide
CNTs
3M Agfa Applied NanoTech

Silver
X ?

Copper
? X

Polymers
X

ITO Inks

NanoMarkets, LC | PO Box 3840 | Glen Allen, VA 23058 | TEL: 804-270-4370 | FAX: 804-360-7259

www.nanomarkets.net Blue Nano Cambrios Canatu Carestream Cima NanoTech C3Nano Dai Nippon Printing Dow Chemical Fujifilm Ferro Heraeus Kodak Linde NanoForge PolyIC Saint-Gobain Sigma Technologies Sumitomo Suzhou NanoGrid Toray Ulvac Unidym NanoMarkets 2011 X X X X X X X X X X X X X X X X X X X X X X

Page | 4

X X

E.2.1 Cambrios: Success in the Touch Market with Nanosilver

Cambrios has been the big success story of the novel transparent conductor space in that it has come to market with a nanosilver ink and found genuine customersincluding touch-related customerswithin a relatively short space of time. It has also attracted strategic investments from tier-one Japanese electronics firms including Mitsubishi and Sumitomo. Another strategic investment has come from Nissha Printing, which Cambrios says is the world's largest supplier for sensors for touch-screen displays, which gives it excellent channels to the touch market. At the time of writing our understanding was that Cambrios had a few dozen people working for it and that it expected to be cash flow break-even by Q3 or Q4 in 2012. Within the touch space, Cambrios has focused heavily on Pro Cap touch as an application; Cambrios says that the reason it is targeting the Pro Cap sector first is that it can yield immediate revenues and in this context we note that Cambrios claims that its material has higher conductivity than ITO. Here Cambrios' primary products are coated PET films, although it also sells its inks as a separate product. Cambrios' biggest triumph in this space to date has been to ship material for a touch sensor that is being used in a commercial display that in turn is used in a cell phone that is in full production and available in stores. In this case, the touch sensor and touch module solution were developed by Nissha Printing in Japan and Synaptics in the U.S. None of the parties are saying which brand of cell phone has the Cambrios material in

NanoMarkets, LC | PO Box 3840 | Glen Allen, VA 23058 | TEL: 804-270-4370 | FAX: 804-360-7259

www.nanomarkets.net

it. Informed speculations in this regard say that it might be Samsung or "Blackberry;" the former seems more likely but we are not sure of either. What we do know is that the phone in question is an older model and ITO versions of this phone are being supplied alongside the ClearOhm versions. So even though we are talking about one of the first real examples of a Page | 5 transparent conductive nanomaterial here, the quantities involved could be quite small. Cambrios has important alliances with Synaptics and (as we have already mentioned) Nissha Printing in the touch space. Synaptics has a reference design partner agreement with Cambrios. Under the agreement, Synaptics develops reference designs incorporating ClearOhm material as a transparent electrode for projected-capacitive touch sensors. Synaptics is a developer of touch and other novel customer interface technologies. Cambrios is also supplying ClearOhm to Toray Advanced Film in Japan. Toray is coating these onto PET films for sale to the touch-screen market among others. Toray Advanced Film is said to be the world's leading supplier of various base films and cutting-edge processed film products. It is also yet another Japanese firm that has made an investment in Cambrios. Cambrios is one of the few firms that can really be said to be a winner in terms of shipping transparent conductors to the touch market today. It is still a small firm though, and it remains to be seen how well it will do in the future. It will probably need to attract more capital, but it seems to be quite good at that. But it is also possible that with its apparently superior technology it will be acquired by some larger firm, perhaps one of the firms that have invested in it.
E.2.2 3M

By contrast with Cambrios, 3M is a company that is not especially visible in the touch market. However, we think it is a company well worth watching in this space, if only because it is both a supplier of touch sensors and a supplier of alternative transparent conductors. These two roles are not always connected, but we note that 3M created its surface capacitive touch-screen technology specifically with the goal of minimizing the use of transparent conductor; surface capacitive technology uses only one layer of ITO. This company also has done work in alternative TCO materials for transparent conductive applications. In a related development, 3M also sells its MicroTouch ClearTek hard coat to be chemically bonded to the touch screen's glass substrate to help protect the ITO conductive coating. This coating also enhances the light transmission value to 91.5 percent and also acts as a protective coating reducing the likelihood of sharp objects scratching the ClearTek hard coat and the ITO conductive coating.

