Backlight Boom Divides Analyst Opinion
The backlight unit in large LCD screens (defined as more than 10 inches across the diagonal) is expected to be the next major application where high-brightness (HB) LEDs will take over from more traditional forms of illumination. Almost all of these large LCD screens are illuminated by cold-cathode fluorescent lamps (CCFLs), but using HB-LEDs should allow thinner, more energy-efficient TVs and monitors, with the added bonus of improved color reproduction. That s the theory, anyway.
Many makers of HB-LEDs are now scaling up production capacity in the belief that the emerging market will mimic that of small LCD screens. Driven largely by cellular handsets, small LCD screens became the first killer application of HB-LEDs, and now represent approximately half of the $4 billion annual market for such chips. With around 300 million large LCD screens now being manufactured every year, and the backlight unit accounting for up to one-third of the total component cost in larger displays, there is undoubtedly a major market opportunity staring makers of HB-LED chips and backlight units in the face.
So far, the switch from traditional technologies to LED backlighting has been very slow to take off. Only a handful of products – most of which are modestly sized handheld and notebook PC displays – feature LED backlight units. In fact, according to the latest report and forecast by market analyst DisplaySearch, only 1 million LED backlight units for large LCD screens are thought to have been sold in 2006 (0.4% of the 277 million estimated to have shipped in the year).
In what it describes as a "conservative" outlook, DisplaySearch says that shipments of LED backlight units for LCD televisions and PC monitors will triple to nearly 3 million in 2007 (see figure 1). But that fast-growing slice will still represent only 0.9% of the available market of more than 300 million LCD displays.
Steve Jurichich, DisplaySearch s director of display technology, estimates that shipments of LED backlight units will increase to 8 million in 2008 (2.1% penetration) and 12 million in 2009 (2.8%). Although this is undoubtedly rapid growth, it is nothing like the market penetration that LEDs have enjoyed in mobile-phone handsets over the past decade or so.
The simple reason for this, as always, can be reduced to cost and performance. Whereas just a few very cheap chips are enough to light up a mobile-handset screen, hundreds are needed to illuminate TVs of the size being purchased by today s consumers, and demands on the illumination quality are far more stringent than for a simple phone.
According to Jurichich, the key reason behind the relatively conservative DisplaySearch forecast for LED backlight penetration is that there is still a great deal of uncertainty over the merits of the new technology, when its cost to manufacturers of LCD TVs and monitors is taken into account. Part of the problem is that for TV applications, LED backlights have been incorporated primarily into very-high-end models – and without much success.
Learning from Sony s mistakes
"The Sony experience has made [LCD TV makers] much more conservative," Jurichich said, referring to the Japanese company s failed attempt to lure early adopters to buy the $13,000 LED-backlit Qualia TV that it launched in 2004. "Those sets were ahead of the curve , and with 450 individual LEDs required in each backlight, they were also very expensive."
So, is rapid adoption likely? For that to be the case, the advantages of LEDs would have to be significant. In mobile handsets, two key factors that made LEDs the technology of choice were the desire of designers to make smaller, slimline phones; and the better light-conversion efficiency of semiconductor technology, which translated directly to a longer battery life. While notebooks and handheld PCs undoubtedly benefit from weighing less and having a longer battery life, these factors are of little use in large LCD screens. Desktop PC monitors and televisions are plugged into wall sockets rather than being battery-operated, and although LEDs might enable slightly thinner displays, the impact would be minimal compared with that created by HB-LEDs in mobiles.
Analysts at iSuppli are in the business of predicting the LED market, and they appear to be much more bullish on the opportunity emerging with large LCD backlights. Like DisplaySearch, iSuppli analyst Paul Semenza estimates that around 300 million large LCDs will ship this year, and that this will increase to around 500 million by 2010 – largely fueled by increased production of LCD TVs (see figure 2).
However, unlike DisplaySearch, Semenza also forecasts the likely value of the large LCD backlight market to LED chip manufacturers. He says that from a standing start in 2006, in which sales of LED backlight units were negligible, the market for LED chips used in large LCD applications will rise exponentially from around $100 million in 2007 to more than $1 billion in 2009.
This year looks like it may be a critical year, with the average selling price of LED backlight units expected to drop by one-third to $200. Even at this price, however, they would remain almost twice as expensive as the incumbent CCFLs.
The DisplaySearch report does not predict the effect large LCD backlights will have on the HB-LED market. This is because DisplaySearch s analysts feel that such a forecast would be reduced to guesswork, considering the number of variables to be factored in. For example, there are a huge number of backlight designs, including many that are custom-built. Larger screens would require brighter chips, with some using RGB sources and others using phosphor-based white LEDs, while the efficacy and price of the chips will continue to change on a regular basis over the next few years as processes and wafer yields are refined.
For LED manufacturers targeting large LCD backlight units, perhaps a more significant and reliable indicator is market penetration into the different LCD applications. The DisplaySearch and iSuppli reports broadly agree on the overall rate of penetration. For 2009, Jurichich from DisplaySearch suggested that 2.8% of all LCD screens will feature LED backlight units, while iSuppli s Semenza quotes 2.5%.
"The penetration is highest in very large (over 40 inch) TV panels: 13%," said Semenza. "But it is below 1% for standard notebooks and monitors. As the 40-plus inch panels will use many LEDs in each backlight unit, the LED value per panel will be $140 on average, compared with about $50 for notebook or monitor panels." Semenza added: "The significant uptick in LED value after 2009 reflects our assumption that penetration will increase significantly to 10% [overall] in 2011."
But, as Jurichich warns, CCFL makers are not standing by idly watching their products become obsolete. They are now developing improved color-rendering technology. "They have raised the bar," Jurichich said.
As a result, developers of LED backlights, which include the likes of Cree, Lumileds and Osram Opto Semiconductors, may have to concentrate on other advantages of solid-state technology. For example, LEDs do not require a large strike voltage to start up. This means that fewer capacitors are needed in the backlight unit.
Another advantage of RGB LEDs over CCFLs is that they can be switched very quickly, and synchronized to deliver a high-quality image without the need for a color filter.
In the longer term, this could be a decisive factor in favor of LEDs because the color filter is the second most expensive part of an LCD TV (after the backlight itself), accounting for 19% of the component costs in a typical 40 inch screen. Though it may be five years before this technology is fully developed, says Jurichich, this advantage could ultimately be the one that sparks widespread market penetration for LEDs.
What really matters
For now, though, the primary focus for LED and LED backlight manufacturers should be on improving the dollars-to-lumen ratio. For a 23 inch TV, a relatively modest improvement in LED efficacy to 60 lm/W would reduce the number of LEDs required in the backlight by around one-third, from 309 to 234. At that level, Jurichich says, the extra cost of the backlight would be much more acceptable to manufac-turers and consumers alike.
DisplaySearch s 832-slide TFT LCD Materials Report is available now. See www.displaysearch.com for details. iSuppli s Paul Semenza presented details of the company s HB-LED market forecast at Photonics West 2007, held in January.