Lighting to drive LED market growth

Santa Clara, Calif. — LED usage is expected to rise across applications with lighting take the lead with a 20 percent increase over 2010, according to DisplaySearch. Forecasted demand for total LED lighting is expected to reach 3.4 billion units in the third quarter of 2011, up from 3.2 billion units in the second quarter of 2011.

DisplaySearch expects a surplus in LED supply will increase competition and result in “dramatic price drops” in 2011, resulting in higher LED adoption rates in lighting.

The total package revenue for backlight and lighting applications is expected to reach $12.7 billion in 2014, up from $7.2 billion in 2010, according to DisplaySearch’s Quarterly LED Supply/Demand Market Forecast Report. LED lighting penetration is forecast to reach 9.3 percent in 2014, up from 1.4 percent in 2010.

In response, suppliers are expected to increase production capacity over the next few years. Global LED capacity is expected to reach 180 billion units in 2011 and 227 billion units in 2013, according to DisplaySearch.

“While overall LED demand continues to rise, we are seeing demand taper off in LED backlights and begin to trend more in the direction of LED lighting,” stated Leo Liu, senior analyst at DisplaySearch. “Due to high inventories and low sales for LED-backlit LCD TVs in Q4′ 10, Q1′ 11and early Q2’11, LED backlight demand dropped slightly; we expect it to pick up again and reach a maximum level in Q3′ 11 due to seasonal demand.”

According to DisplaySearch’s latest report, LED backlights are used in all small/medium LCDs, and LED backlight penetration in mobile PCs is nearly 100%, while LED backlighting in LCD monitors and LCD TVs continues to grow, although the number of LED packages per set is decreasing.

DisplaySearch forecasts total LED backlight demand at 45.9 billion in 2011. Demand for LED-backlit LCD TVs has dominated the backlight supply since 2010, accounting for nearly 50 percent of the total backlight demand. LED demand from TVs is expected to reach its maximum level in 2012, and slightly drop after 2013 due to a decrease in LEDs per unit.

DisplaySearch forecasts that Taiwan will topple Korea as the top LED supplier country after 2011. The top three suppliers in the second quarter of 2011 based on 500×500 chip size were S-LED, LGIT, and Epistar.