Tawian’s LED industry has weathered the global economic storm, and it is now recovering fast thanks to increased deployment of this chip in street lighting and display backlights. The Photonic Industry and Technology Development Association (PIDA) details the transformation.

The financial crisis brought a global downturn at the very beginning of 2009 that led to a slowdown of market development and a decline in revenue generated by Taiwan’s LED industry. However, strong demand from LED TVs is reviving the industry beyond expectation. It is thought that revenue from Taiwan’s LED industry hit NTD 80 billion ($ 2.5 billion) in 2009, which is 3 percent higher than it was for the previous year. And PIDA analysts predict that the LED industry will do even better in 2010, with the year-on-year revenue growth of 13 percent.

The leading application for Taiwan’s LED products is mobile phones, with a 37 percent share of total revenue, followed by electronic devices, accounting for 32 percent. The market share taken by these two applications slightly shrank in 2009, due to rising revenues in signs/displays and illumination. The former accounts for more than 20 percent of LED sales, and has delivered 5 percent revenue growth compared with 2008, while the share of LED illumination has increased from 5 percent in 2008 to 7 percent in 2009. PIDA’s analysts forecast continued growth for the next few years generated by the deployment of LEDs in signs/ displays and illumination.

 



Taiwan’s LED revenue was flat towards the end of the noughties, but it will pick up over the next few years. Credit: PIDA

In 2009, LED streetlights and LED-backlit TVs (or LED TVs, the term coined by Samsung) were the applications that attracted the most interest in Taiwan’s LED industry. Regarding LED streetlights, the government collaborated with several industry players to set up three demonstration areas in Taipei city. Later, in June 2009, the Cross-straits LED Forum provided a prime opportunity for a Taiwanese LED player to install a demonstration involving about 1.4 million street lamps in 21 major cities in China. Taiwanbased chipmakers are believed to benefit from China’s insufficient domestic production of LED chips.

LED TVs have taken off beyond industry players’ expectation, and sold half a million units within a hundred days, triggering a battle to launch LED TV among brand name companies including Sony, LG, Sharp, and Toshiba, who are all vying for market share. This has increased demand for LEDs, benefiting Taiwan’s chipmakers and packagers. For example, sales at Taiwan’s largest LED chipmaker, Epistar, have been growing since summer 2009, and in January 2010 they hit NTD 1.3 billion, more than double that for January of the previous year. Another leading LED player, Formosa Epitaxy, has also seen its revenue increase recently. In February 2010 sales hit NTD 203 million. The company has installed 43 MOCVD reactors since the fourth quarter of 2009, and it will add another 55 this year that will give the firm a year-on-year increase in capacity of 40 percent.

Government-backed growth

In order to reflect the industry’s need to commercialize the LED, as well as to put into effect the Energy-Saving and Carbon-Reduction Action Plan, Taiwan’s central and local governments collaborated with a number of industry players. This led to an announcement in December 2008 to set up three exclusive demonstration areas, making it abundantly clear that the government wants to nurture the LED industry.

 



The proportion of Taiwan’s LED production deployed in signs and displays will rise during the first few years of this decade. Credit: PIDA

 



Market analyst Strategies Unlimited predicts that the proportion of LEDs used for displays will grow substantially from 2009 (top) to 2012 (bottom)

The three demonstration areas are located in Taipei city and include 228 Peace Park, Fuzhou Street and Nanyiang Street and its neighborhood. In 228 Peace Park, an LED lighting landscape, plus a garden control system and accessories, were adopted to showcase the impressive grand sight down at Kaidagelan Boulevard. Around Fuzhou Street, LED outdoor street bulbs were used to light up the roadway. In the neighborhood of Nanyiang Street LED lighting fixture were designed to beam down on the paving.

According to Chii-Ming Yiin, Taiwan’s Minister of Economic Affairs, with years of subsidization from the government plus advanced technology improvement from business initiatives, the long-anticipated third revolution in lighting has arrived. Minister Yiin also claimed that Taiwan is leading the world in terms of LED production by volume, and it can drive the industry growth that began last year. What the government aims to contribute to this development is to draw up a well-arranged plan, including national standards, enactment of regulations, and innovation awards programs.

In addition, according to Taipei City Government - one of the cities on the island that invests a great deal of money and effort in driving the environmental protection activities - the exclusive demonstration can act as a catalyst that spurs more effective follow-up commitments to energysaving. Mayor Longbing Hao acknowledged that global warming is getting worse and will cause a great deal of harm, but this state of affairs can be mitigated if governments throughout the world, including Taipei, develop measures to reduce greenhouse gas emissions. In Mayor Hao’s expectation, more than 140,000 incandescent streetlamps in Taipei city will soon be replaced with power-saving, LED-based bulbs.

According to LEDinside, an independent industry research institute based in Taiwan, the nation’s streetlight market offer a potential business opportunity valued at around NT $40-50 billion for local LED firms. The government earmarked NT $200-300 million to install LED streetlights in 2009. LEDinside also predicted that Taiwanese LED firms that specialized in packaging, including Unity Opto Technology Co., Ltd, Bright LED Electronics Corp., and Foxsemicon Integrated Technology Inc., will benefit from the plan.

