After a false start, OE is fast becoming a key differentiator for many new products.

Great things are forecast for optoelectronics. The U.S.-based Optoelectronics Industry Development Association (OIDA) predicts a nearly $1 trillion business by 2017. Its Japanese counterpart – OITDA (Optoelectronic Industry and Technology Development Association) – expects the market to surpass $1 trillion.

Liquid crystal displays are the main driver, dwarfing all other optoelectronic components. New innovative technologies such as high brightness light emitting diodes (HB LED) for LCD backlights and organic LEDs (OLED) are also expected catalysts.

By market sector, consumer and entertainment have experienced impressive growth over the past few years. Although communications has suffered an extended downturn, it is now steadily recovering and returning to double-digit growth.

This article draws on information from the International Electronics Manufacturing Initiative (iNEMI) and OIDA roadmaps to look at market trends and technology status, showing key advancements anticipated during the next decade.

The global OE market demonstrated consistent growth between 2003 and 2005, with a compound annual growth rate (CAGR) of 21%. Revenues from OE components, which include devices and modules used in OE equipment, increased slightly more than 50% to $104 billion from $68 billion (Figure 1). Revenues for OE-enabled products (i.e., equipment that uses OE components) climbed 44% from 2003 ($180 billion) to 2005 ($260 billion). Although 2006 numbers were still being tallied at the time of writing, total revenues for components and enabled products in 2006 were expected to surpass $400 billion for the first time.


Display-based products, such as LCD TVs and camera phones/PDAs, have seen the strongest growth. As shown in Figure 2, the three largest growth areas from 2004 to 2005 were LCD TVs (79%), plasma display panel (PDP) televisions (45%), and camera phones/PDAs (41%). Fiber network equipment remained steady, with a growth rate of 16% from 2004 to 2005, an improvement over the 10% growth from 2003 to 2004. Only optical storage drives slipped in 2005, due primarily to the slow development of blue laser optical storage and to competition from solid-state flash memory sticks. Figure 3 shows the distribution of OE-enabled products among the various applications.

The next decade is expected to be a strong one. The three major segments of this industry (consumer/entertainment, computer and communications) are expected to move quickly toward technology and market convergence. The main driver of this convergence is lifestyle. Consumers will demand easier, simpler and faster responses to questions, situations and environment; portability will increase as users want to be more mobile and still remain connected; and the devices used for connection will shrink thanks to novel miniaturization approaches. For example, PDAs are expected to become the universal communicator with new technologies like virtual keyboards, projection displays and hand-sized ergonomics.

A ‘Broad-Based Technology’

Optoelectronics is a broad-based technology found in many diverse applications, ranging from medical and solar to communications and lighting, to name a few. Today, OE is increasingly used to differentiate products. A good example is the mobile phone, where small color displays provide improved features and functions in a wireless RF product. These applications are very high volume, and the OE components within are quickly becoming highly manufacturable with good yields. This is almost the antithesis of the communications market, where low-volume OE components are customized with detailed specifications and have a tendency to generate low yields.

Various markets and applications have differences in requirements. Telecom, military and aerospace require higher quality and performance, as well as more long-term reliability than many consumer and sensor applications. These differences are manifested in the achievable time to market and in the cost of producing acceptable products. Computer and consumer applications require high volumes and low costs compared to military and (current) sensor applications, necessitating operational excellence, higher capitalization levels, larger and less specialized workforces, and advanced fabrication and manufacturing methods. Sensors, optical disk memory, LED/lighting and plastic optical fiber (POF) require wavelengths of light unobtainable with the material systems used for data transmission, necessitating entire infrastructures devoted to each application area.

Differences in materials and processing equipment further complicate matters, as many OE devices are fabricated on a variety of substrates, such as indium phosphide, gallium arsenide, gallium nitride and germanium. Presently, there is much interest in silicon photonics, where OE devices are being fabricated in silicon fabs using silicon wafer materials. The range of materials, therefore, creates issues if optoelectronics is expected to follow the silicon integrated platform trends. In optical communication systems, there are examples of low levels of integration (up to 200 devices) in indium phosphide and silicon photonics.

In addition to the materials issues, guiding light through a wafer is much more difficult than laying out electrical circuits in the silicon electronics field. This has stymied integration since the 1970s. A number of photonic foundries in the U.S. and Europe are attempting to address these technical problems. These programs are addressing the common platforms needed to improve integration in photonic circuits.