NanoMarkets, LC | PO Box 3840 | Glen Allen, VA 23058 | TEL: 804-270-4370 | FAX: 804-360-7259

www.nanomarkets.net

E.2.3 Some Nanotube Ink Firms of Interest

Firms that have developed carbon nanotubes for transparent conductor markets have apparently had quite a hard time of it and seem to have run into significant technical problems over the past few years. Originally, this area was owned by two firms, Eikos and Unidym, but Eikos now no longer seems to see the potential for its transparent conductive materials in the Page | 6 commercial sector and appears to be focusing entirely on military/ government contracts. Recently, new firms have appeared in the carbon nanotube-based transparent conductor space, some of which have an interest in touch. Unidym: Unidym was acquired by the Korean company, Wisepower, and its future direction is unclear. Nonetheless, Wisepower is known to be supporting Unidym's activities in transparent conductors for touch panels as well as a few other applications. In fact, even before the acquisition Unidym and Wisepower had a partnership arrangement under which Wisepower markets and co-develops Unidym's proprietary film and electronic ink products for the Korean touch-panel and display industries. In other touch-related developments, Unidym announced that touch-sensitive MP-4 players enabled by Unidym's transparent conductive films were displayed at the 75th China Electronics Fair and that the devices were displayed in an exhibit by G Star Laser. Unidym has also announced an agreement with the global glass manufacturer Guardian Industries to develop and commercialize carbon coated glass products for touch-screen devices and other applications. Under the agreement, Guardian will fund a joint development effort to optimize and scale carbon-coated glass products. The companies will jointly market the coated glass products to customers in the touch-panel industry. Others: There are other start-up firms appearing that may ultimately have some impact on the touch-display industry but they are at such an early stage of development that while they deserve watching, they are probably not going to grab a large market share in the touch sensor market any time soon. Canatu is a Finnish company that has been around for a few years but roughly fits into the description given above. Its first products are flexible transparent conductor films that are designed for ITO replacement. These films consist of random networks of single-walled carbon nanotubes. First customers for these films will supposedly be in the touch-screen market. Another, newer firm is C3Nano, which claims to have developed a "sustainable, proprietary hybrid carbon nanotube-based transparent electrode ink and film for use in devices such as touch screens . . ."

NanoMarkets, LC | PO Box 3840 | Glen Allen, VA 23058 | TEL: 804-270-4370 | FAX: 804-360-7259

www.nanomarkets.net

E.2.4 Other Silver-Based Transparent Conductor Firms

Silver-based transparent conductors have been by far the most rapidly evolving sector of the novel transparent conductor market. This reflects, in part, the intrinsically high conductivity of silver and the fact that it is relatively easy to work with. It also reflects the fact that other firms would like to follow in Cambrios' successful footsteps. The firms in this space range from huge Page | 7 multinationals (Kodak and Dow) to smaller start-ups (Blue Nano) and a lot of firms in between. Each of these firms has its own motivations for getting into this business and some of these have targeted the touch sector more than others. Dow Chemical: Dow has begun to explore the transparent conductor space and is examining several options including silver grids and silver nanowires, as well as carbon nanotubes. Its primary business model will be to look at areas where it can establish a strong IP position, but it says that it is very open to working with other firms. Its development in the silver grid space is initially proceeding internally, but its silver nanowire activities are more likely to involve outsiders. Dow has targeted areas that include touch-screen displays, but also LCD and PV applications. Rugged displays seem to be of particular interest to this company. We believe it is still too early to say what this huge company will achieve or not achieve in the markets that we focus on in this report. Hitachi: Hitachi is one of several high-profile companies that are working with Cambrios. It is combining Cambrios' ClearOhm film with Hitachi Chemical's photosensitive film technology to develop a transparent conductive film that can be transferred to various substrates including glass, polycarbonate and PET film. The company says that it plans to ramp up to large volumes with this material during 2012 and that it will be used for cell phones and tablet PCs, presumably in the touch subsystem. Cima NanoTech: This company has strong connections to Asia, has been around for a while, and has lots of experience in the nanosilver space. It has recently developed a transparent conducting film called SANTE and has targeted the touch-display industry and especially the particularly physically vulnerable resistive touch screens with this product. The company has spelled out why its SANTE product would be useful for Pro Cap sensing. Here it says that the "availability of a transparent conductive SANTE Film with substantially lower sheet resistance than comparable ITO [and] opens up the design space for electrode geometries and display sizes that otherwise would have been impractical or unattainable." Carestream Advanced Materials: This company has released a nanosilver-based transparent conductive film called FLEXX targeted at the analog resistive touch-screen market as well as