 



The number of attendees at LED Lighting Taiwan has risen rapidly over the last few years

Given the wide range of activities needed to implement the production of LED-based systems for new applications, collaboration across the industry is widely accepted as the right way to go. Two companies expected to produce LED chips for this effort are: Epistar Corporation, which is located in the central city of Hsinchu and is developing and manufacturing high brightness LED products by applying its own proprietary MOCVD technology; and Formosa Epitaxy Incorporation, a Taoyuan-based manufacturer of InGaN LED wafers and chips that is offering InGaN blue, green, and near-UV LED products.

On the packaging side, players that join the project include Lite-On Technology Corp., a wellestablished LED firm that will help to build a fully integrated supply chain of LEDs among Taiwanese high-tech heavyweights, along with companies such as: Alliance Optotek Corporation, a solid-state lighting solution provider for lighting industries; China Electric Mfg. Corporation, an own-branded lighting company supplying a full range of products including LED and Solar Energy lighting systems; and Lustrous Technology Ltd, a leading COB packaging technology company.

Lighting may be the future for LEDs, but today revenue is driven by chip deployment in other applications, ranging from cell phones to large-sized products such as notebooks, TVs and monitors. Large-sized display backlighting should become the largest LED application market in near future, according to PIDA. LED application in displays will soar from 1 percent in 2009 to 23 percent in 2012, bringing a strong growth in the LED market.

Thanks to the low cost associated with LED backlights in small-sized displays, this technology that combines high efficiencies with low weight has enjoyed substantial success in small-sized products. The technology is now starting to be deployed in large panels (not including netbooks), with shipments reaching 79.8 million units. The penetration rate was 18 percent in 2009, a four-fold growth compared with the previous year. In total, the penetration rate of LED back-lit notebooks leapt from 11 percent in 2008 to 51 percent in 2009, becoming the strongest driver of growth of LED backlit modules in large-sized panels. Concerning LCD TV, the penetration rate of the LED back-lit versions has grown from 0.5 percent in 2008 to 2.5 percent in 2009, and LED-lit monitors might be over 2 million in 2009 with the penetration rate at 1.6 percent.



Rising sales of LED backlights for LCD TVs are driving strong growth of Taiwan’s LED industry. Firms involved in the supply chain include: LED TV panel makers AUO, CMO, CPT; LED TV brand names Amstran, BenQ, CMO; LED chip makers Epistar, Formosa Epitaxy, Tekcore, Huga, Optotech, Lextar, Chi Mei Lighting; LED packagers Unity Opto, Everlight, Harvatek, LiteOn, LHTC, Wellypower; and LED lead frame producer I-Chiun Credit: Samsung

 

Taiwan, being the most powerful LED manufacturing engine in the world, is well known for its integrated and comprehensive LED industry supply chain. In order to reflect the trend and the bright performance of Taiwan’s LED industry, LED Lighting Taiwan 2010, scheduled to be held from June 9th to 11th 2010, will not only bring the most updated developments and features of Taiwan’s LED  industry - it will also showcase the synergy between local and global LED manufacturers, and how this synergy can help to create business opportunities.

 



LED Street Lights in 228 Peace Park. Credit PIDA

This year show organizer PIDA has launched a global marketing initiative to boost the visibility of this exposition. PIDA is going to arrange official visiting activities, such as cooperating with Science Parks, meeting with international delegates from Germany, UK and the Republic of Ireland, and organizations such OITDA and JLEDS to enhance the cooperation between the local and global LED industry. PIDA also cooperates with overseas Taiwan trade offices/foreign trade offices to market the green image of LED Lighting Taiwan. In addition, the international technical and trade press will be out in force, helping to give more exposure to the show.

Apart from the exhibition itself, PIDA also presents special events such as the Opening Ceremony, Outstanding Photonics Product Award, Welcome Reception Party, Exhibitors’ Seminar, and Business Match Meeting to help promote this annual event. In 2009, LED leaders including Nichia, Cree, Dow Corning, Panasonic, Seoul Semiconductor, Optotech, Everlight, Genius Electronic Optical and LiteOn attended this photonic event and made it a success. Top tier providers will be at LED Lighting Taiwan again this year.

LED Lighting Taiwan 2010, with the strong commitment and support from both local and world-class LED manufacturers, promises to help boost the industry’s vitality, as well as stimulate the business. Thanks to the efforts from all participants at the show, LED Lighting Taiwan 2010 will create win-win opportunities for everyone and bring tremendous success to the LED industry.

 



Millions of LED street lights are being deployed in Taiwan. The supply chain involves: LED chips from BridgeLux, Cree, Epistar, Formosa Epitaxy, Nichia, Osram, SemiLEDs; LED packages from Everlight, LiteOn, AOT, Bright, Harvatek, Lustrous; LED thermal modules from TTIC, CCI, AVC, Neng Tyi, Lustrous, NeoPac Opto, Advanced Thermal Devices, AuguX; LED lamp poles from Toalux, Everready Precision; and LED street lamp systems from FITI, NeoPac Opto, Bright LED, TTIC, Advanced Thermal Devices, Harvatek, LEOTEK, Delta, TGI, Unity Opto, Neo-Neon, Tatung, Genius, Topco, Anteya, Yeong Li, Alliance Optotek, AuguX, Everlight

 

Taiwan’s Top 10 LED Backlight Module Manufacturers

Coretronic Coporation

Radiant Opto-Electronics Corporation

Forhouse Corporation

Nano Electro-Optical Technology (Nano-Op)

Kenmos Technology

Forward Electronics Co., Ltd

Chi Lin Technology Co., Ltd

Global Lighting Technologies, Inc.

K-Bridge Electronics Co., Ltd

Precisions (L) Corp