Invar ingredients and rolling process crucial
According to UBI Research CEO Yi
For South Korea to localize the production of fine metal mask (FMM) used in the production of organic light emitting diode (OLED), companies developing ways to manufacture FMM need to secure technologies to make the masks thinner and the rolling process used during their production, according to UBI Research CEO Choong Hoon Yi.
FMM used in South Korea are wholly imported from Japan. FMM is used to deposit the light emitting material on to the substrate during OLED display panel production. While some South Korean companies are manufacturing them, there technologies are considered far behind to their Japanese counterparts. Yi stressed that these South Korean companies will need overwhelming competence to stand a chance in challenging Japanese companies' dominance in the sector.
In South Korea, companies such as APS Materials, Philoptics and Poongwon Precision are working to develop their own FMM manufacturing technologies. In February, APS Materials and Poongwon Precision have been chosen as the final candidates to lead a national project given by the Ministry of Trade, Industry and Energy to develop South Korea's own FMM manufacturing technology.
Following is the interview between TheElec's JY Han and UBI Research CEO Choong Hoon Yi, which as been edited for clarity and brevity:
Q: What is FMM?
A: FMM stands for fine metal mask. It is a key material used in the production of OLED. FMM [used in South Korea] are all imported from Japan. In OLED production, when the light emitting material is deposited, it is vaporized and passed through the FMM. The light emitting material passes through the small holes on the FMM to be deposited [to the substrate of the panel]. Put simply, FMM is an iron plate with very tiny holes that is used to attach the light emitting materials at precise locations.
Q: The holes must be very small to attach the light emitting material to the pixels?
A: Yes. Pixel-sized holes are required. For example, to make a 4K display, there needs to be holes on the FMM equal to the number of pixels, which is 25 million in the case of a 4K display. But what is more difficult than puching the holes is to make the iron plate thin. If the mask is too thick, the light emitting materials, while passing through the holes, will stick on to the plate.
Q: So that will be a defect?
A: Yes, because the hole will be blocked if the materials are stuck there. That is why, the higher the display resolution becomes, lighter the invar (a composite of nickel and iron that is low in thermal expansion coefficient) needs to be.
Q: When you say invar, do you mean the FMM? How thin do they have to be?
A: FMM is made out of invar. For Samsung’s high resolution displays, they need to be 20 micrometers or thinner.
Q: It seems that the FMM being that thin will make it prone to have problems of its own?
A: Making the FMM thin itself is difficult. Being thin means it is also difficult to attach them to a frame. FMMs are welded to frames [by the display manufacturers] before the deposition process. A lot of defects occur during this process. The FMM’s elongation rate needs to be consistent, as they are pulled from both sides during their production. Or else, the holes will extended as well, which causes misalignment of the holes. Their size may vary too, which is a problem. Also, the vaporized light emitting material causes heat while they are passing through the holes. So the invar need to be resistant to heat well. All of this takes a lot of expertise to overcome.
Q: So manufacturers of FMM will need to take into consideration any modifications to the hole.
A: Yes, they need to consider every variable.
Q: What is the life span of FMM?
A: As invar is an iron plate, basically its life span is unlimited. However, they require consistent cleaning during use. They can be effected by the chemicals used for the cleaning. When this happen, they need to be swapped.
Q: Which companies make FMM well?
A: Japan’s Dai Nippon Printing (DNP) is the best. The second-best is Japan’s Toppan Printing.
Q: What about companies in other countries?
A: There is also a company called Darwin in China.
Q: Doesn’t China prefer is own companies?
A: Nowadays, even if it is a domestic product, if it doesn’t qualify, it won’t be used. This is because a variety of products [from different companies] are put in a [single product] set [made by a customer company]; a single malfunctioning component can cause a claim against the set, which can complicate things for the customer company. Spending in the tech sector is high. So if you are spending billions of dollars, but you accept one or two products just because they are home-made out of the thousand you need, the whole thing may collapse. So China is moving in a direction where it will use the best product, that it needs.
Q: South Korean companies are also developing FMM of their own. There is APS materials, Philoptics and Poongwon Precision. Do you think they will succeed?
A: The important thing for these companies is whether they can enter Samsung Display’s supply chain. Many South Korean companies have tried before. They failed, because their products and skills were unqualified.
Q: It is our understanding that DNP has an exclusive agreement in place with Samsung [to supply it with FMM]. But curiously, doesn’t LG Display use DNP’s products as well?