NanoMarkets, LC | PO Box 3840 | Glen Allen, VA 23058 | TEL: 804-270-4370 | FAX: 804-360-7259

www.nanomarkets.net

OLED displays, flexible displays, and other applications. FLEXX is based on silver nanowires. The company is currently offering a sampling program for touch-panel manufacturers interested in FLEXX. FLEXX is believed to already have some customers and the company is also planning to Page | 8 introduce higher performance films (with 100-300 ohm performance) that will move its addressable market to e-readers and cell phone displays. PolyIC: This company is best known for its development of organic RFID. However, this strategy/market has not turned out as successfully as it once hoped. As a result, the company has transformed itself into a firm that sells silver-based transparent conductors. PolyIC says that its new strategic direction allows it to exploit its key competency in R2R fabrication and that the product will be useful to display firms that would like to dispense with the need to pattern ITO. This might not include the large LCD makers, but PolyIC believes that it definitely does include firms in the mobile display business, especially those looking at multitouch capabilities for low-cost phones. Suzhou NanoGrid: This is a new company that is a spinout from the functional films group at the Suzhou Institute of Nanotech. Among other products, this company is in the process of developing a silver-based transparent coating film that is created using an "imprinting" technology that is similar to embossing, and fabricates a thin grid on PET. The market being targeted at the present time is touch screens. Blue Nano: Blue Nano is a small manufacturer of nanomaterials with a proprietary way to make its materials. It appears to be offering silver nanowire-based transparent conductors with a specific focus on touch screens. It is still very unclear what resources this company can really bring to bear on touch markets with its new materials. Agfa, Heraeus and Kodak: As we discuss elsewhere in this report, conductive polymers are already being used to some extent in touch sensors, although it is universally acknowledged that conductive polymers (or more specifically PEDOT) can only address a fairly narrow part of the market for TCs, since it is inherently low performing. For years it has looked as if the major strategy that would be employed by the major makers of PEDOT to address this situation would be to improve the quality/performance of their PEDOT material. However, now that the alternative TC market appears to be taking off, we note that firms that have been firmly entrenched in the conductive polymers space are looking to other materials as a way forward. In particular, Agfa is planning to expand its TC offerings to include

NanoMarkets, LC | PO Box 3840 | Glen Allen, VA 23058 | TEL: 804-270-4370 | FAX: 804-360-7259

www.nanomarkets.net

inorganic materials including silver and possibly even copper. Heraeus is currently supplying Kodak with conductive polymers, which will give the company an initial way to move forward in the TC space. But eventually Kodak plans to expand to supplying transparent conductive inks for its well-established flexography business.
E.3 Opportunities for Transparent Conductors by Type of Touch Sensor

Page | 9

Although there are many kinds of touch-screen technology, two dominate; analog resistive and projective capacitive. The first seems more in need of ITO replacement, but is in relative decline. The second is going through a rapid growth phase and thereforenaturally enough has become a focus of many firms selling alternatives to ITO. There are actually many kinds of touch-screen technology, but these two account for the vast majority of revenues in the touchscreen industry and therefore the only sizeable opportunities for manufacturers of novel transparent conductors.
E.3.1 Analog Resistive Opportunities

