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11 January 2013

LED production value to grow by 12% in 2013

Global LED production value is expected to hit US$12.4bn in 2013, representing a 12% year-on-year growth, according to a report from LEDinside (the LED research division of TrendForce).

Handset applications and LED lighting product demand are expected to be the key sales drivers to spur corresponding LED demand. Yet, given that the oversupply issue will not be eased in the near term, LED manufacturers are expected to aggressively deploy the technology into new applications as well as consolidating with peers in order to secure sales and enhance profitability.

Handset and tablet PCs are identified as being a new sales driver for LEDs. Japanese and Korean vendors have started integrating 4.75-inch panels into their established technology portfolio in panel production, with the Japanese vendors in the lead through the introduction of smart-phones featuring a  5-inch high-resolution panel with 443ppi resolution.

LEDinside estimates that LED market value for smart-phone applications will hit US$710m in 2013, based on its forecast of an estimated 870m smart-phone shipments. Thanks to the consistent migration towards bigger screen size with higher resolution, some smart-phones are expected to increase the LED requirement for backlighting from 6-8 up to 10 (per screen), which would represent sharp growth.

Furthermore, increasing demand for tablet PCs and handsets with bigger panel sizes and higher resolution is expected to fuel corresponding LED sales growth. Demand for camera flashes or other types of flashlight in handsets will also drive the upwards sales trends as camera specifications improve.

Large LCD TVs

LEDinside further anticipates that the volume of LEDs for use in TV backlighting applications will grow by 30-50% during 2013, driven by TV vendors’ demand for brighter and higher-resolution panels. The growth is expected to compensate the current weak LED backlight demand amid negative sales impact from a generally slow economy and high panel inventory held within the Chinese market.

With the LED backlight market expected to expand in 2013, the rising market share of TV sizes ranging from 50-inches through 60-inches should spur corresponding LED demand. Most current large-size (50-60-inch) edge-lit LED TVs incorporate an average of 130-150 LEDs. The technological advances of LED and LGP (Light Guide Plate) technology, which in turn requires fewer LEDs, is not expected to significantly impact negatively on overall LED demand as the [expected]  increase in shipments of large-size LED TVs will continue to drive the demand growth.

Also, new ‘direct’-type and ‘slim direct’-type LED TV models are expected to be available on shelves in 2013 with a secured market share. