Five Factors Driving Quantum Dot Display Sales

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According to new research from Technavio, the quantum dot display market is expected to reach a value of $1.6 billion by 2020, growing at an overall CAGR of 76.2% from 2015-2020.

Quantum dots are semiconductor nanocrystals less than 10 nanometres in size. The tiny particles have qualities like high color purity and low power consumption, which makes them an exciting prospect for display applications.

The majority of market growth will take place in 2016 and 2017, where it will top out at 99.44% before dropping slightly in 2018.

Technavio analysts have narrowed down five reasons why quantum dots are taking off in the display market

Growing interest in cadmium free quantum dots (CFQD)

Quantum dots are made up of binary compounds such as cadmium selenide, cadmium sulfide, cadmium telluride, and indium arsenide. In 2014, cadmium selenide was the most commonly used material.

Unfortunately, cadmium is toxic, and global environmental regulations like the Restriction of Hazardous Substances (RoHS) Directive, the Regulation on Registration, Evaluation, Authorization, and Restriction of Chemicals, and the Toxic Substances Control Act have limited the amount of cadmium, lead, and mercury that can be used in consumer electronic devices (for good reason).

This has resulted in increased production of CFQD, and opened the doors for OEMs to use quantum dots in a variety of consumer electronic display devices.

Companies like LG and Samsung are making a joint effort to encourage CFQD, with the latter already incorporating the technology in its SUHD TVs.

Increasing demand for 4K ultra HD TVs

The ultra HD (UHD) TV segment accounts for more than 97% of the quantum dots display market.

Global quantum dot display market by application 2015

Source: Technavio, 2015

More UHD content is starting to pop up, leading to higher demand for 4K UHD TVs. From 2013 to 2014, shipments of UHD TVs grew by 615%.

And now the battle is on as to which display technology will clinch a majority share of the UHD TV market.

LCD, LED, and OLED technologies are all popular because of their picture quality, but the high price of OLED TVs has precipitated a shift in focus toward quantum dots-based TVs. The technology enables OEMs to manufacture UHD TVs with similar color gamut to OLED UHD TV, but at reduced costs.

In 2014, Samsung shifted from 4K OLED TVs to quantum dot-based LED-LCD 4K TVs to circumvent high development costs. Other TV manufacturers such as LG, Panasonic, and Sharp are also developing UHD TVs integrated with quantum dot technology, which is a big reason for the high expected growth rate in 2016 and 2017.

Global UHD TV unit shipments 2015-2020

Source: Technavio, 2015

Increased  production capacity

Quantum dots are a relatively new technology, which means the market has nowhere to go but up. The high growth potential of quantum dots across all segments, including display applications, healthcare, LED lighting, and solar modules have encouraged suppliers to increase their production capacity.

Current production capacity is sitting somewhere around 25 grams per hour. However, this is expected to hit 1,000 grams per hour over the forecast period as vendors focus on scaling up production processes, to reduce the supply-demand gap.

Companies increasing their quantum dot output:

  • Quantum Materials increased its production capacity to 2,000 kg of quantum dots per annum in 2015
  • Nanosys doubled its quantum dot material manufacturing capacity to 2,500 kg per annum in 2015
  • Nanoco, in partnership with The Dow Chemical Company, has increased its quantum dot manufacturing capacity to 2,000 kg per annum and intends to expand its capacity to 2,400 kg by 2016 and 4,800 kg by 2017

Demand for energy efficient devices

High energy consumption and the related costs have pushed governments to look for more eco-friendly and renewable sources of energy. Quantum dot displays use about 30% less power compared to LCD TVs of the same screen size.

Electricity prices in nations (in $ cents per kWh)

Source: Technavio, 2015

The low-power property of quantum dot displays also enhances the battery life and stand-by time of electronic devices such as smartphones and tablets, making them an attractive prospect for device manufacturers.  

Formation of UHD alliance

In 2015, supply chain members in the global UHD TV market announced the formation of a UHD Alliance to support innovative technologies like 4K, high dynamic range, immersive 3D audio, and wider color gamut.

Alliance members like DirecTV, Disney, Dolby Vision, LG, Panasonic and Netflix, Samsung, Sharp, Sony, Twentieth Century Fox, Technicolor, and Warner Bros have banded together to improve UHD content and technology.

To do this, TV manufacturers are shifting their focus from OLED displays to quantum-based LCD displays to deliver high color gamut, increased color saturation, better brightness, and improved efficiency.