1 Technology Could Revolutionize The Global Lighting Industry

This young lighting technology enables a host of advantages over its predecessors. Here's how to invest accordingly.

Aug 1, 2014 at 8:58AM


A Philips Lumiblade OLED panel, Credit: Philips

Imagine a light source that's highly efficient, doesn't get hot, and distributes beautiful, even light. One that's also paper thin, flexible, and available in a wide variety of shapes and colors, opaque or transparent.

As it turns out, such a lighting technology already exists in organic LEDs, or OLEDs for short. And yes, this is the same OLED tech already being incorporated into ultra-thin, curved next-gen televisions, as well as smartphones and other mobile displays -- the latter of which most notably includes millions of Samsung's Galaxy series devices.

In fact, German lighting manufacturer OSRAM already envisions using OLED in various innovative applications, including luminescent window glass, mirrors that light up when someone stands in front of them, and entire luminous ceilings rather than strip lighting. And Philips (NYSE:PHG) has employed similar applications, including its own interactive mirror and "living" OLED sculptures and walls with light that shifts naturally with your movement. 

But there's a catch: The panels today are still small and, unlike the market for OLED smartphone and tablet applications, the OLED lighting industry is still in its very early stages with no established mass production infrastructure. As a result, OLED lighting currently remains a prohibitively expensive technology.


This interactive mirror switches off the OLEDs in the subject's field of vision, Credit: Philips

Fortunately, that could all be changing soon, starting with a new commercial supply agreement between Philips and OLED technologist Universal Display (NASDAQ:OLED). Under the new deal -- which extends the scope of an eight month-old evaluation agreement between the two companies -- Universal Display is now licensing its intellectual property and selling phosphorescent OLED materials to Philips on a commercial scale. In short, this means Philips is most definitely planning to continue increasing its use of Universal Display's tech in its Lumiblade series of OLED lighting panels.

Don't get me wrong: This doesn't mean OLED lighting will suddenly replace all existing lighting technologies in the near-future. Rather, the shift to OLED will likely take years to fully realize given the current substantial infrastructure in place for both CFL bulbs and their most likely imminent replacements, traditional spot LEDs.

Indeed, Universal Display's own press release this week cited a NanoMarkets forecast as stating "the addressable market for OLED lighting panels could reach $1.4 billion in 2019." That's certainly nothing to scoff at, but it's minuscule compared to the at least $140 billion in revenue projected by the same year for the overall global lighting market. Still, it makes sense that Philips' newly appointed marketing chief, Jay Kim, stated in a recent interview that he believed that "by 2018 at the latest, OLEDs are a household product that you and I can afford to buy."


A color tunable OLED light sculpture from Konica Minolta, Credit: KonicaMinolta.com

The upside? This means early investors in companies like Universal Display -- which is perfectly positioned to benefit by forging additional commercial agreements with businesses entering the phosphorescent OLED materials market -- can still look forward to staggering growth from OLED lighting down the road.

And remember, Philips and Osram aren't the only companies pouring resources into OLED lighting technology. Konica Minolta -- another Universal Display customer -- recently invested $100 million to construct a new plant for the world's first mass production of flexible, color tunable OLED lighting panels. Construction on Konica Minolta's plant is expected to be complete by the end of this summer, with mass production of approximately 1 million panels per month to commence this fall.

Over the long-term, investments like these serve as fantastic validation for the promise of OLED lighting. Given the advantages OLED lighting enables over its predecessors, the global lighting industry will eventually have no choice but to take notice as the cost for OLED lighting panels continues to fall.  When that happens, I think today's patient investors stand to be handsomely rewarded.

Steve Symington owns shares of Universal Display. The Motley Fool recommends Universal Display. The Motley Fool owns shares of 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.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't 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.

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