TOUCH PANEL MARKET:
APPLICATIONS & EVOLUTION
CALVIN HSIEH
Research Director, DisplaySearch
C-TOUCH Touch Screen Tech Forum
Shenzhen, China, 2014.11.25
Copyright © 2014 DisplaySearch
Authorized Users may not provide this report, or any part, to non-Authorized Users (internal or external) as stated in the Terms & Conditions.
Touch Industry Trends in 2014-2015

Touch Panel Market



Applications and Beyond: fierce smartphone and tablet PC competition but waiting for NB.
New Material Adoption: sapphire for cover lens, new materials with new sensor patterning.
Makers’ Competition



Embedded Type and TDDI: sensor and controller IC’s change to the supply chain.
Bonding and Assembly: optical bonding and LCM business for higher integration and revenue.
Regional Competition: market saturation for surviving and searching new opportunities.
Business Model from Module Maker to Set Maker
1
Finished Cover Glass
bezel
Bonding
Patterned Touch Sensor
Bonding
FPC
TFT LCD Display
Cover Glass Finishing
Cover Glass
Set’s
Main Board
Chemical
Strengthening
touch controller IC on:
FPC (COF) or main board (COB)
Scribing Cut
CNC Forming


Glass
AR/AS Coating

ITO Film


Set Maker
Touch Sensor
2
Sensor Patterning Process
ITO Target
LCD Panel
Touch Module Maker

Glass Source
consigned for optical bonding in module maker
photolithography
silk printing
laser etching
metal plating
UV-imprinting
other printing methods
Patterning
air bonding in system assembly by set maker
Controller IC
Module Lamination or Bonding
Controller IC
CG
ACF
Flexible PCB
Bonding
Sensor
Panel
Copyright © 2014 DisplaySearch. Authorized Users may not provide this report, or any part, to non-Authorized Users (internal or external) as stated in the Terms & Conditions.
Bonding
*
1
Major Applications and Beyond

Major Applications and Beyond

Embedded Type and Panel Makers

Business Model and Evolutions

Facing Changes and Competition
Total Touch Module Shipment Forecast
Growth from Mobile Phone and Tablet PC

Mobile phone has stable shipment base and growth, tablet PC becomes another 200M-based market.
But > 10” is still frustrated at NB and AIO for high ASP, OS issue, form factor and user behavior.
3,000
Android 4.0 in 2011 pushed smartphones and tablet PCs.
2,500
Unit: Million

2012: iPhone couldn’t keep high Y/Y
but affordable tablet PCs started.
Keys for > 10” growth are budget allocation, form factor and user behavior.
2013-2014: mobile phone and tablet PC account for more
shares to support Y/Y but NB demand is still not clear.
80%
2,000
2011: iPhone, iPad and Android
smartphones led the growth.
60%
1,500
2010: iPad effect
for larger sizes
40%
1,000
20%
500
Unit: Mn
2010
2011
2012
2013
2014
2015
2016
2017
Shipment
771
1,108
1,293
1,513
1,677
1,903
2,144
2,321
Y/Y Growth
27%
44%
17%
17%
11%
13%
13%
8%
SOURCE: DisplaySearch Q3’14 Touch Panel Market Analysis Report
Copyright © 2014 DisplaySearch. Authorized Users may not provide this report, or any part, to non-Authorized Users (internal or external) as stated in the Terms & Conditions.
*
Total Touch Module Revenue Forecast
What’s the Next Growth Dynamic?

