According to the DisplaySearch Quarterly LED Supply/Demand Market Forecast Report, LED lighting will capture the lead by 2014, as demand for LEDs in LCD TV backlights falls. This drop is expected due to a decrease in the number of LED packages per set, a result of efficacy enhancements and cost reductions.
“The market for LED backlights continues to grow as manufacturers leverage the technology for large display applications like notebooks, monitors, and TVs,” noted Leo Liu, Senior Analyst at DisplaySearch. “In addition, there are a growing number of emerging applications for LEDs, such as lighting, signal, and automotive applications.”
Currently, LED backlights are used in all small/medium LCDs, and LED penetration in mobile PCs is nearly 100%. Penetration of LEDs in LCD monitors and LCD TVs continues to grow, while the number of LED packages per set is decreasing. After more than doubling to 12.9 in 2010, the average number of chips per set is increasing more slowly, and is expected to peak at 15.1 in 2012. This is driven by the increasing efficacy of LEDs, even as the cost per chip decreases. This virtuous cycle drives LED penetration higher in LCD backlights, as well as illumination.
The LED lighting penetration rate in 2010 was 1.4%, and is forecast to reach 9.6% in 2014. In terms of LED lighting, spotlights and LED street lights are forecast to have higher penetration in lighting due to government incentive programs like the 12th Five Year Policy in China, as well as growth in commercial applications. In addition, LED bulbs and fluorescent tubes are growing in Japan due to government incentive programs (Eco-Point) and energy consciousness.
Quarterly chip supply will nearly double from the beginning of 2010 to the end of 2011, as both existing and new suppliers ramp up MOCVD lines. In Q1’11, Samsung and LG were the top two LED suppliers in terms of 500 x 500 µm chip size. However, led by Epistar in the #3 position, Taiwan will pass Korea as the largest source of supply in 2011. The tight supply situation experienced in 2010 has turned into an oversupply, as chip production has increased while LED TV penetration did not grow as fast as expected, reaching only 21% in 2010.
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