NanoMarkets, LC | PO Box 3840 | Glen Allen, VA 23058 | TEL: 804-938-0030 | FAX: 804-360-7259

Notable Recent Developments in Flexible Glass

In the past year, we have seen the flexible glass sector expand its commercialization efforts as

some of the major firms in this area have ramped up their activities. Some notable increases in

the seriousness of intent in this sector over the past year include the following:

Corning officially launched Willow Glass in 2012, its 100-μm-thick material designed for

lightweight, cost-efficient products in the display industry. The material complements

Corning's extensive line of display glass products with a new, ultra-thin material available

in roll form.

Meanwhile, AGC is offering a 100-μm-thick flexible glass material for "sheet-to-sheet"

handling that is available with an easy-to-remove, rigid carrier glass.

NEG has been exhibiting and marketing its own 200-μm-thick flexible glass under the

name "ultra thin sheet glass" for displays and other electronics devices.

Schott's commercially available D 263 eco product is available in sheet form with

thicknesses down to 25 μm. The firm is also developing other flexible glass products.

Re-evaluating the Value Proposition of Flexible Glass: Lower Weight for Initial Revenues

As the flexible glass business has moved forward, NanoMarkets believes the firms involved

have become increasingly focused on where and when money will be made with this new

material. In its earliest days, flexible glass was seen as being somehow connected to the

flexible display concept. However, this association is much less apparent today. Instead,

flexible glass is now seen as serving more immediate demands for mobile display applications.

In NanoMarkets' view, the most immediate selling point for flexible glass at the present time is

that it can, at least in theory, provide a lighter-weight and lower-cost alternative to rigid glass.

Such a material is exactly what is needed by the burgeoning mobile communications and

computing sector, where smartphones are getting bigger and tablets are proliferating. This

growth puts a premium on lower-weight glass, since low weight is at a premium in the mobile

communications/computing sector.

In fact, although billed specifically as flexible, flexible glass is actually the current end point of a

long-established research program to develop thin, lightweight glass, and this program

specifically has always had the mobile communications and computing market in mind.

As things have turned out, flexible glass, as it has emerged, finds the mobile communications

and computing market even more ready for its capabilities than its original backers might have

once thought.

As such, one might think of flexible glass as now returning to its roots in low-weight mobile

display glass, which it was always bound to do. To NanoMarkets, it now seems almost

NanoMarkets, LC | PO Box 3840 | Glen Allen, VA 23058 | TEL: 804-938-0030 | FAX: 804-360-7259

inevitable that the first significant revenues from flexible glass will come from tablet and mobile

phone manufacturers.

R2R Display Manufacturing and Flexible Glass: It's What's Next

Although not an immediate revenue generator, NanoMarkets believes that roll-to-roll (R2R)

display manufacturing is near to generating revenues for flexible glass. Today, most displays

are made in batch processes. However, there is a general concern in the display industry that it

will not be easy to scale the current batch processes for making displays much beyond where

they are now in terms of substrate size. Batch-mode display fabrication continues to scale, but

at a much less revolutionary rate than in the past.

One of the reasons for this slowing down is the use of glass itself; beyond a certain point,

sheets of glass reach a point where they are so unwieldy that they are impossible to work within

batch mode—they are too heavy and too likely to break. Yet the display sector is reluctant to

dispense with glass, which is seen as a high quality product that enhances the marketability of

the final product. Glass is also a fine encapsulation material. {pagebreak}

R2R processes are generally assumed to be inherently less expensive than batch processes,

and the display industry has been attracted to them for some time. However, one reason why

R2R processing has not yet been implemented is that it has been assumed to require flexible

substrates and encapsulation, which in turn has implied the need for (1) plastic substrates,

which might be widely viewed as inferior to glass in terms of performance, and/or (2) expensive

and immature flexible encapsulation technology.

Flexible glass appears to offer an important way to cut this Gordian knot. Flexible glass will

work well as a substrate in R2R plants, but it is still glass; so it overcomes the problems in (1)

and, again because it is glass, flexible glass seems well-designed for being a flexible

encapsulation technology, thereby making an end run around objection (2).