Smartphone’s display size growth will be slower. Tablet PC’s mainstream size has been at 7”-8.x” from
9.x”. Remarkable ASP decline since Q3’13 (especially for NB) will result in very low growth.
$50,000
$40,000
Unit: Million $

2010-2011: 9.7” iPad was just
launched to drive larger sized
touch market. PCT took 58%.
2012-2013: ≧ 4” mobile
phones and tablet PC
are helpful to drive ASP.
2014: revenue Y/Y will be smaller than shipment
Y/Y for remarkable ASP decline and slower
display size growth (smartphone, tablet).
80%
ASP decline: NB for demand and tablet PC for low cost
60%
$30,000
Revenue Y/Y
40%
$20,000
Shipment Y/Y
20%
$10,000
Unit: Mn
Revenue
Y/Y Growth
2010
2011
2012
2013
2014
2015
2016
2017
$10,488
$16,571
$23,285
$28,742
$28,464
$28,611
$28,622
$28,078
62%
58%
41%
23%
-1%
1%
0%
-2%
NOTE: PCT includes cover glass and in/on-cell include panel cost.
SOURCE: DisplaySearch Q3’14 Touch Panel Market Analysis Report
Copyright © 2014 DisplaySearch. Authorized Users may not provide this report, or any part, to non-Authorized Users (internal or external) as stated in the Terms & Conditions.
*
Mobile Phone Touch Market Forecast

Panel Makers’ In-/On-cell with > 30% Shares




In-cell: besides Apple’s in-cell sensor on TFT backplane, JDI and LGD try hybrid type which puts X-Y
electrodes onto two pieces of glass (color filter and backplane).
On-cell LCD: Innolux ships “TOD” (caterpillar pattern) since Q1’13; HSD and CPT also started.
Glass-based: OGS as a PCT variation started to grab shares since 2012. But cover glass is an ID
appearance part, its freedom for design and procurement is not necessarily better than GFF.
Film-based: GFF is still mainstream but GFΔ and GF1 are used for entry and middle ends.
2013
2014
2015
2016
2017
2018
Touch Module
1,083,602
1,236,710
1,412,336
1,600,474
1,739,436
1,840,233
Shipment Y/Y
14%
14%
14%
13%
9%
6%
Set Penetration %
61.7%
66.3%
72.5%
78.7%
82.3%
84.3%
Shipments (000s)
2013
2014
2015
2016
2013
2014
2015
2016
In-cell LCD
12.5%
14.0%
13.3%
12.3%
G1F
3.0%
2.5%
1.9%
1.6%
On-cell OLED
16.2%
14.5%
13.4%
12.3%
Metal Mesh
0.0%
0.1%
0.3%
0.9%
On-cell LCD
0.4%
3.5%
5.1%
6.1%
Nanowires
0.0%
0.1%
0.5%
1.2%
P. Capacitive
67.2%
66.7%
67.3%
68.8%
GF Triangle
3.5%
1.9%
1.1%
0.7%
2013
2014
2015
2016
GF1
8.0%
12.4%
15.0%
16.6%
<2.x"
2.0%
0.9%
0.5%
0.2%
GFF
28.4%
29.8%
31.4%
31.6%
3.0-3.x"
25.5%
10.5%
6.2%
4.7%
GG or SITO
7.6%
4.5%
3.0%
2.2%
4.0-4.x"
52.7%
53.2%
52.9%
52.4%
OGS
10.5%
13.5%
15.0%
15.9%
5.0-6.x"
19.8%
35.4%
40.4%
42.7%
PF
1.6%
1.7%
0.7%
0.3%
Technology
Module Size
Major Structures
NOTE: digitizer for Galaxy Note series is categorized as touch sensor, not module.
SOURCE: DisplaySearch Q3’14 Touch Panel Market Analysis Report
Copyright © 2014 DisplaySearch. Authorized Users may not provide this report, or any part, to non-Authorized Users (internal or external) as stated in the Terms & Conditions.
*
Tablet PC Touch Market Forecast

