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Opto Provides Lone Bright Spot In 2009

With the cellphone handset market in decline, high-end applications of LEDs and laser diodes look like the only growth areas for III-V electronics in 2009.

Market analyst firm iSuppli is predicting that optoelectronic devices will provide the only growing sectors within the entire semiconductor market during 2009.

According to the January 2009 version of the San Jose-based consultancy s application market forecast tool, the market for laser diodes will grow by nearly 8 percent this year, with LEDs expanding by 2.9 percent and “other" optoelectronics growing 0.6 percent.

The figures for those three optoelectronics sectors are in stark contrast to the rest of the semiconductor market, which is expected to show an overall decline in value of 9.4 percent on 2008.

iSuppli estimates the 2008 market for LEDs to have been worth $7.2 billion, making it the fastest-growing sector last year, with an 11 percent expansion.

Although the market for laser diodes is expected to grow more quickly than that for LEDs this year, at just $2.0 billion in 2008 it accounted for a much smaller chunk of overall semiconductor revenues. And despite growing to $2.2 billion this year, laser diodes will do little to halt the overall industry "“ estimated to be worth some $267 billion in 2008 "“ declining to $242 billion.

Yet, the iSuppli projection for laser diodes is at odds with views emerging from the Photonics West event in San Jose this week.

Susan Curtis, who is this week blogging for our sister site optics.org from the Laser and Photonics Marketplace Seminar at Photonics West, reports that senior figures at two industry publications see the market for lasers used in optical data storage "“ a key application for InGaAs, AlGaAs and InGaN components "“ declining sharply.

Applications in telecommunications are also expected to be hit, albeit to a lesser extent than the consumer-driven data storage sector, thanks to a perceived need to support increased bandwidth demand with faster optical connections.

Buried away in the “Analog IC" section of iSuppli s overview, the market for GaAs-based power amplifiers is not broken out separately by the US analyst firm. But with mobile phone shipments falling 10 percent year-on-year in the fourth quarter, and now expected by Nokia to fall by the same amount from 2008 to 2009, the portents do not look good. iSuppli reckons that the markets for analog ICs and RF and microwave components will decline by 15 percent and 20 percent, respectively, this year.

But the forecaster does single out the potential for LEDs in television backlights as an important positive trend:

“The LCD television market will consume $163 million worth of LEDs [in 2009], up from $51 million in 2008," says the firm, adding that, by 2012, this figure will have swelled to $1.4 billion.

Riddhi Patel, principal analyst for the television sector at iSuppli, noted the trend towards LED backlights at the Consumer Electronics Show in Las Vegas earlier this month (see related story), where the thin, energy-efficient designs already prevalent in PC notebooks are beginning to find more widespread adoption.

Major electronic company adopters include Samsung, whose “Series 9" LCD TVs now feature LED backlights as standard, although the technology is currently restricted to premium TV models.

But iSuppli suggests that this may soon change, thanks partly to the joint venture set up last year between General Electric and the Taiwanese electronics company Tatung, which it expects to produce lower-cost LED-backlit TVs.

While Tatung and GE will likely use white LEDs to keep costs to a minimum, Patel maintains that three-color backlighting from red, green and blue emitters will provide the best images.

“RGB LEDs are the best solution for LCD backlighting," Patel said. “But pricing is still too high, and these won t show up in LCD TVs in significant numbers until 2010."

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