25 August 2011
HB-LED market to grow just 8% to $9bn in 2011 instead of $10.6bn
The high-brightness (HB) LED market is forecasted to grow just 8% year-on-year to $9bn in 2011 instead of the previously expected $10.6bn, according to market research firm LEDinside (an LED research division of TrendForce). Contributing factors include: weak demand in the backlighting market, and the plummeting LED average selling price (ASP), resulting in over-supply in the LED market.
The over-supply situation is likely to remain unchanged in the short-term, reckons TrendForce. In fact, if the inventory level continues to rise and the price declines more than expected, then the HB-LED backlight market might decline further.
According to TrendForce, despite the fact that the overall HB-LED backlight market has increased slightly in 2011, the LED market value for the TV backlight application will reach just $1.4bn, down 18% year-on-year. The trend can be attributed to the enhanced light-guide technology, resulting in a considerable reduction in unit volume LED usage required by TV backlighting.
For the 42-inch TV specification, when Samsung launched its LED TVs in 2009, 360 LEDs were needed, but in 2011 this number averages about 130 for standard LED TVs and 100 for the entry-level LED TV model. The advance in technology has largely compromised LED usage for the TV backlighting application.
Moreover, the unfavorable end-market sales contribute to the speedy downturn in the LED price. As a result, despite the surging LED penetration rate for the TV application, the market value is still suffering a setback.
In 2012, South Korean panel makers plan to launch entry-level LED panels, in the hope of reducing their cost and driving sales. Such a move should further increase the LED penetration rate, but will also cause LED usage volume to drop another 20–30%, reckons LEDinside.
For tablet PCs, brand vendors are increasingly requiring higher panel resolution; in 2011 the LED usage volume per tablet PC is averaging 36–42, but this may double in 2012. Although tablet PC shipments will likely exceed 50 million units in 2011, the Apple iPad and iPad 2 account for most of them. Since Apple’s LED backlight demand is currently supplied mainly by Japanese manufacturers, few Taiwanese makers are benefiting from the tablet PC boom.
In light of weak backlight demand, the lighting market is becoming the new source of revenue underpinning LED makers, says LEDinside. For example, electricity rationing in Japan has increased energy-saving awareness and demand for LEDs, and LED makers that manage to break into the supply chain of the Japanese lighting market can deliver impressive revenues.
For instance, the draft Roadmap for China Abolishing Incandescent Lamps (published recently by The National Development and Reform Commission) proposes that the sale and import of regular incandescent light bulbs will be prohibited from 1 October 2012. Moreover, the Chinese government is about to announce the policy for the solid-state lighting industry as a part of its 12th five-year plan. The government aims to increase the popularity of LED light products by enacting incentive and subsidy policies regarding criteria, purchase and energy-saving efficiency of LEDs. Meanwhile, bans on incandescent light bulbs will be enforced in regions such as Europe, North America, South Korea and Australia in 2012, which should greatly benefit the global LED lighting market, reckons LEDinside.
TrendForce believes that the delayed demand for end-market applications will likely pick up in 2012 and 2013. In addition, the rising popularity of LED lighting products will drive continuous growth in HB-LED market value, the firm believes. However, the over-supply caused by manufacturers’ significant expansions in metal-organic chemical vapor deposition (MOCVD) reactor capacity since 2010 will most likely persist. The LED ASP is expected to fall 20% in 2012, posing a challenge to LED makers in terms of technology advancement, speed and cost competitiveness, the market research firm concludes.