Stronger Demand but Slower Growth




Competition: name brands expel white brands in developed markets but white brands are still strong in
emerging markets which are quite concerned for affordability.
GF2: iPad mini and iPad 2013 adopt GF2 which impacted Taiwan GG DITO value chain.
OGS: Nexus 7 and Kindle Fire 7” adopt Concore™ (FIT, sheet type). 8.9” model is by piece type.
Size: the market will be still big but its average size and ASP are difficult to increase; 8.x” is expect to
be savior keeping ASP but not effective. New 2-in-1 form factor (with detachable keyboard as Asus
T100) or > 12” sizes (as Samsung Galaxy Note Pro) needs a better storyteller as Apple.
2013
2014
2015
2016
2017
2018
Touch Module
250,402
254,494
276,656
298,171
315,841
331,585
Shipment Y/Y
59%
2%
9%
8%
6%
5%
Shipments (000s)
Technology
2013
2014
2015
2016
2013
2014
2015
2016
On-cell OLED
0.0%
0.7%
0.8%
1.0%
G1F
2.2%
1.0%
0.5%
0.4%
On-cell LCD
0.0%
0.2%
0.4%
0.6%
Metal Mesh
0.0%
0.6%
1.6%
2.5%
P. Capacitive
98.9%
98.9%
98.6%
98.2%
Nanowires
0.0%
0.0%
0.8%
1.5%
Resistive
0.7%
0.0%
0.0%
0.0%
GF1
1.3%
1.6%
1.7%
1.8%
2013
2014
2015
2016
GF2
20.7%
26.9%
28.7%
29.3%
5.0-8.x"
69.9%
68.4%
66.9%
65.2%
GFF
46.0%
53.0%
52.8%
51.9%
9.0-9.x"
16.1%
14.7%
13.0%
12.9%
GG DITO
12.0%
1.6%
0.0%
0.0%
10.0-11.x"
13.8%
14.6%
15.0%
15.1%
GG or SITO
3.4%
2.9%
2.4%
1.7%
12.0-13.x"
0.2%
2.3%
5.1%
6.7%
OGS
13.3%
11.3%
10.0%
9.1%
Module Size
Major Structures
NOTE: digitizer for Galaxy Note series is categorized as touch sensor, not module.
SOURCE: DisplaySearch Q3’14 Touch Panel Market Analysis Report
Copyright © 2014 DisplaySearch. Authorized Users may not provide this report, or any part, to non-Authorized Users (internal or external) as stated in the Terms & Conditions.
*
Notebook PC Touch Market Forecast

Waiting for Good Storyteller or 2-in-1?



OGS: it is the best balanced for weight, thickness, cost trend and capacity. But new materials have been
more remarkable for conductivity and transmittance with eventually mature supply chain.
SSG: AUO eTP had more than 2M in 2013. However, brands are less aggressive to make entry models
with touch due to Windows 8 failing to drive market so that its shipment will be limited.
Concerns: {OS, ASP, budget allocation and user behaviors} have been more influential than touch
module cost now. Touch-NB clam-shell form factor will be partially shifted to 2-in-1 tablet-like.
2013
2014
2015
2016
2017
2018
Touch Module
21,027
22,859
26,888
29,793
31,819
33,110
Shipment Y/Y
362%
9%
18%
11%
7%
4%
Set Penetration %
11.6%
12.7%
15.1%
16.7%
17.8%
18.4%
Shipments (000s)
Technology
2013
2014
2015
2016
2013
2014
2015
2016
Combo (sensor)
0.6%
0.6%
0.6%
0.5%
Combo
0.6%
0.6%
0.6%
0.5%
Digitizer (sensor)
1.5%
1.6%
1.5%
1.4%
Digitizer
1.5%
1.6%
1.5%
1.4%
P. Capacitive
97.7%
97.7%
97.9%
98.1%
Metal Mesh
8.9%
19.2%
21.6%
23.4%
Resistive
0.3%
0.0%
0.0%
0.0%
Nanowires
1.1%
0.0%
9.0%
16.3%
2013
2014
2015
2016
GFF
8.3%
15.7%
14.1%
11.1%
10.0-11.x"
36.1%
18.5%
14.6%
11.8%
GG or SITO
1.0%
0.0%
0.0%
0.0%
12.0-13.x"
11.6%
12.0%
10.9%
10.2%
OGS (edge-to-edge)
68.7%
53.5%
48.8%
47.3%
14.0-15.x"
51.2%
68.8%
73.6%
77.2%
SSG (bezel look)
9.7%
9.4%
4.4%
0.0%
16.0-19.x"
1.2%
0.7%
0.9%
0.8%
Resistive
0.3%
0%
0%
0%
Module Size
Major Structures
SOURCE: DisplaySearch Q3’14 Touch Panel Market Analysis Report
Copyright © 2014 DisplaySearch. Authorized Users may not provide this report, or any part, to non-Authorized Users (internal or external) as stated in the Terms & Conditions.
*
All-in-one PC Touch Market Forecast

