General illumination drives LED growth

El Segundo, Calif. — The 2009 holiday season is paving the way for double-digit sales growth this year for LEDs in general illumination, reports iSuppli Corp. The market researcher expects sales growth to nearly double, reaching $14.3 billion, by 2013. Researchers also see LED backlighting for televisions as a big potential growth market.

“The LED industry is on the threshold of a new expansion phase –a phase that will be characterized by growth rates in the high double digits during the next three years,” said Dr. Jagdish Rebello, director and principal analyst at iSuppli, in a statement. “This growth will be driven by the increased adoption of high brightness (HB) and high flux — also referred to as high power or ultra-high-brightness (UHB) — LEDs into a new range of next-generation lighting applications.”

Global LED revenue will expand by 10.9 percent in 2009 to reach $7.4 billion, up from $6.7 billion in 2008, projects iSuppli. This is in contrast to the overall semiconductor market, which is expected to contract by 12.4 percent in 2009 because of the slowdown in the global economy, said the researcher.

Source: iSuppli Corp.
Source: iSuppli Corp.

In addition to general illumination, the researcher said growth is also being driven by deeper penetration in existing lighting applications including automotive, traffic and street lighting, the backlighting of small LCD displays and keypads in mobile handsets, personal navigation devices, digital picture frames and cameras.

LED backlighting for TVs

Researchers also see the television market driving further growth. The market also is being driven by the emergence of new applications, such as backlighting of large-sized LCDs in televisions, notebooks and computer monitors and personal illumination, said iSuppli.

iSuppli will be releasing an upcoming report, “Solid State Lighting: Backlighting of LCD TVs and General Illumination Drive a Bright Market for LEDs.”

Similarly, Strategy Analytics forecasts that the market for LEDs used in TV backlighting applications will see rapid growth starting in 2010. The researcher’s new report, “Flat-Panel TV LED Backlighting Report 2008-2013“, indicates that the market for packaged LEDs in LCD TV backlights will grow at a compound average growth rate (CAGR) of 148 percent to reach $7.5 billion through 2013.

In 2008, the market penetration of LED-based backlighting in LCD TVs was less than one percent, said Strategy Analytics. Although conservative compared with public statements from some TV companies, Strategy Analytics expects that 68 percent of all LCD TVs will feature LED backlights by 2013.

Strategy Analytics also offers a report, “Flat-Panel TV LED Backlighting Market Players“, covering the three tiers of the LCD TV and LED backlight supply chain.

Despite higher retail prices for LED light bulbs compared with traditional incandescent lamps, customers increasingly are becoming aware of the power savings and long life benefits of solid-state LED lights, said iSuppli.

HB LEDs to take charge

HB LEDs are also expected to outpace growth for standard LEDs.

As an example, iSuppli expects the solid-state lighting market for HB and high-flux devices to outpace overall LED market growth through the year 2013. Through 2013, revenue generated by the traditional market for standard-brightness LEDs will decline by about 2.5 percent, while the market for HB LEDs will grow by 6.7 percent to approximately $5.4 billion, according to iSuppli. The market for high-flux LEDs grew by almost 53 percent to reach $7.8 billion.

The Information Network expects the HB LED market to explode as unit shipments more than double between 2009 and 2012, which in turn will fuel growth for equipment suppliers. The report, “The Solid State Lighting Revolution: Market Analysis And Insight On Reducing Manufacturing Costs,” indicates that LEDs are fueling growth for both conventional suppliers of semiconductor processing tools and MOCVD suppliers.

“The rapid increase in the market for HB LEDs used in various applications such as notebook backlights and automobile headlights is also spurring heavy capital investments by LED makers,” said Dr. Robert Castellano, president of The Information Network, in a statement.

The backlight sectors will exhibit the fastest growth in the HB LED market with an overall CAGR of more than 40 percent, led by the LCD TV sector exhibiting a CAGR of 300.3 percent between 2007 and 2012, according to The Information Network.

Castellano said that based on processing throughout of about 30 million LEDs for each MOCVD tool in 2009, there will be a supply shortage of 15.5 million LED units by 2011 unless MOCVD equipment suppliers increase throughput and yields.

The U.S. Department of Energy’s Solid State Lighting Manufacturing Roadmap targets a factor of two improvement in cost-of-ownership for manufacturing equipment every five years, said Castellano. “If suppliers are successful, enhancements in processing time, uniformity, repeatability, temperature control, and flow geometries will mitigate the supply deficit,” he said.

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