The market for high-brightness LEDs already exceeds $1 billion, and it will continue to grow at an impressive rate as prices fall and performance improves. These were the themes of the recent Strategies In Light conference in San Francisco, writes Tim Whitaker.

High-brightness LEDs are finding an increasing range of uses LCD backlights for cellular handsets, traffic signals, displays, automotive applications, signage and illumination, to name a few. Speakers at the Strategies in Light conference, held on 89 February in San Francisco, discussed these market segments and the demands they place on LEDs. Representatives of the major device manufacturers were also there, making for an interesting panel session that brought Nichia, Toyoda Gosei and Cree together in a rare out-of-court meeting. Breaking the $1 billion barrier Opening the conference, Bob Steele of Strategies Unlimited revealed that the market for high-brightness (HB) LEDs exceeded $1 billion in 2000. Sales grew 41% since 1999, reaching $1.2 billion (see ); the market grew by an astonishing 58% annually over the previous five years. Growth will continue in the next five years, but at the less spectacular rate of 22%. Steele predicts that the HB-LED market will be worth $3.25 billion in 2005. At $1.7 billion in 2000, sales of conventional-brightness LEDs still exceed HB-LEDs, but the conventional market is growing much more slowly. According to Steele, "high brightness" is determined by the quantity and efficiency of light output: HB-LEDs usually have luminous intensities of hundreds of millicandela (mcd) for standard 5 m lamps, although this value is lower for surface-mount devices where the viewing angle is larger. The various materials used for HB-LEDs are AlGaAs (red), AlInGaP (yellow-green to red) and InGaN (blue, green and white), although many AlGaAs and AlInGaP LEDs do not fall into the high-brightness category. Conventional LEDs include GaAsP (yellow to red) and GaP (green to red) devices. Steele split the market by application as shown in , and gave further information on the segments as follows. Signs The total sign market for HB-LEDs (both single and full color) approximated $380 million last year. The market for HB-LEDs in full-color signs grew 30% to reach $180 million. Most of these are outdoor signs, the largest segment being sports stadia. Traffic signals More than 8% of conventional traffic signals in the US have now been replaced with LEDs. More than 350 000 replacements were made in 2000, and almost half of these were for green lights: in 1999, a very small fraction of LED signals were green due to the high cost of green LEDs. The traffic signal market was worth $36 million in 2000. Automotive applications This market totaled $260 million. It includes exterior lighting for automobiles, such as center high-mounted stop lights (CHMSLs) and turn signals (see ); truck and bus exterior lighting; and interior lighting like map lights and instrument panels. This last market now exceeds $180 million. Brake lights The market for HB-LEDs in CHMSLs had a value of more than $60 million in 2000, while the cost of each fixture has fallen from $50 in 1989 to around $7. Approximately one-third of all new cars and light trucks (including SUVs) feature LED-based CHMSLs, and penetration in Europe is close to 70%. Mobile handsets Single-color LED backlights for monochrome displays in mobile handsets, and white backlights for full-color displays, have become a major market for HB-LEDs, especially in Asia. Steele estimated that more than 25 million handsets with full-color displays were produced in Japan in 2000. Illumination LEDs These have not penetrated the illumination market to any significant degree, although there are several near-term applications including decorative, architectural and retail display lighting, flashlight bulbs and machine vision. In conclusion, Steele pointed out that HB-LEDs will enjoy a multi-billion dollar market without significant penetration of the illumination segment, although that is a desirable long-term goal. The performance of devices is improving, prices are falling, existing applications are growing rapidly and new ones are emerging. Although new suppliers are entering the market, barriers are high due to technological and legal (patent) issues. LEDs replace neon signs The electric sign industry, valued at $5.4 billion in 1999, is dominated by fluorescent (48%) and neon (41%) technologies. The latter category has the highest potential for replacement by LEDs according to Jim Sloan, whose company Sloan LED is a supplier of LED lighting systems for signage applications. LEDs have a number of advantages over neon including low voltage operation, absence of start problems in cold temperatures, ruggedness and long life. Around 64% of neon signs are channel letters (see a): these are standalone letters mounted on the outside of retail establishments and suchlike. The second-largest category, says Sloan, is perimeter or border accent lighting (see b), used both internally and externally. Sloan mentioned several problems with using LEDs in signs. One is heat temperatures inside sign cabinets can exceed 75 C, so it is important to keep the temperature of the LED junction below its maximum rating. Outdoor signs must also be weather resistant, and it is necessary to match the LED color to the lens color (which can be proprietary in the case of large businesses). Furthermore the neon-sign industry is put off by the high initial cost of LEDs, the fact that many sign-makers have invested in their own neon shops, and the number of different designs put forward by LED manufacturers. Traffic signals The California Department of Transportation (CalTrans) has already installed 50 000 traffic-signal modules, specifically red stoplights and pedestrian "hand" signals. According to CalTrans Gonzalo Gomez, the