Analog resistive is an older technology, which seems to be in especial need of improved (i.e., more physically resilient) transparent conductors. However, analog resistive technology is in relative decline because of the limitation on its capabilities; it does not offer multi-touch capabilities, for example. Nonetheless, NanoMarkets does not expect analog-resistive technology to disappear anytime soon. With the advent of new high-end projected-capacitive touch-screen devices resistive touch screens as they currently exist appear to be on a path to becoming the "workhorse" of the touch-screen market, relegated to the low end of touchscreen applications. As a result, they still present opportunities for the transparent conductor maker. Sensors in most of the current generation of analog resistive displays currently use two layers of ITO; which can add up to fairly large orders for transparent conductor firms. In addition, breaking into the analog resistive market is made relatively easy because existing analog resistive displays, even with ITO in them, exhibit relatively low transparency. The reduced clarity from the multiple layers of ITO essentially lowers the bar for performance for ITO alternatives in resistive touch screens, at least as far as transparency is concerned. The role of analog resistive as a "workhorse" technology may also mean that these touch displays do not need very high performance from the transparent conductors that they use; a fact that may help sell alternate transparent conductors in this space.

NanoMarkets, LC | PO Box 3840 | Glen Allen, VA 23058 | TEL: 804-270-4370 | FAX: 804-360-7259

www.nanomarkets.net

E.3.2 Projected Capacitive Opportunities

Projected capacitive technology has more functionality, is growing rapidly (it is the kind most widely deployed in smartphones and tablet computers), but seems to have less immediate need to switch away from ITO usage. The most obvious advantage that Pro Cap has over analog resistive is its ability to support multi-touch and this is certainly what caused Apple to Page | 10 adopt this technology. Nonetheless, Pro Cap does have some downsides; its power consumption is not especially impressive when compared to analog resistive technology, it is harder to integrate into a display/final product because of its noise sensitivity. In addition, Pro Cap technology cannot work with a regular stylus or, in many cases, a gloved finger. Most of the alternative transparent conductor firms that we have talked with seem to be setting their sights on the Pro Cap touch sector; this is where the growth is. The potential for projected-capacitive touch screens is for screen sizes from 2 inch to 100 inch, although the largest ones must use wire electrodes instead of ITO strips. Also, in Pro Cap displays, the technology operates with an electrical field and the ITO layers do not have to suffer physical bending. This means that ITO is less challenged and there is thus less reason for the manufacturers of touch sensors to switch to alternative transparent conductors in the Pro Cap space. As a result, alternative transparent conductor firms that are targeting the Pro Cap touch-display market cannot rely too heavily on the flexibility of their material, but instead must focus on cost and performance issues.
E.4 Supply Chain Opportunities for Transparent Conductor Firms Serving the Touch Sector

In the touch-display industry, the display itself and the touch sensor are manufactured by two different firms. For the most part the display is manufactured by large multinational firms in Asia, although for some of the newer display technologies the geography of suppliers is more diverse. The manufacturing of the touch sensorat least for the main touch technologies involves a much larger number of entities and for the time being it is these that are the current target markets for the transparent conductor firms trying to break into the touch market. Traditionally, OEMs in the cell phone and computing industryor more precisely the assemblers that they usehave done the integration of the touch sensor and the actual display, although in some cases this integration may be done by the touch-sensor maker. This structure is advantageous to the supplier of transparent conductors in that there are a large number of touch-sensor makers, so, by extension, many potential customers for transparent conductor firms. However, the supply chain structure described here may begin to
NanoMarkets, LC | PO Box 3840 | Glen Allen, VA 23058 | TEL: 804-270-4370 | FAX: 804-360-7259