High Cost and Still Nice-to-have



GG: it was G1G by etch/printing in 2013 (because OGS photo mask fees are high). OGS combining
cover glass and sensor makes material management difficult for fewer shipments.
Metal Mesh / Nanowires: adopting GFF (or G1F) structure, these new materials can improve better part
sharing and use than OGS. Sensor yield rate and spec. are two key issues for future growth.
Others: optical imaging and infrared are less preferred for ambient interference and bezel; SSG has
single source issue. Brands’ expectation is to drive edge-to-edge ID design without bezel.
2013
2014
2015
2016
2017
2018
Touch Module
2,270
3,783
4,094
4,116
4,298
4,310
Shipment Y/Y
9%
67%*
8%
1%
4%
0%
Set Penetration %
13.6%
25.2%
28.2%
28.5%
29.8%
30.0%
Shipments (000s)
2013
2014
2015
2016
2013
2014
2015
2016
Infrared
3.5%
13.0%
7.3%
0.0%
Infrared
3.5%
13.0%
7.3%
0.0%
Optical Imaging
29.7%
15.7%
8.7%
0.0%
Optical Imaging
29.7%
15.7%
8.7%
0.0%
P. Capacitive
64.4%
70.5%
74.8%
85.6%
Metal Mesh
0.7%
31.6%
46.0%
60.8%
Waveguide
0.0%
0.8%
9.2%
14.4%
Nanowires
4.8%
0.0%
16.4%
24.8%
2013
2014
2015
2016
GFF
8.1%
13.7%
0.0%
0.0%
16.0-19.x"
4.7%
4.4%
0.0%
0.0%
GG or SITO
50.8%
21.5%
12.4%
0.0%
20.0-24.x"
93.3%
90.6%
90.5%
88.9%
SSG
0.0%
3.7%
0.0%
0.0%
25.0-29.x"
1.9%
4.9%
9.5%
11.1%
Resistive
2.3%
0.0%
0.0%
0.0%
Waveguide
0.0%
0.8%
9.2%
14.4%
Technology
Module Size
Major Structures
SOURCE: DisplaySearch Q3’14 Touch Panel Market Analysis Report
Copyright © 2014 DisplaySearch. Authorized Users may not provide this report, or any part, to non-Authorized Users (internal or external) as stated in the Terms & Conditions.
*
Emerging: Smart Watch & Automotive

Determining Factors for Future Growth



Smart Watch: ASP, sensor (especially bio-based), government regulations (such as FDA) and user
behavior (big data processing, smart software agent, expertise advising) are key issues for growth.
Automotive: telematics has been a certain trend for cars. In the short term, controlling electronics
needs intensive HMI based on the display. In the long term, the car will become smartly connected.
Touch Supply Chain: smart watch will fit body shapes for wearing so that flexible display and touch
sensors are preferred. Automotive touch is closed supply chain issue, not tech or sensors.
2013
2014
2015
2016
2017
2018
Smart Watch
1,025
4,340
26,187
45,044
54,657
60,690
Shipment Y/Y
905%
323%
503%
72%
21%
11%
2013
2014
2015
2016
2017
2018
Automotive
27,665
33,017
37,983
47,641
56,793
63,592
Shipment Y/Y
21%
19%
15%
25%
19%
12%
Shipments (000s)
Shipments (000s)
2013
2014
2015
2016
Resistive FF
20.5%
17.7%
15.7%
10.4%
Resistive FG
47.0%
43.4%
39.9%
32.5%
Resistive FP
5.8%
5.1%
4.7%
3.8%
Automotive
2013
2014
2015
2016
Resistive GG
11.4%
10.5%
9.7%
7.9%
On-cell
78.0%
10.3%
7.1%
4.6%
P-Cap. GFF
7.0%
11.1%
14.0%
20.0%
P-Cap. GFF
6.8%
10.9%
14.2%
10.1%
P-Cap. GG
6.2%
8.8%
12.1%
15.1%
P-Cap. GG
0.0%
75.7%
76.7%
83.8%
OGS/G2
2.2%
3.5%
3.9%
10.3%
Smart Watch
SOURCE: DisplaySearch Q3’14 Touch Panel Market Analysis Report
Copyright © 2014 DisplaySearch. Authorized Users may not provide this report, or any part, to non-Authorized Users (internal or external) as stated in the Terms & Conditions.
*
Summary for Major Applications

