Demand for key raw material to double as LED market booms
The boom in the precursor market reflects the rising operating rate of MOCVD as the LED lighting market grows
Global demand for precursor, a material used in manufacturing of light-emitting diodes (LEDs), is set to more than double from 2012 to 2016, as the market for LED lighting booms, according to a new report entitled “Precursor for LED MOCVD–Market and Industry Analysis,” from Displaybank, now part of IHS.
The market for precursor used in the metal-organic chemical vapour deposition (MOCVD) manufacturing process for making LEDs will rise to 69 tons in 2016, up a notable 114 percent from 32 tons in 2012, as presented in the attached figure.
“The boom in the precursor market reflects the rising operating rate of MOCVD as the LED lighting market grows,” said Richard Son, senior LED analyst at IHS.
Precursor is a core material that ensures the optimal light efficiency for each LED epi layer. It is used in the MOCVD process, which is the most important process in manufacturing LED chips. Major precursors include trimethylgallium (TMGa), trimethylindium (TMIn), trimethyl aluminum (TMA), triethylgallium (TEGa) and C2Mg2. Among these, TMGa is the most widely used and commands about 94 percent of total demand.
Global shipments of MOCVD equipment are on the rise, with shipments expected to climb by 17 percent in 2013.
The largest buyers of MOCVD equipment—South Korea, Taiwan and China—account for about 80 percent of the global demand of precursors. China, which is generating the highest growth in installation of MOCVD equipment among the three countries, is expected to make up 45 percent of the global demand of precursors in 2016.
In the nascent stage of the LED market, Dow Chemical Co. was the unrivalled leader in the precursor market. However, with the recent growth in precursor demand, new players have been investing in R&D and manufacturing facilities while aggressively breaking into the market with low prices for similar-quality product. Such developments will intensify competition further among precursor makers.