www.nanomarkets.net

change in the next few years, with integration of the touch sensors into displays occurring more and more at the level of the display maker itself. The reason for believing this may happen is that now that touch is very much in the mainstream of the display industry, the display makers have a reason to want to own it. And at the technological level, there are now a growing number of "in-cell" technologies that enable display makers to incorporate touch directly into Page | 11 the LCD module as part of the fabrication process. Suppliers of new transparent conductors (ITO alternatives) for the touch sector stand to benefit from this change in the supply structure to some extent. In particular, it gives them their first big entre into flat-panel display industry, which is the place that they have to get if they are going to build sizeable businesses: However, the shift of the touch industry supply chain to the level of the display module maker means that the transparent conductor maker may have fewer potential customers to chase after. It also means that transparent conductor firms will have to build considerable marketing infrastructure closer to the LCD firms in Asia. Yet another factor is that some of the in-cell display technologies may ultimately need less transparent conducting material than is needed in today's technologies.

The threats to the transparent conducting material business that is presented by the supply chain transition mentioned above are not likely to emerge quickly. At least, the shift just described has failed to take off quite as fast as some people in the industry expected. Meanwhile, the transparent conducting industry will be dealing with the touch-sensor makers for the most part. These are scattered across the globe, but are increasingly located in Asia; mostly in Japan, China (especially for phones) and Taiwan (especially for computers).
E.5 Summary of Eight-Year Forecasts of Transparent Conductors for Touch Sensors

In Exhibit E-2 we summarize NanoMarkets' latest projections for the usage of transparent conductor materials in the touch sector. In Chapter Four of this report we break out the market in much greater detail and explain what our methodology was for reaching these conclusions. We note that the value of the market shown here is for the transparent conductor material used in the sensor subsystem. The display itself is also likely to use a transparent conductor; but this is treated as a separate issue in this report.

NanoMarkets, LC | PO Box 3840 | Glen Allen, VA 23058 | TEL: 804-270-4370 | FAX: 804-360-7259

www.nanomarkets.net

Exhibit E-2 Forecast of Transparent Conductive Materials by Type in Touch-Screen Display Sensors: All Markets ($ Million)
2012 ITO Classic Other TCOs ITO and TCO inks Carbon nanotube films Nanosilver films Other nanometallic films Transparent conductive polymers Other TOTAL MARKET NanoMarkets 2011 2013 2014 2015 2016 2017 2018 2019

Page | 12

Transparent Conductive Materials by Type in TouchScreen Display Sensors: All Markets

400 350 300 $ Millions 250 200 150 100 50 0
2012 2013 2014 2015 2016 2017 2018 2019

Other Transparent conductive polymers Other nanometallic films Nanosilver films Carbon nanotube films

NanoMarkets, LC

Exhibit E-3 Forecast of Transparent Conductive Materials by Type in Touch-Screen Display Sensors: by Type of Sensor ($ Million)
2012 Projected capacitive Analog resistive Other TOTAL MARKET NanoMarkets 2011 2013 2014 2015 2016 2017 2018 2019

NanoMarkets, LC | PO Box 3840 | Glen Allen, VA 23058 | TEL: 804-270-4370 | FAX: 804-360-7259

www.nanomarkets.net

Transparent Conductive Materials by Type in TouchScreen Display Sensors: by Type of Sensor

400 350 300 $ Millions 250 200 150 100 50 0
2012 2013 2014 2015 2016 2017 2018 2019

Page | 13

Other Analog resistive Projected capacitive

NanoMarkets, LC

Total Market for Transparent Conductive Materials by Type in Touch-Screen Display Sensors
400 350 300 $ Millions 250 200 150 100 50 0
2012 2013 2014 2015 2016 2017 2018 2019

NanoMarkets, LC

To obtain a full copy of this report please contact NanoMarkets at sales@nanomarket.net or via telephone at (804) 938-0030 or visit us at www.nanomarkets.net.

NanoMarkets, LC | PO Box 3840 | Glen Allen, VA 23058 | TEL: 804-270-4370 | FAX: 804-360-7259