Ever since GT Advanced Technologies (NASDAQOTH:GTATQ) 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.
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:
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.
Are you ready for this $14.4 trillion revolution?
I plan on holding onto my shares of Universal Display for years to come, but that doesn't mean it's the only stock out there with huge potential.
Let's face it, every investor wants to get in on revolutionary ideas before they hit it big. Like buying PC-maker Dell in the late 1980s, before the consumer computing boom. Or purchasing stock in e-commerce pioneer Amazon.com in the late 1990s, when it was nothing more than an upstart online bookstore. The problem is, most investors don't understand the key to investing in hyper-growth markets. The real trick is to find a small-cap "pure-play" and then watch as it grows in EXPLOSIVE lockstep with its industry. Our expert team of equity analysts has identified one stock that's poised to produce rocket-ship returns with the next $14.4 TRILLION industry. Click here to get the full story in this eye-opening report.
Steve Symington owns shares of Apple and Universal Display. The Motley Fool recommends Apple, Corning, and Universal Display. The Motley Fool owns shares of Apple, Corning, and Universal Display. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.