Technical Insight
Mobile applications prompt strong growth in LED market
The high-brightness LED market was the star performer of the compound semiconductor industry in 2002. Tim Whitaker reports from the annual Strategies in Light conference.
While other segments of the compound semiconductor industry continued to struggle in 2002, the high-brightness (HB) LED market enjoyed a bumper year. After experiencing zero net growth in 2001 (a good performance relative to the markets for fiber-optic components and GaAs ICs), the HB-LED market grew by 50% in 2002, reaching $1.8 billion.
These outstanding figures were presented by Strategies Unlimited s Bob Steele at February s Strategies in Light conference. According to Steele s estimates, mobile appliances made up the largest market segment in 2002 with a 40% share of the total, followed by signs (23%), automotive (18%), illumination (5%), signals (2%) and other (12%).
Steele predicted steady growth in the HB-LED market of around 20% per year for the next five years, assuming that normal growth takes place in the general economy (figure 1). Continued recession and/or the impact of war with Iraq could reduce capital spending on trucks and large video screens; consumer spending on cars and mobile appliances; and government spending on highway signs and traffic signals, for example. Steele predicted that the HB-LED market will reach $4.4 billion by 2007. Mobile appliances will continue to be the largest segment with a value of around $2 billion, while the illumination market will grow to around $500 million.
In terms of materials, the market continues to be dominated by InGaN-based devices. Spurred by the use of blue, green and white LEDs in mobile handsets, InGaN LED shipments grew by 72% in 2002, reaching a value of $1.22 billion. This exceeds the value of the entire HB-LED market in 2001. While InGaN devices accounted for 68% of the market in 2002, AlGaInP and AlGaAs devices had shares of 24% and 4%, respectively. The remaining 4% was accounted for by multichip devices, which contain red, green and blue chips for making white light (figure 2).
Mobile appliances
Steele explained that growth in the HB-LED market during 2002 was mainly due to demand from mobile appliances. This market segment, which now accounts for 40% of the overall HB-LED market, includes mobile phone screen and keypad backlights, as well as LEDs used for similar functions in PDAs and digital cameras.
Despite very little growth in shipments of mobile phone handsets during 2002, the consumption of HB-LEDs in handsets grew a massive 114% compared with the previous year. Several factors influenced this growth, including the proliferation of blue and full-color screens, the latter requiring white LED backlights. Full-color screens are now found in almost all phones sold in Japan, and are also very popular in Korea. Larger screens (requiring more or brighter LEDs), secondary screens and keypad backlights all added to the demand for HB-LEDs, as did functions such as multicolor ringer lights that can be programmed to match a different caller with a different color.
Sen Yang from Motorola s display design center described technology for full-color displays in mobile handsets. Early color displays used reflective technology, in which ambient light passes through the LCD and is reflected back out again. These work well outdoors and in sunlight, but can be difficult to read in office environments. For this reason, LED frontlights are usually used, but this creates other problems. Transmissive technology, which is also used in laptops, relies entirely on backlighting, and provides the richest colors in an indoor environment. However, such displays are virtually unreadable in strong sunlight. The third technology is transreflective; such displays have a backlight and also reflect ambient light. They perform less well than transmissive displays indoors, but are better in sunlight.
Backlights continue to improve, and are becoming thinner, brighter and more uniform. "Backlights for today s full-color displays almost all use white LEDs together with a plastic lightguide," said Yang. Making further improvements to the brightness of backlights will require brighter LEDs, as well as smaller variations in brightness and color. Handset designers are also looking for thinner lightguides, thinner LEDs and narrower display borders for mechanical, cosmetic and ergonomic reasons.
Yang described organic LEDs (OLEDs) as offering high brightness, video rates and good saturated color. "OLEDs will continue making inroads," he said. "However, issues with cost, lifetime and readability in sunlight remain to be solved."
Signs and displays
The second largest market for HB-LEDs in 2002 was the signs segment, with a 23% share. Signs using LEDs range from single-color moving message panels to full-color video screens. Although there was an increase in the overall surface area of LED-based signs deployed during 2002, price declines meant that the net revenue growth was only around 3%. Large companies such as Barco, Daktronics and Lighthouse selling full-color video screens for sports stadia, concerts and casinos continued to prosper, although advertising signs suffered due to the recession. Traffic variable message signs were a major market for single-color signs.
According to Paul Semenza of Stanford Resources, the market for large LED video signs will more than double from 30,000 m2 in 2002 to over 60,000 m2 in 2007. Meanwhile, the market for LED text signs is already at 60,000 m2 and will increase to 100,000 m2 by 2007. Prices are higher for indoor displays and small pixel pitches - as high as $60,000 per m2 for indoor displays with a 5 mm pitch.
