Forget Sapphire: Should Corning, Inc. Be More Worried About Plastic OLEDs?

Ever since GT Advanced Technologies (NASDAQ: GTAT  ) signed a deal to supply sapphire material to Apple (NASDAQ: AAPL  ) last November, the market has been flooded with speculation regarding exactly what the folks in Cupertino might be planning.

One of the more popular theories is that sapphire -- which is impossibly hard and nearly as scratch-resistant as diamond -- could eventually serve to replace Corning's (NYSE: GLW  ) Gorilla Glass as the protective cover of choice for Apple's various mobile devices.

While I've already made it clear I don't think that'll happen anytime soon, Corning management has still had their hands full of late rebutting pro-sapphire arguments while extolling the virtues of Gorilla Glass.

Here's an even bigger threat
But what would happen if a technology came along to render the glass portion of electronic displays unnecessary?

Wouldn't you know it, this tech already exists in the form of plastic-based organic light emitting diodes -- or, as they're more popularly known, P-OLEDs.

Plastic OLED prototypes from LG Display and Samsung. Source: LG Display/Samsung.

By mounting an OLED display on a plastic substrate, it can be made flexible and virtually unbreakable -- even able to withstand multiple strikes from a hammer. That's something neither Corning's products nor sapphire can offer.

Through license and material supply agreements with OLED specialist Universal Display  (NASDAQ: OLED  ) , regular OLEDs are already pervasive in today's market by their inclusion in Samsung's Galaxy series phones and tablets. In addition, both Samsung and fellow UDC customer LG Display (NYSE: LPL  )  have already introduced curved OLED televisions and smartphones to showcase OLED's early design possibilities.

Breaking the glass trend
However, each of the commercially available mobile OLED devices we've seen so far has used at least one of Corning's products for various purposes. These not only include Gorilla Glass as the protective cover, but also Corning's lesser-known Lotus Glass, which can be used for multiple purposes including the backplane, the touch sensor/barrier layer, and encapsulation to protect the OLED material from harmful outside elements. 

Corning's ultra-slim, flexible Willow Glass can also be used to coat the otherwise-rigid touch sensor, but even then, it still wouldn't be considered unbreakable.

For now, entirely plastic-based devices seem to exist only as prototypes like the one Samsung demoed at last year's Consumer Electronics Show:

Even so, it appears the industry is continuing to make strides toward doing away with glass over the long run.

Back in January, for example, Samsung reportedly treated VIP attendees at this year's CES to a peek at a new foldable, plastic-based OLED smartphone featuring a flexible metal mesh touch sensor. While those reports stated Samsung was still ensuring the device would stand up to the thousands of folds a typical user would put it through, it could mean Samsung has found a viable alternative to using today's glass-coated ITO touch sensors.

What's more, Universal Display and LG Display have each developed their own proprietary flexible OLED encapsulation technologies. Samsung, for its part, appears to be evaluating competing encapsulation solutions from both Universal Display and manufacturing equipment specialist Veeco Instruments.

Finally, remember that earlier this year LG Display was rumored to have signed an exclusive agreement to supply 1.52-inch, flexible P-OLED displays for Apple's upcoming iWatch product. If that's true, Apple's long-awaited acceptance of OLED could spur the start of a broader movement toward flexible displays.

Corning might have an answer
Don't get me wrong; this doesn't mean Corning will sit back and let one of its more promising growth drivers fade away.

Just last month, Jim Clappin, president of Corning Glass Technologies, contrasted the manufacturing advantages of Willow Glass with the potentially wasteful methods employed with plastic displays:

Some device makers have pursued plastics as a path to achieve thinner displays. But use of plastic as a backplane substrate presents other challenges and trade-offs. Plastic substrates used a glass carrier to run through the panel making process and with the current technology, the carrier's lost after de-bonding. [...] On mature reusable carrier, Willow Glass can be processed using current panel manufacturing techniques. Once the backplane and color filter have been built on the Willow Glass surface and joined together the cell is then debonded from the carriers and carriers can be returned for reuse.

If you're having trouble picturing the process he described, here's graphical look provided by LG Display last month:

Source: LG Display.

In short, by allowing the carrier glass to be reused, Willow Glass could both save manufacturers money and improve their environmental footprint -- that is, at least, assuming plastic manufacturing capabilities don't evolve to save that carrier and negate his argument.

In addition, given Gorilla Glass' relative inflexibility, Willow Glass could also eventually be used not just as a substrate, but also as a new flexible cover material. This could allow Willow Glass to provide some level of scratch resistance, which simply couldn't be rivaled by plastic.

