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Technical Insight

Emerging sectors speed LED recovery

Now much less reliant on mobile phone backlighting, the market for high-brightness LEDs is bouncing back from two years of sluggish growth, writes Michael Hatcher.

Thanks to increasing penetration in products such as digital cameras, notebook PC backlights and cars, the market for packaged high-brightness LEDs grew by nearly 10% in 2007 to reach $4.6 billion.

According to Bob Steele, whose annual update traditionally opens the Strategies in Light conference each February, the acceleration showed that the market is recovering from "slow growth" through 2004–2006. Steele now expects the industry to maintain this recovery as the HB-LED market grows to more than $11 billion over the next five years.

While a staggering 39 billion units were shipped during 2007 (up 26% on 2006), it is now clear that HB-LED makers are becoming much less reliant on the mobile phone industry.

That s good news for chip makers, because price erosion in the mobile phone sector is a major influence on the overall market and a key reason why market growth has languished at only 6% for the past couple of years. Steele told delegates that the HB-LED product mix is shifting significantly as new, more lucrative applications come to the fore.

And while mobile applications still represent a 44% chunk of the overall market, digital camcorders, MP3 players and portable DVD players are pushing back the reliance on the basic mobile phone.

In 2007, the mobile phone market for HB-LEDs grew by only 3.3%, to approximately $1.6 billion. In contrast, the market for all other mobile applications jumped 21% to $264 million. Steele expects this trend to be a strong one over the next few years, predicting that by 2012 notebook PCs will represent the biggest mobile application outside of the humble phone.

That shift is already happening, judging by the large number of notebook PC makers now using white LEDs in their backlights. Apple, Dell, Acer and HP were four big-name brands to come out with LED-backlit models during 2007, as LED market penetration more than quadrupled to 3.2%.

While the display backlight market is moving quickly, the same cannot be said of the automotive market for LEDs, which is showing a more gradual, somewhat stuttering shift to solid-state technology.

Despite white-LED headlamps now appearing in series production, some lighting functions have switched from LEDs back to incandescent lamps, most notably the latest version of Honda s popular Accord. While certain automotive applications are dominated by LEDs, market penetration in stop, turn and tail lights remained flat in 2007 at just 8.5%.

Steele is predicting much more rapid growth in the "signs and displays" sector, which he says will come to dominate the overall HB-LED market by 2012. While the market for large-scale video screens is continuing to grow, with events such as the Beijing Olympics providing its predicted boost, the big driver expected in this sector is in large-scale LCD panel backlighting, for desktop PCs and televisions.

Korean giant Samsung is behind much of the existing market for LED-based TVs. But while its rear-projection sets use high-specification emitters from the US company Luminus Devices, this is a market in decline, having been usurped by the LCD panel.

For LCD TVs, cold-cathode fluorescent lamps (CCFLs) have proved to be a tough backlight to beat. As well as declining in cost, CCFL makers have improved their technology to yield high-quality TV pictures. As a result, proponents of LEDs have changed their marketing tack to focus on other advantages of the solid-state approach, such as the ability to dim the screen locally and the lower energy consumption of LEDs compared with CCFLs.

While Samsung is again forging the path in the LCD TV space, it is not using the Luminus emitters, preferring phosphor-based white LEDs to RGB. But with up to 1000 LEDs still required to illuminate a 40 inch TV, this remains an expensive technology to deploy. Samsung s entry-level 40 inch screen with LED backlighting costs $2800.

"CCFLs are getting better and cheaper, and [LED] cost is the main issue," Steele said, although he describes the picture quality as "outstanding" and something for which high-end customers will pay a premium. And because it is such a large market, even modest penetration in TVs will create a substantial business for the successful LED providers.

Of the different types of LEDs, high-power emitters (with a drive current of more than 150 mA) are growing fastest – representing 10% of the market for the first time in 2007, and now the second-biggest sellers behind standard LEDs and ahead of high-current (50–150 mA drive current) and RGB multichip sales.

For high-power chips, the two biggest applications by far are mobile (39%) and general illumination (37%). The latter was another fast-growing sub-market for HB-LEDs in 2007, leaping 60% over the previous year to $330 million.

With standards still to be finalized, LED-based general lighting is in its early gestation period and the quality of available luminaires is highly variable – as evidenced by the early findings of the US Department of Energy s CALiPER testing program. Steele highlighted LED Lighting Fixtures, now part of the Cree empire, as the company leading the way in this sector, as far as energy efficiency is concerned.

With a 60 lm/W warm-white LED lamp already on the market, and a NIST-verified 113 lm/W warm-white prototype in development, the Cree subsidiary is selling mostly to commercial and institutional, rather than residential, customers right now. Part of the secret behind the high efficacies achieved is the unique color combination used. It mixes a phosphor-converted yellow-green emission with that from red LEDs to reach the market-leading figures.

But although the energy efficiency of solid-state lighting is not in any doubt, Steele reminded his audience that many challenges remain – again, chiefly, the high up-front investment required. While London in the UK and Tianjin in China are the most recent assignees to LED streetlighting programs, the payback period of today s commercially available technologies does not yet make much economic sense and will require hefty subsidization. Aside from that, there remain issues over color consistency, electrical control and the need for high-efficiency lamp design to make the most of the LEDs intrinsic capability.

Steele s forecast for the HB-LED market predicts that the accelerating growth this year, to 12% and a total value of $5.15 billion, will be built upon between now and 2012. With rapid growth expected in 2011 and 2012 as LCD backlights begin to make an impact, Steele expects a market size of $11.4 billion in 2012.

By then, portable electronic applications should represent only a quarter of that total, divided almost equally between phone handsets and non-handset applications like notebook PC backlights. In its place as the dominant application ought to be the signs and displays sector, fuelled largely by LCD backlights.

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