The bottom line here is that flexible glass offers a way for the display industry to smoothly

transition to R2R processes, for which there are strong theoretical arguments.

In other words, NanoMarkets believes that the display industry is discovering that there is a

compelling reason for using flexible glass as an enabling technology for R2R processing. In fact

the pent up demand for flexible glass in this context may be almost as great as for flexible glass

deployed in lightweight mobile displays.

However, what is likely to hold back the demand for flexible glass as an R2R facilitator is that

display makers will not make a quick transition from batch mode to R2R, no matter what. The

transition from one fabrication technology to an entirely different one is not very speedy.

There has been no news in the past year that suggests that the shift to R2R will occur quickly.

However, now that OLEDs, which are highly-suited to R2R processing, are now no longer a

NanoMarkets, LC | PO Box 3840 | Glen Allen, VA 23058 | TEL: 804-938-0030 | FAX: 804-360-7259

niche technology, a fact that has become indisputable in 2012, indicates that R2R's time may

now be at hand. {pagebreak}

Encapsulation, OLEDs, and Flexible Glass: This point about OLEDs is proven primarily by

the fact that active-matrix OLEDs (AMOLEDs) now hold a non-trivial share of the mobile display

market, and their share is set to increase as AMOLEDs begin to be seen more widely in tablets

in 2013. In fact, the use of AMOLEDS seems to be the intent of all makers of mobile phones—

even Apple. And OLED TVs, although much delayed, do seem to be slouching towards

commercialization. The major constraint here appears not to be technical, but rather that the

available capacity for AMOLED is just not there yet.

In addition, OLEDs require much greater encapsulation than conventional display types. OLEDs

are notoriously environmentally sensitive, so encapsulation barriers have always been a

challenge to the manufacturing process. And so while they can be fabricated easily and

inexpensively in an R2R process, their lifetimes are questionable unless they can be very

effectively encapsulated.

At this point most OLEDs are not processed using R2R fabrication. However, more emphasis

on R2R manufacturing in the future seems inevitable, which will, of course, not be able to use

the rigid glass encapsulation that is being used today.

But while many attempts have been made to develop a plastic-based encapsulation film, few

have emerged that provide the necessary protection at an affordable price. In contrast, while it

remains expensive today, flexible glass has excellent barrier performance, and it also benefits

from high transparency, thermal stability, and its status as a known entity in the display

business. As a result, we think that flexible glass may well emerge as the material for OLED

encapsulation where R2R processes are being deployed.

In addition, flexible glass is a potential substitute for low-cost plastics, metals, and other

materials that are currently being proposed to serve as flexible substrates or encapsulation.

To date, the use of flexible glass has been held back by its high cost, but given its advantages

as outlined above, the opportunities could be expanded if the glass industry can convincingly

demonstrate a pathway toward cost reductions. {pagebreak}

Prospects for Flexible Glass in Photovoltaics

The two markets for flexible glass mentioned above are associated with relatively low levels of

uncertainty. Short of some major U-turns in core display industry trends, flexible glass seems to

be uniquely suited to some of the biggest changes that are expected in the display industry

going forward.

NanoMarkets believes that there may also be some opportunities for flexible glass in the solar

panel industry too. However, the uncertainties/risks in this sector are much greater for flexible

NanoMarkets, LC | PO Box 3840 | Glen Allen, VA 23058 | TEL: 804-938-0030 | FAX: 804-360-7259

glass makers in the PV sector, if only because it is much more cost-sensitive with regard to

substrates and encapsulation than are displays. This sensitivity is especially noticeable at the

present time. While the display industry has never been particularly profitable, the current state

of the PV sector could best be characterized as disastrously unprofitable, with many long-

established firms going under.

It is therefore not surprising that few of the flexible glass firms are paying much attention to the

PV sector at the present time. Nonetheless, NanoMarkets believes that they shouldn't ignore it

as a long-term market opportunity. There are several reasons for such quasi-optimistic advice:

Low weight can be as big a factor in the PV industry as it is in the display industry,

particularly in building-integrated PV (BIPV) applications, which is the fastest growing

segment of the PV industry. Low weight lowers the cost of transport for solar panels a

not-inconsiderable part of the final cost of solar panel. It can also make PV panels

easier to install, (especially on walls) and reduce the need to provide additional support

for roofs in certain cases.

