Memorandum 128
Submission by UK Displays and Lighting
KTN
EXECUTIVE SUMMARY
The UK is recognised as a global leader in Plastic
Electronics. This leadership spans the development of innovative
materials, low cost deposition, high precision patterning and
additive printing processes. This impressive range of activities
across the supply chain underpins the UK activity in Plastic Electronics
and it is vital to maintain and build upon this position as the
industry moves forward.
The UK Displays & Lighting Knowledge Transfer
Network (UKDL) is 100% funded under the Technology Programme and
currently has more than 750 profiled Members from more than 500
UK Companies and 85 University Departments. Of the 750 Members,
more than 650 have registered that they are currently active in,
or are likely to become active in, Plastic Electronics.
Third party market predictions vary but it is
generally agreed between them and the Plastic Electronics Community
that Plastic Electronics will become a £10-50 Billion global
industry by 2020.
1. Current and Future Roles of Engineers in
the Field of Plastic Electronics
1.1. The UK has significant engineering
expertise in market applications in materials development, low
cost deposition, high-speed precision patterning and additive
printing processes. This is complemented by a number of highly
developed and successful device design companies employing skilled
electronic engineers. This skilled engineering resource is currently
pushing forward key technology enablers in plastic electronics
by developing the materials, manufacturing equipments and processes
required by the industry.
1.2. Plastic Electronics (also known as
Organic Electronics and Printed Electronics) is a young industry
with very few players with >20 years industrial or business
experience. There is a shortage of senior management team skills
for companies looking to implement high-volume production (including
buyers, QA, production, maintenance, operations). Following the
reduction of the defence industry in the `90's and the move offshore
of consumer electronics manufacturing, the UK's conventional electronics
industry has contracted and fragmented into a mainly SME structure.
There is certainly no lack of skilled chemists/material scientists/printing
engineers but full exploitation requires the introduction of industrial
personnel and processes from other industries (eg food packaging,
pharmaceuticals, graphics printing) to address remaining difficulties
such as encapsulation and volume substrate processing.
1.3. As the industry progresses towards
volume production, engineers will be required to develop processes
to ensure that manufacturing is robust, reliable and repeatable.
Solving issues of accuracy and registration where multiple thin
layers of material are deposited on top of each other on flexible
substrates will be key to ensure high yields and optimal production
rates. New methods of on-the-fly measurement and diagnostics will
have to be developed and applied.
1.4. The UK has a very active KTN (UKDL)
with clear vision based on Members input of the technical and
commercial hurdles to be overcome. Training of engineers is a
key element of the KTNs activities. Gaps in the skills base must
be addressed early on in order to ensure a fully trained workforce.
An example of this is the requirement to train printing engineers
in electronics and materials science and conversely training electronics
engineers in the limitations and opportunities offered by printing
technologies.
2. Potential for Plastic Electronics in the
UK/Global Economy
2.1. The implementation of Plastic Electronics
manufacturing in the UK will have positive Societal impact and
will enable new market creation.
2.2. Job creation-Plastic Electronic devices
can be manufactured by companies already active within the printing
industry. This will result in job sustainability and expansion,
as today's products become enhanced with the added value contribution
that Plastic Electronics brings. In addition, the cost of entry
to manufacturing for new companies wanting to manufacture Plastic
Electronic devices is significantly lower than for comparable
conventional electronic devices. This will encourage more companies
to be established as the range of product opportunities develops.
2.3. Waste reduction-the production of waste
during the manufacturing process of Plastic Electronic devices
is significantly reduced by using ultra-thin layers of materials
and innovative patterning and additive printing techniques.
2.4. Environmentally friendly-new biodegradable
substrates and functional materials are being developed to create
consumer electronic and medical Plastic Electronic devices that
will fully decompose after being discarded.
2.5. Energy Reduction (1)-Plastic Electronic
devices need less energy to be used in their manufacture as all
stages of assembly use low-temperature processes.
2.6. Energy reduction (2)-Plastic Electronics
technology allows multiple functions to be assembled on a common
substrate. Photovoltaic cells can be integrated with power storage,
electrical circuitry, sensor and display elements to create "self
powered" devices that are "energy neutral" and
require no connection to mains power. This off-grid functionality
will reduce the national demand for energy generation and distribution.
2.7. Intelligent Medical Devices-disposable
printed medical sensors for use by GP's and/or the general public
will be commonly available at low cost. Flexible patches are being
developed, based on organic light emitting diodes for localised
Photodynamic Therapy for the cure of certain skin cancers.
2.8. Intelligent Food packaging-printed
sensors embedded within food packaging will allow the consumer
to ascertain if the food or liquid is "off" irrespective
of the sell by date. More sophisticated devices will allow information
on the product history in terms of temperature and time during
storage and transport to be displayed to the consumer.