Positive and Uncertain Future



Smartphone and Tablet PC: both applications will probably keep more than 10% Y/Y in 2014-2016 as
major stable growth factor to support the touch panel market.
Wearable Computing: if Apple releases iWatch this Q4 with popularity, this application could have
dramatic growth since 2015. However, it looks promising but not still solid yet.
Notebook and All-in-one PC: both two are lack of convincing scenarios to change user behaviors as
well as need to compete with smartphone and tablet PC for consumer’s budget allocation. > 10” sized
detachable 2-in-1 form factor could be helpful but product ASP concerns.
Mobile Phone
Tablet PC
Notebook PC
All-in-one PC
1,866M
254M
180M
15M
2014 Set Growth Y/Y
7% (smartphone: 14%)
2%
-8%
8%
2014 Touch Demand
1,237M
254M
22.8M
3.8M
2014 Touch %
66.3%
100%
12.7%
23%
2014 Product Trend
entry and mid- end models
<10” affordable or 2-in-1?
touch as add-on, not core value
touch as add-on, not core value
2014 Growth Crisis
average size slowly growing
slower growth for saturation
OS and slow replacement
high cost and no dynamic
Product Life Cycle
every quarter
every two quarters or year
every year
every year
certainly
partially
none
none
• OGS / SSG: > 75%
• new material based: > 10%
• new material based: > 40%
• GG / SSG: > 20%
Major Applications
2014 Set Demand
Carrier Subsidy
Sensor Structures
Cost-down Trend
Optical Bonding w/LCD
Module ASP Trend
• ITO film-based: > 45%
• embedded type: > 30%
• ITO film-based: > 80%
• OGS: > 10%
single-layer and embedded type
single-layer and low spec.
supply chain integration
new materials and process
premium to mainstream
premium models
high end and premium
not yet (except iMac)
small Y/Y decline since 2014
small Y/Y decline since 2014
~50% Y/Y decline in Q1’14
~50% Y/Y decline in Q1’14
SOURCE: DisplaySearch Q3’14 Touch Panel Market Analysis Report
Copyright © 2014 DisplaySearch. Authorized Users may not provide this report, or any part, to non-Authorized Users (internal or external) as stated in the Terms & Conditions.
*
2
Embedded Type and Panel Makers

Major Applications and Beyond

Embedded Type and Panel Makers

Business Model and Evolutions

Facing Changes and Competition
Embedded Type from Panel Makers

Basics for Embedded Type







Technology: almost existing in-cell and on-cell techs adopt projected capacitive. Voltage-sensing and
optical-sensing are almost not available (except Microsoft PixelSense SUR40 by SDC).
Principle: almost all by mutual sensing, but self-sensing multi-touch will be available soon.
Sensor Location: they adopt two glass pieces of the display as the substrates; lower TFT backplane
and/or upper color filter glass (or RGB-AMOLED’s encapsulation glass).
Patterning: they use existing part in the display such as ITO shielding (IPS) and Vcom. SITO-like, singlelayer and “GG-like” are major pattern types.
On-cell: the sensor is located at the upper glass. Usually, it is on the top side. Also, it can be embedded
into black matrix (BM); some makers call it “in-cell” by their own definition.
In-cell: the sensor is located on the TFT backplane (because of Vcom position).
Out-cell: sensor and substrate are not put in the cell such as InnoTouch, eTP and OGS.
On-cell on C/F
On-cell in BM (some call it “in-cell”)
Hybrid In-cell: Pixel Eyes
Tx / Rx by SITO or Single-layer
In-cell: Apple
Rx (to controller IC)
IPS, FFS, TN or VA
Tx by Vcom (from driver IC)
Tx / Rx similar to SITO by Vcom
IPS
FFS
IPS, FFS, TN or VA
PVA
IPS
-
-
-
+
+
Passivation
+
color filter
+
pixel electrode
FFS
common electrode
+
-
+
Passivation
-
Copyright © 2014 DisplaySearch. Authorized Users may not provide this report, or any part, to non-Authorized Users (internal or external) as stated in the Terms & Conditions.
+
*
On-cell Touch Sensor Patterning