Automotive lighting
The automotive segment had an 18% share of the total HB-LED market ($324 million) in 2002, and grew by around 30% compared with the previous year, said Bob Steele. Most of this growth came from interior applications, where LEDs are used as to illuminate instrument clusters and control functions (figure 3). Around 80% of European cars now have LED lights in their instrument panels. There is very little activity among US car makers, while Japan seems set to be the next growth area. Exterior lighting showed a small amount of growth, mainly for center high-mounted stop lights. Rear stop/turn/tail lights are limited to high-end cars, in modest production volumes, while LED-based headlights are still several years away. The truck and bus market is growing rapidly, driven by the benefits of reduced maintenance when standard bulbs are replaced by LEDs. Most new US trucks, and all buses, are being built with LED signals and markers.
Expanding on the exterior automotive lighting market, Jianzhong Jiao of North American Lighting explained the appeal of LEDs to car makers. In the US, car makers are interested in styling and design flexibility, while Japanese and European manufacturers tend to value longer lifetimes and power consumption savings. "A power reduction of 100 W is equivalent to 2% improvement in fuel economy," said Jiao. Negative impacts of LEDs include a higher initial cost, and increased lamp design complexity.
The challenges for LED suppliers, said Jiao, are to reduce cost while increasing quality and performance. Targets for the latter include higher lumen output, meaning fewer LEDs, and higher brightness (defined as the number of lumens per unit area). For headlamps, brightness is more important than total lumen output, and there are strict requirements for high brightness gradients within the beam.
Signals and illumination
According to Steele, around 1.5 million LED traffic signals (including arrows and pedestrian signals) were installed in 2002. Most of these are in the US, where around 39% of red signals are LED-based, while China is the second largest market. Road traffic signals dominate the signals segment, which accounted for around 2% of the total HB-LED market in 2002.
In the aviation industry, LEDs have a number of potential uses for interior and exterior lighting in aircraft, according to John Petrick of TWR Lighting. Also, airports have a huge number of lights to mark out runways, taxiways and boundaries, and to mark obstructions such as towers. "Runway centerline LED lights are already in place, although no navigational lights have been deployed yet," said Petrick.
Illumination accounted for 5% of the total HB-LED market in 2002, and was made up of a number of niche applications such as architectural lighting, machine vision, emergency lighting and flashlights. Most applications use colored lights, and LEDs are not yet competing in the general illumination market, although rapid improvements are being made.
According to Liam Kelly of StockerYale, there are a wide variety of machine vision applications: "These include separating green apples from red, or detecting defects in semiconductor packaging, or paint quality analysis. LEDs are gradually displacing other forms of illumination." Machine vision illuminators come in a variety of standard formats, including lines, area lights and ring lights.
These outstanding figures were presented by Strategies Unlimited s Bob Steele at February s Strategies in Light conference. According to Steele s estimates, mobile appliances made up the largest market segment in 2002 with a 40% share of the total, followed by signs (23%), automotive (18%), illumination (5%), signals (2%) and other (12%).
Steele predicted steady growth in the HB-LED market of around 20% per year for the next five years, assuming that normal growth takes place in the general economy (figure 1). Continued recession and/or the impact of war with Iraq could reduce capital spending on trucks and large video screens; consumer spending on cars and mobile appliances; and government spending on highway signs and traffic signals, for example. Steele predicted that the HB-LED market will reach $4.4 billion by 2007. Mobile appliances will continue to be the largest segment with a value of around $2 billion, while the illumination market will grow to around $500 million.
In terms of materials, the market continues to be dominated by InGaN-based devices. Spurred by the use of blue, green and white LEDs in mobile handsets, InGaN LED shipments grew by 72% in 2002, reaching a value of $1.22 billion. This exceeds the value of the entire HB-LED market in 2001. While InGaN devices accounted for 68% of the market in 2002, AlGaInP and AlGaAs devices had shares of 24% and 4%, respectively. The remaining 4% was accounted for by multichip devices, which contain red, green and blue chips for making white light (figure 2).
Mobile appliances
Steele explained that growth in the HB-LED market during 2002 was mainly due to demand from mobile appliances. This market segment, which now accounts for 40% of the overall HB-LED market, includes mobile phone screen and keypad backlights, as well as LEDs used for similar functions in PDAs and digital cameras.
Despite very little growth in shipments of mobile phone handsets during 2002, the consumption of HB-LEDs in handsets grew a massive 114% compared with the previous year. Several factors influenced this growth, including the proliferation of blue and full-color screens, the latter requiring white LED backlights. Full-color screens are now found in almost all phones sold in Japan, and are also very popular in Korea. Larger screens (requiring more or brighter LEDs), secondary screens and keypad backlights all added to the demand for HB-LEDs, as did functions such as multicolor ringer lights that can be programmed to match a different caller with a different color.
