Market getting brighter
In the mid-1990s, Janice DuFour was one of only a handful of employees at Universal Display Corp., a fledgling firm trying to find commercial uses for patents it held on organic light emitting diodes or OLEDs — materials that when electrically charged provide the color and images that show up on smartphone and tablet screens, and on flat-screen TVs.
Back then, most smart consumer devices and flat screens had yet to hit the market. Investors were wary.
Figuring the technology might apply to automotive and architectural glass, Ms. DuFour traveled from UDC in New Jersey to visit Pittsburgh-based PPG.
She didn’t get far with her pitch. Though she knew people at the company from her years in the chemicals industry, “They told me, ‘PPG is very conservative,’” she recalled.
A few years later, the Pittsburgh company came knocking at UDC’s door. The market for smartphones and other products that used OLED displays was exploding.
In 2000, the companies struck a deal for PPG to develop UDC’s technology. In 2013, production began at PPG’s specialty materials plant in Barberton, Ohio, a two-hour drive from its Downtown Pittsburgh headquarters.
The partnership has been so successful supplying top consumer electronics brands such as Samsung and LG that UDC recently invested $15 million to further expand capacity at the plant.
And the market for OLEDs appears to be getting brighter.
The new iPhone X — rolled out last week after months of build-up — is the first Apple phone to use an OLED display. Samsung, which purchases and licenses organic light emitting diodes technology from UDC, supplies the OLED displays for Apple.
Device makers like Apple and Samsung and their customers are clamoring for organic light emitting diodes because compared with standard liquid crystal displays, OLEDs produce more vibrant colors with more contrast and use less energy. They also are lighter and thinner because they don’t require a backlight.
The market for OLED displays, estimated at about $16 billion annually, is projected to reach $57 billion by 2026, according to research firm IDTechEx.
Those projections are helping fuel growth at UDC, which last week raised its guidance for full-year 2017 based on strong third-quarter results and growing demand for devices that use OLEDs. It expects sales to reach between $310 million and $320 million this year — an increase of 55 percent to 60 percent.
Besides smartphones and TVs, the OLED market is being driven by development of displays for virtual reality headsets, automobile lighting and future gadgets that would require displays that are bendable and flexible, said Steve Abramson, UDC’s president and chief executive.
Among them: a foldable smartphone Samsung plans to unveil next year.
“Wouldn’t it be great if you could just roll off a display and tuck it in your pocket?” Mr. Abramson told analysts during UDC’s third-quarter earnings call last week.
A shift from Transitions
Consumers had been using light bulbs for barely two decades when John Pitcairn, a co-founder of PPG, launched Columbia Chemical Co. in Barberton.
Its facility built in 1900 was called “Old Sody Ash” because it supplied PPG, then known as Pittsburgh Plate Glass, with the synthetic soda ash used to make glass windows, windshields and containers.
PPG bought the facility in 1920 and the product line eventually expanded to chlorine, calcium chloride and sodium bicarbonate, commonly known as baking soda.
At its peak, employment was 2,300.
Now, inside a red brick former warehouse that straddles railroad tracks and is one of the oldest buildings on the campus, OLEDs are manufactured in brightly lit production cells.
In temperature-controlled clean rooms, workers clad in gloves and other protective clothing mix and filter ingredients into the colorful powders that — when placed in a display — will emit light when a current passes through.
PPG and UDC are so guarded about the technology that during a tour last week, photos were not permitted and employees declined to discuss the the raw materials used to produce organic light emitting diodes.
When it began developing the materials for UDC, PPG leveraged coatings technology it was using for materials used in Transitions eyewear, said Michael McGarry, PPG’s chairman and chief executive. “It suited their need for fast development,” he said.
PPG sold its share of the Transitions venture in 2014, but still makes products for the brand. “We went to PPG to be a developer because they were really good with chemistry,” said Mr. Abramson.
Since its founding in 1994, his company has spent more than $500 million in research and development for OLED applications. It took 17 years to turn an annual profit and paid its first shareholder dividend earlier this year.
PPG, which makes paint brands including Glidden and Olympic, over the past two decades divested its oldline glass and chemicals operations as part of a strategy to become a global coatings giant. Coatings now account for 100 percent of its sales.
Next stop: Monroeville
After the colorful OLED powders are packaged in Barberton, the product is shipped in armored trucks to a PPG facility in Monroeville, where the material is scaled for high-volume production. Then it is sent to UDC in New Jersey for final quality control and shipped to customers who make OLED panels.
The production is a unit of PPG’s specialty coatings and materials business, which also makes silicas used in rubber products, and synthetic paper used for loyalty cards and labels. Specialty coatings and materials are part of PPG’s industrial coatings segment, which generated 40 percent of last year’s $14 billion in annual revenues.
With its expanded capacity at Barberton, PPG will add 20 employees for a total 180. The jobs will include chemical operators, instrument and lab technicians, engineers, chemists, supply chain planners and production supervisors.
Ms. DuFour said it was “total serendipity” that brought UDC to PPG.
“We were a small, entrepreneurial, flexible, movequickly, never-say-no business,” she said. Though PPG is a long-established Fortune 500 corporation, the two have “fabulous chemistry,” she said.
Customers like Samsung “would love us to be located near them” in Asia, said Ms. DuFour. “But our technology is so proprietary, we want it in a secure place.”