SITO vs. Single-layer





Principle: projected capacitive X-Y electrodes must need the insulation. For DITO (GG, GF2) and twosubstrate structures (GFF, G1F), X-Y are naturally separate. As for SITO, ITO bridge with O/C is used for
insulation. Single-layer adopts unit-fragmented (in the sensor area) but line-connected pattern.
SITO: it needs making X-Y electrodes, ITO bridges and O/C on the same side.
Single-layer: it needs finer lines to connect those fragmented units. Otherwise, wider traces result in
poor sensitivity because of occupying more sensor area.
Improvement: makers adopt silver to replace ITO to get narrower traces with good conductivity.
Single-layer Pros & Cons


Cost: single-layer can be lower because of only one photo mask and simple process. SITO needs better
patterning techniques as well as results in lower yield rate.
Limitation: single-layer is not suggested to apply to > 5”. Larger sizes have more X-Y channels and the
fragmented electrode needs more traces in touch area to connect so that the sensitivity is poor.
Panel Maker
SITO pattern (CF top side)
Single-layer (CF top side)
Conventional Name
diamond pattern
caterpillar pattern
Patterning Process
photolithography
photolithography
Photo Mask #
3-4 masks
1 mask
X-Y Insulation
ITO bridge and over coating
no cross section for insulation
≦ 20”
≦ 5”-7”
yield rate and bridge
sensitivity for > 5”
GG SITO
GF1, G1
Suggested Sizes
Major Issues
Similar to Add-on Type
SITO
bridge and O/C for insulation
traces
sensing area
SOURCE: Elan
Copyright © 2014 DisplaySearch. Authorized Users may not provide this report, or any part, to non-Authorized Users (internal or external) as stated in the Terms & Conditions.
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Panel Makers’ Strategy & Concerns

Product Development




Display Sizes: smartphone and tablet PC have remarkable demands; smaller sizes helpful to increase
yield rate. Panel makers can start from these two then extend to notebook PC.
Controller Partner: panel makers must find controller IC makers to co-work to solve noise issue.
TDDI: technical integration is not difficult; preference, freedom, performance and responsibility are
more critical. While embedded type grabbing more shares, the trend will naturally result in controller IC
and driver IC makers integrate each other.
Business Concerns




Customization: smartphone customers need customization such as spec, glass thinning, LCM, open
cell and optical bonding. These makes the business model more complicated.
Cost Optimization: panel makers have different patterning lines (array or C/F end), gen sizes, flow and
capacity. It is not easy to meet all customers’ spec. and cost requirements.
ASP Competition: add-on type’s ASP falls remarkably, customers may not select embedded type.
Revenue or Profit: touch and optical bonding can increase revenue but it’s really worth the efforts?
Driver IC
Display
TDDI
embedded type
Controller IC
Touch Sensor
Business Customization & Quantity
In-cell + On-cell
Touch Displays
by Panel Makers
Cost Optimization & Yields
Air Bonding
System Maker
Optical Bonding
Module Maker
ASP Competition with Add-on Type
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3
Business Model and Evolution

