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LED phosphor market to boom soon

Independent phosphor companies are freeing the market from IP blocking by big players
In the early 2000’s, most of the LED phosphor industry was controlled by major LED players that held key IPs and selectively granted licenses and cross-licenses. 

The landscape changed in the mid 2000’s with the emergence of phosphors that were “IP-free,” credible alternatives to YAG and TAG.

These were commercialised on the open market by independent phosphor manufacturers which were unaffiliated with LED manufacturers.

This is detailed in a new publication by Yole Développement. The firm's report provides a detailed list of more than fifty companies that are involved in LED phosphor manufacturing.

Over twenty of the companies are located in China, where the emergence of vendors with improving quality satisfy the tier-one Chinese LED makers who favour IP and performance versus price.

Yole expects the phosphor market to grow significantly during the next five years, and potentially pass the $1 billion mark by the end of this period. However, a significant fraction of this market will remain captive.

Technology is still a major opportunity for differentiation in order to increase performance and design in the face of a strong and limiting intellectual property.

The combination of YAG phosphor and blue LEDs remain the solution of choice for applications where high CRI and warm colour temperature are not required.

But, according to Yole, Nichia’s strong IP limits its access to selected partners and major LED manufacturers that have been able to negotiate cross-license agreements thanks to its own strong IP position.

While still not on an equal footing with YAG in terms of performance, silicates have improved significantly and are closing the gap. However, as Nichia’s critical IP is set to expire in the next few years, an increasing number of phosphor manufacturers are offering YAG compositions as well.

The next battle in the LED phosphor industry stems from the rapid growth of LED applications that require warm colours and saturated reds in display or residential and retail lighting. For these, additional red and/or green phosphors are added to the mix.

Nitrides and oxynitrides are claimed to offer excellent performance but are both controlled by Denka and Mitsubishi Chemicals, with strong IP obtained from NIMS. Market price for these materials is 5 to 10 times the cost of yellow phosphors.

Many organisations are therefore scrambling to develop better, cheaper and non IP-restricted compositions. Tungstates, molybdates, carbidonitrides, green aluminates and selenides are also being investigated. What's more, Quantum Dots are finally emerging as a credible alternative to traditional phosphor in some applications.

But phosphor composition is not the only key factor. Manufacturing technology, deposition methods and phosphor design all have significant impact on LED and overall system cost and performance.

Remote phosphors offer significant benefits in terms of system performance and efficiency.

However, they increase the required amount of phosphor material and associated cost by orders of magnitude. This constitutes the major roadblock for adoption. With some applications though, remote phosphors are currently the best option for reaching the required performance. Also, the additional phosphor cost can be partially or completely offset at the full system level by improving the performance of the system that allows a reduction of the component count.

Whether to adopt remote phosphors depends on application, performance and cost targets.

While supply constraints on Light Rare Earth should ease soon, tension will persist for the heavier elements, including yttrium, terbium and europium, which are critical to both fluorescent lamp and LED makers. Shortages could appear and persist even after 2015.

Fluorescent lamp is the major application competing with LED for these resources.

Yole believes that in the short-term, the consumption of fluorescent lamps will increase significantly, putting additional strain on supply.

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