Sen Yang from Motorola s display design center described technology for full-color displays in mobile handsets. Early color displays used reflective technology, in which ambient light passes through the LCD and is reflected back out again. These work well outdoors and in sunlight, but can be difficult to read in office environments. For this reason, LED frontlights are usually used, but this creates other problems. Transmissive technology, which is also used in laptops, relies entirely on backlighting, and provides the richest colors in an indoor environment. However, such displays are virtually unreadable in strong sunlight. The third technology is transreflective; such displays have a backlight and also reflect ambient light. They perform less well than transmissive displays indoors, but are better in sunlight.
Backlights continue to improve, and are becoming thinner, brighter and more uniform. "Backlights for today s full-color displays almost all use white LEDs together with a plastic lightguide," said Yang. Making further improvements to the brightness of backlights will require brighter LEDs, as well as smaller variations in brightness and color. Handset designers are also looking for thinner lightguides, thinner LEDs and narrower display borders for mechanical, cosmetic and ergonomic reasons.
Yang described organic LEDs (OLEDs) as offering high brightness, video rates and good saturated color. "OLEDs will continue making inroads," he said. "However, issues with cost, lifetime and readability in sunlight remain to be solved."
Signs and displays
The second largest market for HB-LEDs in 2002 was the signs segment, with a 23% share. Signs using LEDs range from single-color moving message panels to full-color video screens. Although there was an increase in the overall surface area of LED-based signs deployed during 2002, price declines meant that the net revenue growth was only around 3%. Large companies such as Barco, Daktronics and Lighthouse selling full-color video screens for sports stadia, concerts and casinos continued to prosper, although advertising signs suffered due to the recession. Traffic variable message signs were a major market for single-color signs.
According to Paul Semenza of Stanford Resources, the market for large LED video signs will more than double from 30,000 m2 in 2002 to over 60,000 m2 in 2007. Meanwhile, the market for LED text signs is already at 60,000 m2 and will increase to 100,000 m2 by 2007. Prices are higher for indoor displays and small pixel pitches - as high as $60,000 per m2 for indoor displays with a 5 mm pitch.
Automotive lighting
The automotive segment had an 18% share of the total HB-LED market ($324 million) in 2002, and grew by around 30% compared with the previous year, said Bob Steele. Most of this growth came from interior applications, where LEDs are used as to illuminate instrument clusters and control functions (figure 3). Around 80% of European cars now have LED lights in their instrument panels. There is very little activity among US car makers, while Japan seems set to be the next growth area. Exterior lighting showed a small amount of growth, mainly for center high-mounted stop lights. Rear stop/turn/tail lights are limited to high-end cars, in modest production volumes, while LED-based headlights are still several years away. The truck and bus market is growing rapidly, driven by the benefits of reduced maintenance when standard bulbs are replaced by LEDs. Most new US trucks, and all buses, are being built with LED signals and markers.
Expanding on the exterior automotive lighting market, Jianzhong Jiao of North American Lighting explained the appeal of LEDs to car makers. In the US, car makers are interested in styling and design flexibility, while Japanese and European manufacturers tend to value longer lifetimes and power consumption savings. "A power reduction of 100 W is equivalent to 2% improvement in fuel economy," said Jiao. Negative impacts of LEDs include a higher initial cost, and increased lamp design complexity.
The challenges for LED suppliers, said Jiao, are to reduce cost while increasing quality and performance. Targets for the latter include higher lumen output, meaning fewer LEDs, and higher brightness (defined as the number of lumens per unit area). For headlamps, brightness is more important than total lumen output, and there are strict requirements for high brightness gradients within the beam.
Signals and illumination
According to Steele, around 1.5 million LED traffic signals (including arrows and pedestrian signals) were installed in 2002. Most of these are in the US, where around 39% of red signals are LED-based, while China is the second largest market. Road traffic signals dominate the signals segment, which accounted for around 2% of the total HB-LED market in 2002.
In the aviation industry, LEDs have a number of potential uses for interior and exterior lighting in aircraft, according to John Petrick of TWR Lighting. Also, airports have a huge number of lights to mark out runways, taxiways and boundaries, and to mark obstructions such as towers. "Runway centerline LED lights are already in place, although no navigational lights have been deployed yet," said Petrick.
Illumination accounted for 5% of the total HB-LED market in 2002, and was made up of a number of niche applications such as architectural lighting, machine vision, emergency lighting and flashlights. Most applications use colored lights, and LEDs are not yet competing in the general illumination market, although rapid improvements are being made.
According to Liam Kelly of StockerYale, there are a wide variety of machine vision applications: "These include separating green apples from red, or detecting defects in semiconductor packaging, or paint quality analysis. LEDs are gradually displacing other forms of illumination." Machine vision illuminators come in a variety of standard formats, including lines, area lights and ring lights.
