End markets changing, albeit slowly. The transparent conductive film market will reach US$1.2bn in 2025 at the film level (ITO-on-glass, LCD displays, OLED displays and thin film PV are excluded). ITO films will continue their dominance, but silver nanowires and metal mesh will each also reach $126m and $191m in 2025.   Today the market is completely dominated by touch related applications although other applications will begin to take a notable share of this growing pie from 2020 onwards. These applications include smart windows, OLED lighting, emerging photovoltaics, reflective displays, etc. They, together with larger-sized or flexible touch screens, will bring about a new set of performance targets.

The incumbent flexes its muscles

Indium-tin-oxide (ITO) films dominate the transparent conductive film market. Strong trends however seemed to undermine its dominance for a long time. The incumbent had reached its performance limit, so the story went, and therefore could not service the emerging market needs such as ultralow sheet resistance and high mechanical flexibility. This is where alternatives were to step in, succeeding as substitutes thanks to both a performance and cost benefit. These trends are real and are changing the market, albeit with a slower pace than many anticipated. Predictably though, the incumbents have responded to protect their share. They have slashed their selling prices and expanded production capacity. Their new pricing strategy is to lower their price piecemeal every time an alternative is about to win business, while their capacity expansion strategy is aimed at assuaging end-user fears that the supply-demand relationship is too tight.

Make or break years for ITO alternatives. This is all good news for end-users but spells a difficult period of ITO alternative suppliers. Indeed, this market dynamic is making the next two years make-or-break years for ITO alternative suppliers. The barriers to entry have been raised again, whilst at the same time the market segments in which ITO alternatives commanded a performance advantage have disappointed.   For example, the sales of large-sized touch displays have massively undershot expectations whilst the emergence of plastic but rigid touch displays has proved no panacea because it barely budged ITO from its comfort zone.   These market conditions herald an overdue consolidation period. The market forces will weed out suppliers of mediocre alternatives and/or poorly-differentiated companies. This is essential because the number of ITO alternative suppliers has mushroomed recently with the proliferation of many ‘me too’ players. The growing market pie will not sustain all.

The performance bar has been raised in the market

Silver nanowires and metal mesh offer a lower sheet resistance than both ITO and other alternatives without significantly compromising optical quality. Their pricing strategy continues to be based on undercutting ITO to maintain a more-for-less value proposition, although this is becoming increasingly challenging.   In fact, they have increased the performance bar so high that the likes of carbon nanotubes and graphene will be blocked out of the main markets and be pushed towards niche use cases. This suggests that developers of these technologies need to be imaginative again and build on their stronger differentiators such as stretchability, thermoformability, etc. This change of focus is already underway but will come too late for some.   The battle between metal mesh suppliers will be fought on narrowing the linewidth and improving throughput and yield (biggest cost unknown/driver). Amongst silver nanowire suppliers, haze was a point of contention, but now attention is focused on innovation at the formulation level. Here, the first mover advantage will also matter whilst the IP landscape is now no longer white, which further prevents access to new comers.

Leading ITO alternatives are here to stay

The value proposition for the leading alternatives is still strong. Indeed, it is anticipated that silver nanowires and metal mesh will reach $126m and $191m in 2025, respectively. It is anticipated that major adoption announcements will hit the market soon.   Their claimed more-for-less value proposition is however increasingly looking like a more-for-same one. The market penetration journey will therefore be slow as ITO is just about good enough in most existing applications.