But there's another problem with Clappin's argument: It's not just about being thinner and cheaper. Willow Glass can still be broken much more easily than a comparable plastic display. Cost and environmental issues definitely need to be considered, but is the trade-off worth losing one of the most compelling reasons manufacturers are developing P-OLEDs in the first place?

If one thing is clear in the end, it's that Corning needs to remain aware of this risk. Plastic OLED displays could easily change the face of the electronics industry as we know it, and not everybody will benefit.

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Read/Post Comments (8) | Recommend This Article (8)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On March 30, 2014, at 6:20 AM, Interventizio wrote:

    Exiting technologies indeed.

  • Report this Comment On March 31, 2014, at 5:24 PM, lagunab1 wrote:

    Of course, Apple dumps ~$600M with apparent additional plans for more expansions in Mesa so they can make iWatches....you are so good at predicting the future you ignore what is already known!

    Plastic OLEDs will still need something to protect them unless we now have plastic harder than sapphire. And as you said, this is a a prototype technology...we all know all of those get to production.

    GTAT rules....

  • Report this Comment On March 31, 2014, at 6:12 PM, joeddd wrote:

    Neat technology, but I don't see the value for a smartphone where you have to touch and type. Not just that, but the phone itself is not bendable so what's the point? A bendable screen tethered to a rigid phone/keyboard - what's the point of that? Even the smart phone was bendable, I like looking at a flat screen for most of my content (video, browsing, etc..).

    A flat screen that covers a rigid phone makes more sense then a bendable screen tethered to a rigid (or bendable for that matter) phone to me.

    I could imagine this for non-user-interactive technology, but not for a smartphone. To me it's neat, but not very practice for the application.

  • Report this Comment On March 31, 2014, at 9:17 PM, TMFSymington wrote:

    @lagunab1: On the original deal, already covered that here: http://www.fool.com/investing/general/2013/11/07/the-newest-... . Remember, GTAT will repay that $578 million to AAPL over five years beginning 2015.

    That said, I still think GTAT is a great play both for its existing sapphire applications and upcoming PV solar CapEx from previously-struggling customers. I just don't think it's a threat to replace Gorilla Glass as a whole-screen protective cover.

    @joeddd: On touch/type, reread the two paragraphs below the video on the flexible metal mesh touch sensor in Samsung's foldable device.

    Also, note LG's engineered a flexible battery for its G Flex smartphone. Not using it to the full since G Flex isn't entirely flexible (yet), but a good first step toward a fully-bendable device.

    Finally, I'm working up an article (or two) right now on some of the more practical applications for this tech. Still years away, but certainly a viable threat over the long run.

    Cheers,

    Steve (@TMFSymington)

  • Report this Comment On April 01, 2014, at 8:55 AM, joeddd wrote:

    @TMFSymington: I still can't envision the real value here... Flexible display why - just because it can be done? People like looking at flat images. As for the touch typing, my point again was that it's hard enough to touch/type on a flat surface, much less a bendable one.

    Painting canvasses have been around for 100s of years, since they are canvass they are bendable - yet - people still paint on canvases that are mounted flat.

    Image distortion is not a benefit in most applications (though I can imagine there might be some boutique uses for it). Certainly, when using something a lot, like a smart phone, you really don't want to be futzing around with a screen as you navigate through your mobile electronic life - at least in my opinion.

    Truly neat technology, but useless for a smart phone in my opinion.

  • Report this Comment On April 01, 2014, at 9:12 AM, joeddd wrote:

    @TMFSymington: Just to make my thoughts and comments clear, I do think there is value in a display that may have some "fixed" bend in it. What I mean by that is the display may be convex or concave, but the amount of bend is always fixed/static. My comments are about a "bendable" display, as in the user is bending it as part of the interaction - and thus the display form can be changed from moment to moment - why would anybody want to do that after the novelty of it wears off? What is the application or value for dynamically bending a display?

  • Report this Comment On April 01, 2014, at 10:18 AM, cassius100 wrote:

    Historically organic materials (like plastic) often look great at first, but they age badly, maybe in weeks or months. If you get past this problem, you find other problems because the organic materials are more complex and harder to manage for any application. The prototypes can be very impressive, but after that, it's just one problem after another, and expenses just pile up.

  • Report this Comment On April 01, 2014, at 10:50 AM, cassius100 wrote:

    If you have a choice between an organic and an inorganic material, the inorganic one will always be cheaper and last longer. Since Willow glass is also flexible, if you want flexibility, you will always prefer willow glass to any plastic.

    The real question today is, how long will it be before formica countertops are replaced by Willow glass countertops? Formica is > 100 years old, and the technology has stagnated, because the cellulose/resin material is hard to shape.

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