Major Applications and Beyond

Embedded Type and Panel Makers

Business Model and Evolutions

Facing Changes and Competition
New Materials: Changing Supply Chain

Re-shaped for New Materials


New Process: new ITO replacement materials come along with new coating and sensor patterning
methods to save sputtering cost and reduce materials waste.
New Supply Chain: it will impact existing ITO film, patterning equipment and business model.
now
ITO Film Maker
Module Maker
Sensor Patterning
Optical Bonding
System Maker
new
Sensor Maker
Patterned Sensors
Module Maker
Optical Bonding
System Maker
new
Module Maker
Material Coating
New Patterning
Optical Bonding
System Maker
Comparison
Spec.
ITO-based
Metal Mesh
Silver Nanowires
transparent material
non-transparent but can by density
non-transparent but can by density
glass or PET film
glass, COP or PET film
glass or PET film
magnetron sputtering
wet coating or during additive patterning
slot die coating
photolithography
etching and silk printing
UV-imprinting, metal plating,
other additive gravure / relief printing
photolithography
SITO, DITO, GFF, GF1, GF2…
as ITO except SITO (not suggested)
as ITO except SITO (not suggested)
Size Concern
20-30” below
can be 30”above easier
can be 20” above easier
Major Issues
expensive, brittle and yellowish
Moiré pattern: LCD BM and diffraction
coating uniformity, ESD and haze
125μm 150 ohm/sq. at $30-40 /m2
can be lower than ITO film
can be lower than ITO film
Nitto Denko, Oike, Sekisui
Fujifilm, Atmel, UniPixel, LG IT, O-film
Cambrios, Carestream, Seashell
Substrate Option
Deposition/Coating
Patterning
Equipment
Sensor Structure
Sensor Cost Trend
Major Makers
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Optical Bonding: Revenues and Concerns

Optical Bonding




Definition: it is a must between cover glass and touch sensor. “Optical bonding”, “direct bonding” or “full
lamination” to the industry usually means the adhesion to the display.
Principle: it reduces total internal reflection (the light from the display). The effect results from the
adhesive with n=~1.4-1.5 similar to the display glass (n=~1.5). If it is air gap (n=1 for air), TIR happens.
Advantage: optical bonding can increase the display’s optical performance to make colors look more
saturated. However, it also results in more difficult repairing (RMA).
Business Concern


Yield: while display price higher, lower yield rate certainly increases the compensation for the loss.
Business: competition will drive brands’ adoption and optical bonding will be the strength to those
capable module makers and it also increases the revenues by the display panels consigned.
the revenue increased but the profit margin % decreased
Panel Maker
Adhesive
Module Maker
Panel Consigned for Optical Bonding
OCA
OCR (LOCA, liquid OCA)
piece (CG shape cut)
liquid
Processing
bubbles heated and removed
dam then dispensing
Curing Time
none
10 sec, others for preparing
Bonding Re-work
difficult
possible, before curving
RMA for display
difficult or by heating
wire cut
Size Limitation
≤ 10” better
no limitation
Format
Touch Module
light viewed from the display to user’s eyes
cover glass
optical bonding
touch sensor
θ2
air gap
θ1
TIR
display glass
light emission from the display
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Assembly: Supply Chain and Flow

Two Major Sections in Touch Business


Touch Sensor Patterning: this is the core BOM of a touch module, can be add-on or embedded type.
Sensor cost is directly related to patterning method, equipment, sensor structure and material.
Mechanical Parts and Assembly: module makers integrate cover glass finishing (~70% yield rate) to
control BOM cost, optical bonding helpful to increase revenues. LCM and optical bonding needs clean
room; LCM business is helpful for bonding process and revenues.
Sensor Patterning
CG Finisher
Cover Glass Finishing
Optical Bonding
LCM and Housing Assembly
core business
only for OGS
business extension
from touch
module maker
usually not involved
Sensor Maker
Module Maker
by set maker
BOM control
part assembly
part assembly
Housing
Set Maker
flow integration
Backlight
Panel Maker
OGS business
part assembly
consigned for service
customer service
Open Cell
OGS touch sensor
Panel Maker
customer service
Cover Glass
in-cell and on-cell
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4
Facing Changes and Competition