goal is reduced energy consumption: exchanging a 155 W lamp for a 10 W LED module uses 6065% less energy for a red signal, and 8590% less if all colors are replaced. The program has already resulted in a load reduction on the power grid of 4 MW, equaling $2.5 million in energy savings. Another 160 000 modules will be installed by June. When asked to comment on reliability, Gomez stated that there have been a few failures, although many fewer than when using incandescent lamps. Fortunately the manufacturers provide a warranty to cover failed LEDs, except (quite understandably) when the failure is due to someone shooting out the signal. Regarding cost, Gomez stated that the price of a red module has fallen from $180 three years ago to around $65. Truck lighting According to Brad Van Riper, the vice-president of R&D at Truck-Lite, lighting failures are the most frequent maintenance problem experienced by truck fleets. Despite their high cost, LEDs are very well suited for use in signaling and marking devices on trucks since they are highly resistant to shock and vibration, draw very low currents, have long lifetimes and a rapid illumination rate. Van Riper also pointed out that it can take 2030 minutes to troubleshoot and repair a failed light on a truck, resulting in a cost of $5060. The cost to replace standard lights with LEDs (around $150) can be recovered over the life of the vehicle. Interior automotive John Roberts of Gentex described his company s binary complementary white (BCW) approach to LED lighting, which combines the output from amber AlInGaP and blue-green InGaN LEDs (for more details, see Compound Semiconductor March 2000, p43). In 2001, Gentex will supply an estimated 300 000 BCW pods to General Motors, Ford, DaimlerChrysler and others. Gentex adopted the BCW approach in 1998 largely because phosphor-converted (PC) white LEDs were not available at that time. However, the BCW technology also has the potential to offer high luminous efficacy because it relies primarily on AlInGaP LEDs, providing cost and performance advantages. Also the output color of the lighting fixture can be controlled and adjusted electronically, rather than being fixed earlier in the manufacturing cycle as is the case with PC LEDs. Displays Most professional sports teams in the US have or soon will have large-format outdoor LED video displays, says Tony Van de Ven, CEO of LED display manufacturer Lighthouse Technologies. There is also a rapidly growing market for indoor applications following the introduction of displays with a pixel size of 10 mm previously the resolution was too coarse for indoor use. The displays manufactured by Lighthouse contain pixels consisting of three LED chips (red, green and blue) in a surface-mount package; these are combined in 16 16 modules with drivers on the back surface and integrated heat sinks. The modules are combined into panels, several of which make up the display. Van de Ven explained that while Lighthouse is a heavy user of LEDs, consuming around 1.5 million chips per week, the company does not experience constraints on its chip supply. He also noted that the price of blue and green LEDs at the high-performance end of the market has hardly reduced, although the price of AlInGaP chips has fallen, largely due to the growth in capacity in Taiwan. Chip-cost accounts for almost half of the total cost of Lighthouse s displays. Other issues facing the market include the need to improve LED efficiency in order to reduce the heat that must be removed from the display. Also, said Van de Ven, brightness and color control need to be improved; blue and green InGaN-based LEDs typically have a variation in wavelength of 7 nm, so every pixel must be actively controlled to ensure a consistent output. Trends for the LED video display industry include higher brightness, higher resolution (Lighthouse recently introduced a 5 mm product) and, of course, lower cost. The 10 mm display costs around $3 per pixel, or $30 000/m2. Lighting Although general illumination offers a huge potential market, current niche lighting applications are developing fast. Several examples were shown by Katharina Keller of Zumbotel Staff, a European manufacturer of luminaires (a luminaire is a complete lighting system). Keller showed indoor and outdoor lights for orientation and guidance, as well as architectural feature lighting. According to Leonard Hordyk and Brent York of optoelectronic lighting manufacturer TIR Systems, the lighting industry is rapidly adopting LEDs. However, both the lighting and the LED industries need to find common ground and standards. Of equal importance is the convergence of many technologies to make lighting units optics, power conversion, drive and control electronics and housings, as well as the LEDs themselves. The Department of Energy-sponsored program for solid-state lighting was discussed by Steve Johnson of Lawrence Livermore National Lab (for an overview see Compound Semiconductor February 2001, p50). A similar program The 21st Century Lighting Project is running in Japan and was discussed by Tsunemasa Taguchi. A performance target for white LEDs of 120 lm/W has been set for 2010. Taguchi described a prototype streetlight using white LEDs, which consists of 700 LEDs in a case measuring 28 13 cm2. The brightness of the unit is normally 80 lux, but it can sense a person s approach and increase its brightness to 660 lux for a power consumption of 56 W. The LED lamp is 46 times brighter than an incandescent bulb with the same power consumption, although it does cost around 1 million ($8500). However, the unit uses solar cells to store power in batteries, allowing it to operate without an external power supply. So are LEDs suitable for general illumination? Not yet, reports Nadarajah Narendran of the Lighting Research Center (LRC). LEDs suffer from a high initial cost