Low weight in the PV sector is strongly associated with flexible PV. Indeed, the prime

commercial justification for flexible PV seems to be low weight, rather than flexibility, per

se. And while a variety of PV absorber layers can be made flexible, the most important

ones are also delicate materials that are in need of good flexible encapsulation. CIGS is

the best example here, because it has a noticeable share of the entire PV market and is

quite important in the context of BIPV. OPV and DSC have similar needs, but their long-

term viability is still in question.

The same arguments favoring R2R that we made for displays apply to the PV sector as

well.

NanoMarkets believes that we are going to have to wait for a year or two to see whether there is

any market take-up of flexible glass in the PV sector. For one thing, the firms that are currently

developing flexible glass don't seem to have that much interest in the PV sector. In addition,

firms in the PV sector have little money for innovation at the present time. So there are plenty of

uncertainties associated with flexible glass in the PV sector, especially when compared to the

opportunities for flexible glass in the display industry mentioned above.

Adding to these uncertainties is the fact that, while glass increases the value of a display and

the use of plastic makes the display seem "cheap," this observation does not seem to apply to

PV panels; non-glass substrates are already common in the PV industry. The most likely

scenario for flexible glass in the PV sector is that it will enjoy niche status until it drops

considerably in cost towards the end of the decade, at which point it may find a reasonable

share of the PV market in those products that use environmentally-unstable absorber materials.

{pagebreak}

NanoMarkets, LC | PO Box 3840 | Glen Allen, VA 23058 | TEL: 804-938-0030 | FAX: 804-360-7259

Flexible Glass and Flexible Displays: The First Shall Be Last

When flexible glass was first being talked about a few years back, there was a natural tendency

to associate it with the then popular concept of flexible displays, meaning displays that the end-

user can actually flex. This connection is a natural one, and NanoMarkets still believes that it is

a reasonable one to make; glass is "natural" for displays, and the only kind of glass that could

be used in a flexible display is flexible glass.

However, what has changed in 2012 is that it is far from clear that intrinsically flexible displays

have much of a future. The history of flexible displays over the past decade has already been

one of broken promises, mostly because of technological issues, and in 2012, it became

apparent that the supposed "killer app" for flexible displays probably didn't have as much

potential as was once thought.

This killer app was thought to be a medium-to-large rollable display that could be plugged into a

cell phone in order to turn the phone into something closer to a real computer. Unfortunately for

the flexible display sector, during 2012, the boom in tablet computing seemed to cater to exactly

the same market that rollable displays were supposed to cater to, and as that boom continues

into 2013, it could prove a strong disincentive for firms that were previously looking to create

flexible active matrix displays.

In fact, as far as NanoMarkets is aware, there are no firms today that are anywhere near the

launch of rollable or foldable flexible displays. This situation leads to confusion about what

"flexible displays" really means, and NanoMarkets' impression is that "flexible display" is a term

that is in the process of being defined downwards.

For example, our understanding is that the Youm-brand OLED-display products set for launch

by Samsung in 2013 will be fabricated on plastic (i.e., flexible) substrates, but then encased in

hard plastic. This approach is actually no different from e-readers that use a flexible E Ink front

plane.

Until truly flexible—that is intrinsically flexible—AM displays are available and shown to have

gained customer acceptance, the opportunities for flexible glass in this sector are likely to be

highly constrained. And, unfortunately, it is no longer clear what type of intrinsically flexible

display could actually gain such acceptance.

Some in the display industry seem to believe that intrinsically flexible displays will be first

adopted by the military (which would mean low volume sales), and NanoMarkets has suggested

that, in the next decade, large rollable displays may be used for ultra-high definition TV.

See www.nanomarkets.net for additional details about the NanoMarkets report, Flexible Glass

Markets, 2013 & Beyond