Major Applications and Beyond

Embedded Type and Panel Makers

Business Model and Evolutions

Facing Changes and Competition
Application: From Fixed, Mobile to Wearable

Fusion of Smart Devices and User Interfaces

UI: touch screen is still the best UI for mobile device; others depends on purpose of use and scenarios.
Portability: excellent Necessity: strong
Portability: good Necessity: depending
Portability: poor Necessity: strong for work
Smart Phone: 3” - 6”
Tablet PC: 7” - 13”
Notebook PC: 10” - 17”
cannibalizing
if bigger sizes
bigger and powerful
cannibalizing
if attaching KB
commodity
bigger and powerful
2-in-1 fusion
1kg Ultrabook
Casual
Productive
End Users: devices for scenarios
Wearable
Mobile
Fixed
Appropriate Sensors for Scenarios
Scenarios
Wearable
Mobile
Fixed
Smart Devices
smart watch or accessories
Smartphone, tablet, notebook
TV, AIO, game console
Venue
transport, in- and outdoors
transport, in- and outdoors
home, office, indoors
excellent, < 100g
good, 120g – 2.5kg
poor, 5kg - 50kg
Major Sensors
touch, MEMS
KB / mouse, touch, MEMS
keyboard, mouse, controller
Future Sensors
gesture, semantic
gesture, semantic
touch, gesture, semantic
Bluetooth, Wi-Fi Direct, NFC
Bluetooth, Wi-Fi Direct, NFC
Bluetooth, Wi-Fi Direct
Miracast or not necessary
Miracast, WiGig
Miracast, WiGig
LAN Access
Wi-Fi
Wi-Fi
wired, Wi-Fi
WAN Access
mobile broadband, IoT
mobile broadband
ADSL, cable, FTTH
Portability
Peer to Peer
Cloud-based Content and Apps
Internet Infrastructure
Mirroring
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Application: Notebook PC Evolution

Change: 2-in-1 Form Factor



2-in-1: it has the advantages of tablet and NB but the cost premium (touch, IPS, docking keyboard and
x86) will probably make it impact the existing Ultrabook market as just a form factor option.
Stylus: clam-shell NB certainly has trackpad, 2-in-1 can has the stylus as the pointer function. It can be
bundled for high end or the accessory business. Active PCT stylus is more cost-effective.
Change: Future Segments



Professional: x86 and desktop-based Windows for professional applications such as engineering.
Business: BYOD will bring more iOS- and Android-based to the office. Chromebook will be attractive.
Consumer: ARM, Android and Chrome will bring more affordable NB and 2-in-1 form factor.
Chromebook
Notebook and Ultrabook
2-in-1 Form Factor
≤ 10.x” Tablet PC
X86, ARM v8
X86
X86, ARM v8?
ARM, x86
Chrome OS, Android?
Windows
Windows, Android?
Android, iOS
Single or Dual Window?
Multiple Windows
Multiple Windows
Single Window Enough
Just the Beginning
Replacement Cycle
Cost: Touch, IPS, KB, CPU
Not Productive
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Surviving then Waiting for Next Dynamic

Who Can be the Final Winner?


Situation Now: makers are beset by small and medium application market and fierce competition.
Touch Market Outlook: the industry and market are mature for now but not declining from the peak.
They are just waiting for next growth dynamic but determining factors not in their hands. But before the
day coming, makers need preparation and survival in advance.
Finished CG (Al-Si)
Sensor
IC, FPC & Adhesive
Assembly & Yields
Gross Profits
30%
20%
15%
20%
15%
BOM Cost Control
BOM Cost Control
Outsourced
Optical Bonding & LCM for Revenues
New Wearable and Larger Sizes ahead of Panel Makers
New Material Process Development
BOM Cost Control
Sensor Pattering
Revenues and Profits for Survival
Vertical Integration
CG Finishing
LCM Assembly
Brand Engagement
Optical Bonding
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Calvin Hsieh
NPD DisplaySearch
web: www.displaysearch.com
email: calvin.hsieh@displaysearch.com
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