2.9. Electronic wallpaper-large area printed
electronics can be used to augment conventional advertising posters
and displays with an animated electronic cartoon. Designers can
employ these flexible panels to invoke novel lighting scenarios
to enhance buildings and public spaces.
The list above highlights the breadth of applications
made available by Plastic Electronics; this is by no means an
exhaustive list but is indicative of the UK/global potential.
3. How are Universities, Industry, Venture
Capital and Government involved in the Development of the UK Plastic
Electronics Sector?
3.1. The UK Government, through the DTI
and latterly the TSB, has acknowledged the strategic importance
of Plastic Electronics with regular investment in basic and applied
research. Since April 2004 Technology Programme funding into Plastic
Electronics and related topic areas amounts to £48 million.
This has been matched and exceeded by industry. Private equity
investment into UK companies active in Plastic Electronics exceeds
£140 million over the last five years. The largest-ever single
VC investment ($100 million) in Europe was made to finance the
world's first large-scale manufacturing facility being built by
Plastic Logic (UK) in Dresden. Government funding is also available
for prototypes and proof of principle projects, but a significantly
stronger mechanism is required to fund pilot production lines.
3.2. A small number of RDA, DA and Research
Council funded Centres of Expertise focused on Plastic Electronics
have formed around the UK and are rapidly developing their capabilities.
Examples include Cambridge (CIKC), Manchester (OMIC), London (IC,
QMU, Brunel), Swansea (WCPC) and the North East (PETeC, CPI).
Each of these Centres is attracting a number of SME and start-up
companies to locate within the vicinity. This "cluster"
model allows for progression throughout the entire value chain
from the development of new materials to device integration, prototyping
and on to low volume production. These skills centres act as an
important catalyst for new SME companies who wish to be involved
in the Plastic Electronics industry.
3.3. Following the reduction in defence
spending and the moving of much of the UK's consumer electronics
manufacturing offshore, the UK's Electronics sector lost most
of its OEM companies and fragmented into a sector driven mostly
by SMEs. Driven mainly by UKDL and the Collaborative R+D programme
many of these SMEs are now forming collaborative partnerships.
It is widely recognised by the Plastic Electronics community that
the industry will not progress unless skills and resources are
pooled. There is some involvement with larger companies and this
will develop further over the next 1-2 years as global leaders
begin to see the value in investing in the industry.
3.4. There is a continuous need for high
quality research into topics such as material processing and device
reliability. These topics are often perceived as mundane and do
not generally benefit a University's RAE rating, so are often
ignored. Urgent public funding of QA/reliability research activities
is required in order to strengthen the knowledge and resource
base to match that of our major competitors in Japan and Korea.
3.5. Academic Members of UKDL have commented
that with few exceptions, they seldom get to perform research
work on state of the art materials and devices, or to use the
latest metrology equipment. They are concerned that their research
activities can go largely unnoticed by industry, which may not
readily interpolate the improvements that would be seen if the
work was based on the best available materials/equipments. There
is a need to encourage more "open relationships" between
emerging technology Companies and Universities in order to address
this issue. Public funding is also required for developing adequate
analysis tools, instrumentation and data analysis equipments to
strengthen resources at this critical primary research level.
3.6. As Plastic Electronics moves towards
commercial exploitation it will become necessary to develop greater
involvement in KTN activities from Commercial Managers and Directors
of potential Suppliers, Integrators and End Users to encourage
wider commercial comprehension of the opportunities offered by
Plastic Electronics.
4. Are the UK Engineering and Manufacturing
Sectors Set Up for Growth in Plastic Electronics?
4.1. The UK has a strong heritage in manufacturing
across a broad range of application areas, and still maintains
a very strong global position in industries such as Pharmaceuticals,
Oil, Printing, Life Sciences, etc. To fully exploit Plastic Electronics
it is vital to engage these key stakeholders to attract funding
to and from them in order to encourage their engagement with the
diversification and added-value product enhancement opportunities
offered by Plastic Electronics. The skills and experience available
in existing industries may be suitable to rapidly address many
of the "move to production" issues faced by the current
Plastic Electronic community.
4.2. It is certainly possible to use the
existing skills base (eg from Bio/Pharmaceuticals industries)
where there is an existing infrastructure for big business (>£100
million turnover, >100 employees). This will require provision
of training and/or retraining for these engineers and managers
in the new disciplines required within Plastic Electronics.
4.3. There is currently insufficient industrial
investment at UK Companies to develop the indigenous industry
at a rate that allows the UK to become world leading in production
rather than just research. For example, Bayer GmbH has analysed
the market success of Elumin8 (a very small UK SME) in creating
innovative printed posters that combine colour graphics with electronic
cartoon circuitry as an overlay. Bayer has identified this to
be a significant market opportunity and has invested €26
million to build and equip a 5k m2 clean room as a strategic move
to "dominate the printed Electroluminescent display market".
