Tough ride for LED equipment vendors ahead, Yole Developpement warns
In its recent study on LED packaging, the market researcher gets granular on the market development for the time frame between 2009 and 2016. According to Yole, no LED manufacturer wants to get caught short of capacity when the general lighting market scheduled to reach $20B by 2020 takes off. Thus, an unprecedented investment cycle started toward the end of 2009 and will extend through early 2012. This cycle initiated in Korea is now essentially fueled by subsidies and other incentives in China, as the country is aggressively trying to position itself as a future leader in solid state lighting. New entrants are investing massive amounts of money in order to displace existing manufacturers. This will lead to a world averaged overcapacity that will briefly exceed 50% for some tools (ie: capacity utilization rate of <50%) by mid-2012
This in turn will cause a 12-18 month down cycle corresponding to the absorption of this overcapacity as well as some consolidations that will bring the industry back to more usual utilization rates of 80%. This down cycle will extend through mid-2013. Then Yole expects a new investment cycle to kick in to respond to further increasing demand for general lighting. This might lead to another shorter excess investment to be absorbed in 2016.
Since packaging typically accounts for up to 60% of the packed LED total cost, it represents the largest single opportunity for cost reduction. For this reason, Yole expects more than $2 billion will be invested during the 2011-1016 time frame in new equipment for LED packaging. This needs to be seen against the background that LED packagers mostly are using retrofitted equipment form the IC industry and relying on existing technologies to improve the LED cost of ownership. These circumstances have allowed LED manufacturers to benefit from the experiences and earlier R&D efforts in the chip industry but it also constrained the LED industry into a space defined by existing platforms that are not optimized for their specific needs. This, however, is about to change: The industry now has reached momentum and critical mass to entice equipment providers into developing dedicated solutions for LED manufacturing. Dedicated solutions are emerging from existing and new players that will allow significant reduction in LED manufacturing cost through improved yields and throughput, Yole sums up.
With intensifying competition, players will differentiate themselves, and a broader variety of technology options for LED packaging will appear. The paramount aspect will remain cost effectiveness, expressed in $ per lumen.
The Yole report reviews the major challenges associated with the key LED packaging process steps; insights are shared on pros and cons of the various technology options and their future forecasted trends such silicon substrates, wafer level packaging, and COB.
More information can be found on https://www.i-micronews.com/reports/LED-Packaging-2011/14/103/
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