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LED market: Looking good

Photonics Spectra
Apr 2010
Anne L. Fischer, Contributing Editor,

High-brightness LEDs are everywhere. From general lighting to outdoor displays and signage, notebook and television displays, automotive applications and industrial lighting, it’s no wonder that the market for them is booming.

According to the 178-page Quarterly GaN LED Supply Report released in January by IMS Research of Austin, Texas, demand is likely to grow by 61 percent this year, creating a supply shortage that will not abate until 2013. The report forecasts major growth areas, including display backlights in TVs, notebooks and lighting.

Barry Young, report author, IMS Research senior consultant and founder/managing director of the OLED Association, said, “We’re seeing conversion much faster than anyone had anticipated of LCD TVs that used cold cathode fluorescent [CCFL]) backlighting to those that use LEDs.” It is this conversion that is driving demand, Young stated.

The report outlines the number of LED dies produced on a quarterly basis, listed by manufacturer. Also included are revenue projections from die makers, a demand forecast, a supply-and-demand forecast and analysis, and a listing of metallorganic chemical vapor deposition (MOCVD) equipment manufacturers. (For more on MOCVD manufacturing, see “MOCVD Systems Meet LED Backlight Demand,” page 40, March issue.)

The shortage of 12 billion to 14 billion binned die is projected to continue into 2013. This will stimulate the MOCVD reactor market, which has a projected demand for nearly 600 reactors this year.

On the revenue side, major manufacturers such as Nichia Corp. of Tokushima, Japan, hold a leadership in white LEDs and a 42 percent share of that market. Durham, N.C.-based Cree Inc.’s specialty is general lighting, and its share could grow from 10.6 percent in 2009 to “between 15 and 18 percent,” Young said. “We can estimate this because we know Cree will increase capacity two to three times in the next year.”

Nichia is the biggest supplier and controls more than 40 percent in terms of revenue, he said. Epistar Corp. of Hsinchu, Taiwan, which was No. 2, traded places with Samsung LED Co. of Suwon, South Korea, formerly No. 3, because of Samsung’s strong role in the TV market.

Regional LED production also is listed, with Taiwan at the top, and Japan, Korea, the US, Europe and China holding the next spots, respectively. Although it seems surprising that the US and Europe produce more than China, Young said the reason is that China has more capacity but that production is less efficient. “The yields are significantly lower,” he added.

The forecasted LED supply shortage spells opportunity for new manufacturers and toolmakers. What we also are beginning to see, Young noted, is that LCD manufacturers such as Samsung, LG, Sharp and others will become more self-sufficient and will buy less from other suppliers. “They’ll have notable second sources but will rely on their own production facilities,” he said, adding that the lighting market will begin to mature.

“I would think that, after this sort of change in control in terms of who builds what, we’d start to see a lot more attention given to lighting, and that that area will try to grow.” He said it is possible that the market “may exceed our forecasts, supply might be greater, and the excess demand might be met in a different way.”

A term used to describe a convex surface having too short a radius of curvature. To correct this condition, material is cut from the outer portion of the polishing tool.
automotive applicationsbacklightsBarry YoungCCFLcold cathode fluorescentConsumerCreeDisplaysEpistargeneral lightingGreenLighthigh-brightness LEDIMS Researchindustrialindustrial lightingLED marketLED TVLGlight sourcesMOCVDNichianotebook displaysOLED AssociationOLEDsoutdoor displaysQuarterly GaN LED Supply ReportSamsung LEDSharptelevision displaysLEDs

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