A: To my knowledge, DNP has agreed to supply its FMM that are 25 micrometers or thinner only to Samsung. A thicker FMM means it will be more prone to defects. Samsung has been using the thinnest FMM available, so it has a very high yield rate. For LG and Chinese companies, procuring suitable FMMs itself is difficult.
Q: How is the yield rate of FMM for their manufacturers?
A: A few years ago, we conducted a 2-year commissioned investigation of the FMM market. Keep in mind, this was a few years back, so things could have changed. But at the time, our investigation found the DNP’s yield rate for FMMs was only around 20%. Toppan’s was around 10%. Remember, the panel makers take these FMMs and attach them to frames, which causes further defects __ so the yield rate is halved again from this.
Q: So only one in ten FMM survives to be used. Is it difficult to manufacture FMM?
A: Yes. Even Samsung can only secure one out of ten to be used. It is that difficult. There is two main ways to make a FMM. There is etching and there is electro forming, which is simply put a form of plating. And the third way is laser patterning.
Q: What ways do FMM companies use?
A: For South Korea companies, APS uses laser patterning. Poongwon Precision uses etching. Philoptics uses electro forming. DNP and Toppan of Japan use etching. When manufacturing an FMM, the thermal expansion coefficient and elongation rate are important. When making the iron plate, a lot of additives are added. The iron plate is pulled during production, to make them thin, and this can cause the additives to burst out to the surface. These causes defects. So ingredient control is a very important know-how for FMM makers. Also, the iron plate are passed through rolls. The plates need to be uniformly spread when they pass through the rolls. During this process, there is pressure on the plate. Unless they can handle the pressure, the iron plate curls. The plates must be spread out evenly. These all require incredible expertise to execute.
Q: It sounds like a sophisticated process.
A: Yes. Only few companies posses the necessary expertise. It is a difficult space for new companies to enter. DNP’s own FMM production is diversified within its own subsidiaries. Their relationship are fixed.
For etching, display and semiconductor companies have great expertise. So South Korean companies can handle etching. But processes prior to etching, such as procuring the necessary raw material such as invar and making them into an iron plate, are very difficult. The rolling process for the plate is also difficult. So companies will need to secure ways to make the iron plate with the right ingredients and roll them properly to succeed in FMM development.
Q: APS Materials’ laser patterning method reportedly takes a long time.
A: Even if the process takes a long time, they will need the material first. The laser patterning notwithstanding, they still need to elongate the iron plate and control its thermal expansion rate. These are more important issues.
Q: Whatever the status of their technology development, it seems they will need to spend a lot to mass produce and supply the FMM as well.
A: They will need a lot of things. They will need inspection equipment and a variety of other equipment. A minimum of 100 billion won (US$88 million) will be needed for production.
Q: To spend 100 billion, they will need the corresponding sales to break even or to be profitable.
A: The bigger problem for the companies will be if they fail to secure customer approval for mass production, after spending that 100 billion won. Samsung and LG need qualified products. 100 billion won is for these potential FMM makers to make a lot of samples to tested [by their potential customers], and for their FMM be applicable for Gen 6 substrate OLED panels.
Q: It is encouraging to see many companies trying to develop FMM, but it seems a tough road lies ahead of them.
A: They will first need to make FMM that can satisfy Samsung. They will also need to somehow breakthrough the exclusive contract between Samsung and DNP. This doesn’t look easy. If Samsung and DNP were to end their exclusive contract, DNP could supply the FMM it only gave to Samsung prior to other companies. Some suppliers have leverage over their customers, in this case in technology.
Q: It seems Samsung and DNP are really partners, not simply customer and supplier.
A: The partnership benefits both companies. So if Samsung were to use FMM from another vendor besides DNP, Samsung will need to offer DNP something in return for such decision. For example, lets say a South Korean company developed its own FMM. They can mass produce them. But Samsung might not accept their FMM. Because Samsung will need to address its relationship with DNP and give something in return to the Japanese company for procuring FMM from elsewhere. Or else, Samsung will lose its monopsony position. So the South Korean companies trying to break into the FMM supply chain need to offer an overwhelmingly superior FMM or incredibly competitively priced FMM. It needs to resolve Samsung’s risk of losing DNP as a supplier. Business is built based on trust between the parties. Other companies barging in to break that trust needs to offer incredible things in return to make it worthwhile to do so.