compared with traditional lighting sources and only a small number of lumens are available from conventional packages. Furthermore Narendran s studies indicate that reliability is not as good as publicized, and there is significant lumen depreciation white LEDs exhibited lifetimes (defined as the time taken for the relative light output to halve) of less than 10,000 hours (see ). Tales from Taiwan An overview of Taiwan s booming LED industry was given by B J Lee, the president of Epistar a supplier of chips and epiwafers. Lee stated that Taiwanese companies have roughly one-third of the overall market for LED lamps by volume, and a 21% share by revenue. AlGaInP and InGaN LEDs are growing the fastest: Lee believes that between 1999 and 2000 the worldwide AlGaInP market grew 60%, from 250 million lamps to 400 million. The smaller InGaN market grew even faster, increasing by 140% to reach 120 million lamps in 2000. "Taiwan is the center of gravity of the world s AlInGaP market," claimed Lee. Indeed, the huge manufacturing capacity installed in the country in recent years has had a significant impact on prices (see ). The annual growth rate of the AlGaInP industry exceeds 50%, and Taiwan now produces more than 60% by volume of the world s AlGaInP chips. The country also dominates chip production for GaP, GaAsP and AlGaAs devices. Lee estimates that the Taiwanese LED industry is composed of 27 lamp manufacturers, 10 chip-makers and 15 epiwafer suppliers. There are around 90 MOVPE reactors in Taiwan, and the number could exceed 120 by the end of 2001. There are probably around 10 growth systems in mainland China, with one or two operational now. Japan dominates the merchant epiwafer market for GaP, GaAsP and AlGaAs LEDs, while Taiwan has roughly 70% of the merchant market for AlInGaP and InGaN epiwafers. Of course, most InGaN epitaxy is carried out for internal use by giant producers such as Cree and Nichia. Although about one-third of epi systems in Taiwan are for InGaN growth, most are currently used for research rather than manufacturing. Markets are Asian countries other than Japan (to avoid patent issues). Lee said, somewhat ominously, that "Taiwan will soon be ready for InGaN epiwafer and chip production." Another feature of the Taiwanese industry is that production is starting to move to mainland China, from local investment or through the movement of companies from Taiwan or Hong Kong. Suppliers line up A session entitled "Supplier Perspectives" brought together six leading makers of LEDs: Nichia, Toyoda Gosei, Cree, Osram Opto Semiconductors, LumiLeds Lighting and GELcore. Mike Holt, CEO of LumiLeds Lighting, explained that while general illumination applications for white LEDs are 1015 years away, there are a number of areas where LEDs will become the dominant technology. Examples include LCD backlights, dental curing tools and automotive daytime running lights. However, the current 5 mm LED form factor is not sufficient to enable these applications; LumiLeds has focused on devices that offer a light density that is ten to thirty times higher than conventional devices, in roughly the same footprint. More details can be found on page 11 of this issue. Noboru Tazaki described Nichia s recently completed manufacturing facility; the building has 35 000 m2 of space and is about three-and-a-half times larger than the older fab. Koichi Ohta of Toyoda Gosei stated that his company s LED sales will exceed 20 billion ($174 million) in the fiscal year ending March 2001, up from 14.8 billion ($129 million) in the financial year ending 1999. The relative fortunes of Nichia and Toyoda Gosei were discussed by Chris Redl of UBS Warburg, as described on page 67 of this issue. Capacity counts Chuck Swoboda explained that his company Cree, like its competitors, has added a huge amount of capacity in the last 12 months, meaning this is no longer a constraint. "Additional capacity and competition will drive price reductions," he said. "Lower prices and higher performance will continue to drive volume growth from both new applications and the further penetration of existing applications." Furthermore price points are moving rapidly: while existing manufacturers can handle these changes, it will become increasingly difficult for new players to enter the market. Ruediger Mueller, the president and CEO of Osram Opto Semiconductors, described his company s philosophy as summarized by the phrase, "Don t waste photons." An example of the results of this attitude is the ATON chip, an InGaN-based device in which the SiC substrate is shaped so as to improve light extraction (see Compound Semiconductor February 2001, p7). In Mueller s view, a major emerging market for LEDs is visualization the use of LEDs in displays. Full-color indoor and outdoor displays are now available from manufacturers, while LEDs and lasers are both potential light sources for digital projection displays. AXT is a relative newcomer to the LED scene, but already has a potential monthly capacity of 2025 million chips. Morris Young, AXT s CEO, described a huge latent demand for LEDs that could be accessed with lower prices. "Customers have told us that a 30% reduction in price for InGaN-based LEDs could lead to a 5060% increase in demand," he reported. And the overriding message from Strategies In Light was that the future market for high-brightness LEDs will prove to be very valuable, provided the device manufacturers can meet the challenges presented by each of the different market segments. The Strategies in Light conference is organized by Strategies Unlimited, a market research company based in Mountain View, CA. Next year the event will be held on 78 February. The future market for high-brightness LEDs will prove to be very valuable, provided device manufacturers meet the challenges presented by each of the different market segments.