UK SMEs will be under great threat from such well-financed competition
seeking to walk in and exploit their innovative groundwork. This
places a greater emphasis on the creation and protection of IP
to preserve the integrity of UK ideas, but it also indicates a
need for Government to motivate UK Industry to seek to exploit
these opportunities directly.
4.4. There is an incorrect perception within
the UK (and journalists in particular) that the UK is no longer
a Manufacturing country. It was noted that the UK is actually
the 6th largest worldwide manufacturer by value, yet a recent
survey of Journalists indicated they thought UK would be around
31st. The Technology Strategy Board, UKDL (and Government) need
to make greater representation and implement wider promotional
activities to change the public mindset and perception about the
UK as a Manufacturing base and not just a service industry culture.
4.5. When early stage Plastic Electronic
companies move to initial production there is a tendency to move
out of the UK because of the extensive cash incentives currently
on offer from EU countries in Eastern Europe. It is further noted
that when moving into sustained profitability, such Companies
can benefit from a move of their manufacturing base to the Far
East where they are offered significant tax incentives (eg 15
years tax free in Singapore). A change to the Company Tax regime
in Europe in order to match that of the Far East and develop a
level playing field is required in the longer term. Since global
multi-national Companies already minimize tax payments as a matter
of standard practice for their operations within the UK, the impact
to Treasury would probably not be that great. In the short-term,
the role of the Centres of Excellence should be expanded to allow
them to engage with pilot production volumes of Plastic Electronic
devices. This will considerably delay the timing in which a start-up
company must plan its next move to production, and will also significantly
reduce its initial capital equipment expenditure requirements-a
strong incentive for supporting start-up and spin-out companies
during turbulent financial times.
4.6. It is also recommended to establish
a Government-supported production facility that can act as a volume
fabrication facility for a number of UK Plastic Electronic companies.
By allowing such companies to operate a "fabless" production
model within the UK, reaping the benefits of innovation exploitation
will be greatly enhanced, and the cost for new entrepreneurs to
enter the market will be reduced. De-risking this early stage
exploitation will greatly increase the rate at which Plastic Electronics
concepts and designs are created and delivered to the wider market
place.
4.7. It is noted by UKDL Members who have
created early stage production facilities within other EU countries
that the UK has excessive inertia in its planning laws and permits
to operate. For example, securing permission to establish wet
chemistry facilities near residential areas, or when a company
wants to build a bespoke manufacturing facility, securing legal
permissions in the UK may cause slippage in the opportunity to
meet the preferred market window. This must be addressed by improving
the Local Planning system to facilitate more "high-tech business
friendly" support mechanisms.
5. Further Recommendations
5.1. To ensure that the UK remains at the
leading edge of the Plastic Electronics revolution it is vital
that there is full engagement and continuity of support from Government
through the Technology Strategy Board, the Research Councils and
SBRI.
5.2. The Members of UKDL particularly request
the implementation of the 2006 DTI report into Plastic Electronics
that recommended a Managed Programme to invest £50 million
ring-fenced CRD finance over a three to five year period into
the Plastic Electronics community. This Managed Programme should
be jointly run by TSB and the Plastic Electronics community, and
should be empowered to run competitions to address technology
hurdles that the Community itself identifies. It should also be
empowered to support "single company" developments where
such activities are too early for general collaborative activities
within the community, but which, if successful, would result in
materials, equipments or device architectures that would be of
broad interest and potential usage within the UK's Plastic Electronics
community.
5.3. The Members of UKDL recommend that
the Government should sponsor programmes to produce a variety
of flagship demonstrators. Since these specific products may themselves
be of limited commercial appeal, but would be used to address
the "top ten" problems identified by the community,
or would be demonstrations of a technological capability rather
than an exact market need, the projects should be supported with
50% funding or more.
5.4. Examples of flagship projects might
include:
- Wireless flexible Electronic Paper devices
for every Cabinet Minister (or every MP)
- Electronic Paper devices for use at the
2012 Olympics.
- Battery-free energy-neutral consumer electronic
devices to control domestic AV units.
- Intelligent, disposable, printed medical
sensors for general use within the healthcare environment.
- Electronic books for use within schools
to reduce/eliminate the need for individual issue of textbooks.
- Electronic wallpaper to demonstrate the
use of alternative lighting concepts.
AUTHORS OF
THIS REPORT
This report was prepared by Dr Ric Allott, Deputy
Director of the UK Displays & Lighting KTN, based on written
and oral inputs from the FLEXYNET sub-group committee of the UKDL
KTN, and individual members of the Plastic Electronics community
around the UK. The report was approved by Chris Williams, Director
of the UK Displays & Lighting KTN.
The report is submitted on behalf of the Members
of UKDL.
March 2008
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