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21 January 2009


LED market to grow 2.9% in 2009, aided by LCD-TVs

After 10.8% growth in 2008, the LED market is still expected to grow by 2.9% in 2009, aided by rising demand from LCD-TV makers, according to market research firm iSuppli Corp. LEDs therefore provide a rare growth opportunity amid sharp revenue declines in most other electronics component categories.

In contrast, the overall semiconductor market is set to decline by 9.4% in 2009. “LEDs are forecast for growth this year—a highly unusual item in our semiconductor forecast, given that almost all other components will suffer revenue contractions in 2009,” says Dale Ford, senior VP, market intelligence services, for iSuppli.

“Of the 12 major semiconductor categories tracked by iSuppli in its Application Market Forecast Tool (AMFT), nine are expected to suffer revenue declines in 2009—ranging from memory chips, to logic ICs, to power transistors,” he adds. “Although a 2.9% increase is only a moderate rise by the standards of the semiconductor industry, any revenue growth at all this year will be a remarkable accomplishment.”

The LCD-TV market in 2009 will consume $163m worth of LEDs, up 221.9% from $51m in 2008, reckons iSuppli. By 2012, LCD-TV LED revenue will grow almost nine-fold from 2009 to $1.4bn.

LCDs are a transmissive display type, so they do not generate their own light and hence need a separate backlighting illumination source. Traditionally, most have used cold-cathode fluorescent lamps (CCFLs) as the backlight. However, the declining prices of LEDs and newer higher-brightness LEDs are making them a viable competitor to CCFLs for backlighting LCDs in TVs. The price premium for 40-42” LCD TVs using LEDs now is as little as $200-500 compared to CCFL alternatives, estimates Riddhi Patel, principal analyst, TV, for iSuppli. While the overall mood of TV makers at the 2009 Consumer Electronics Show (CES) in Las Vegas earlier this month trended toward gloom, there was some optimism regarding the use of LED backlighting in new LCD-TVs.

At CES, some premium LCD-TV brands (including Samsung and Sony) showed new lines of LED-equipped sets, which are expected to be introduced in the June timeframe. Meanwhile, second-tier brand General Electric (GE) sees LED backlighting as a chance to carve out a new market niche. “GE, in combination with Tatung, have entered a joint venture to produce LED-based LCD TVs, and to try to do what Westinghouse did a few years ago, when it came into the market with lower-priced LCD TVs—opening up the market for value brands,” Patel said. “As more LED-backlit LCD-TV brands enter the market, competition will intensify and prices will decline.”

“One positive message was issued by LCD-TV makers at CES: LED backlighting and thinner form factors represent the future of the market,” says Patel. “These two things go hand in hand, with edge-mounted LED-backlight systems enabling thinner sets, which are more attractive to consumers.”

LED-backlit LCD TVs also consume less electricity than their CCFL-equipped counterparts. “A majority of LED-backlit LCD TVs comply with Energy Star requirements,” Patel notes. “This is an attractive feature for consumers, who have come to view the Energy Star label as a guarantee of greenness and reduced energy costs.”

However, while the energy consumption and form-factor benefits of LED backlighting are unquestioned, there is some debate over how much the technology actually improves the image on LCD TVs.

Most of the current LED-equipped LCD TVs use edge-mounted designs that place the diodes at the borders of the display. This allows for the thinner form factors that consumers appreciate, but it does not provide any major improvement in contrast ratios (the ratio of the luminance of the brightest color to that of the darkest color that a TV can produce), according to Sweta Dash, director of LCD research for iSuppli. TVs with superior contrast ratios get rid of excess off-state light when a LCD pixel is turned off, delivering a better picture. Using an edge-mounted LED backlighting design in a large-sized LCD TV yields no improvement in picture quality and the color gamut of the display is actually less than when using a CCFL, says Jagdish Rebello, director and principal analyst for LED research at iSuppli.

An alternative approach to using LEDs in LCD TVs, the full-array backlight, provides sharp improvements in contrast ratio, according to Dash. “The highest-quality images on LCD-TVs will be on sets that use the full-array backlight approach because it provides the best dynamic contrast ratio, which in turn improves perceived image color and sharpness,” adds Randy Lawson, senior analyst, digital TV semiconductors for iSuppli. iSuppli expects that, in the coming years, LCD-TV makers will offer a mix of thin form-factor edge-mounted designs and high-image-quality full-array alternatives.

Another aspect of image quality hinges on the type of LEDs used in LCD TVs. Most LED-backlit LCD TVs currently employ white LEDs, rather than the more costly red, green, blue (RGB) alternatives. RGB LEDs provide a superior color gamut, providing richer and more varied colors in TV sets. “RGB LEDs are tidy and are the ideal best solution for LCD backlighting,” Patel says. “But pricing is still too high and these won’t show up in LCD TVs in significant numbers until 2010,” he concludes.

See related items:

HB-LED lighting market to grow to $1.65bn in 2012

Market for packaged LEDs in solid-state lighting to more than triple by 2012

LED market growth to accelerate to 12% in 2008

LEDs to replace CCFLs in notebook-PC backlights

Search: LEDs LED market LCD-TV


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