Many OE application areas, such as displays or LED lighting, are growing at a level where integration is becoming necessary for product design. In displays, high-volume LCDs use integrated TFTs (thin film transistors) embedded into the display structure to drive row-column matrices for the pixels. In lighting, brighter, more intense lumen outputs are being achieved by ganging many LED devices together at the chip level.

Table 1 lists examples of application areas for OE technology, along with examples of the types of devices and key parameters that have good potential for volume manufacturing and integration.

Markets and Applications

Below are some key markets and applications driving OE technologies:

Displays. This is the largest segment of optoelectronic technology, with a clear trend from CRT to LCD and plasma for large formats, and ever more capable LCD-based color displays in hand-held appliances. This is a large market, capable of driving capital and R&D expenditures. Most displays are used in consumer applications and are, therefore, expected to have short active lifetimes (<10 years, often <5 years). Color and illumination management remains an area of active research; and the reliability of OLEDs must be improved for use in mainstream applications.

Infrastructure communication (telecom and datacom). This sector is the most mature and continues to be a large volume driver, supporting the bulk of the non-display OE component industry. Continuing consolidation may boost profitability; however, R&D levels remain low. Technology needs include coolerless and self-calibrating DWDM sources, silicon photonics, hermetic encapsulants, and hybridization technologies. Figure 4 shows the OIDA communications roadmap. Areas highlighted in red text show the need for increased R&D funding, either by industry or academia, so the technology can potentially achieve the roadmap metrics.

Sensors. While currently a small market for OE, sensors is a growing area. There is some custom development, but there is also substantial reuse of technologies from other areas. Technology needs include tunable narrow linewidth lasers in the near and mid infrared (IR), compact solid state ultraviolet (UV) lasers or LEDs, and better understanding of the reliability of new materials used in sensors and their impact on optical components.

LED lighting. This market is quickly growing and will drive significant revenue during the next two decades, which, in turn, will drive R&D to produce manufacturing infrastructures similar to the silicon semiconductor industry. Today, many LEDs are manufactured on 2" wafers, with a few companies looking to upgrade to 3" As the residential market grows over the next decade, manufacturing capabilities are expected to handle increased throughput from the development of 4" and 6" wafers. LED lighting efficiency, measured in output (lumens) per input (watt) for high-current devices, is expected to surpass that of traditional fluorescent lighting in 2008. Today, the best results are already over 100 lm/W for high-current devices, and over 150 lm/W for low-current devices. Solid-state lighting also offers such advantages as low voltage operation (for battery and humid environment), small size and light weight (including drive circuits), long lifetime, and easy control (low EMI noise). Increased LED efficiency of five to 10 times in the green wavelength will permit significant cost reductions in high-volume products such as BLU (backlighting) of LCD displays. Typically, two green LEDs are used for each red and blue LED. Increasing green LED performance will permit better RGB displays, too, as fewer LEDs will need to be utilized.

Conclusions

The past few years have seen impressive growth for OE in the consumer and entertainment segments. Communications, which suffered greatly because of a downturn in the industry, is steadily growing again. Computer-based optoelectronics is driven by displays, but now includes LEDs, which are being used as backlights for LCD displays. Overall, LCDs are the main driver for the industry, dwarfing all other optoelectronics components.

Optoelectronics’ range of capabilities and technologies generates many opportunities for innovative products.² Optoelectronics’ main challenges involve bringing capabilities to market cost effectively. This is why we are seeing exciting developments in the consumer markets where volume products allow for significant cost reduction. Subsequently, these large-volume opportunities, such as displays and lighting, can access the capital required for development, while optoelectronics in small-volume opportunities need to be exploited carefully.

Developing optoelectronic devices for new products can be very expensive, especially if custom fabrication facilities need to be used, while using existing devices and processes in a system has substantially less cost and risk. The key to enabling the widest range of OE-based products is to ensure cost-effective access to facilities that can produce the required components.

References

1. OIDA, Global Optoelectronics Market Report, November 2005.
2. OIDA, Global Optoelectronics Industry Report and Forecast, November 2006.
3. iNEMI, 2007 iNEMI Roadmap, March 2007.

Michael Lebby is president and CEO of the Optoelectronics Industry Development Association (oida.org); lebby@oida.org. Rick Clayton is a consultant and chair of the optoelectronics chapter for the 2007 iNEMI Roadmap; rick@clayton-assoc.com.

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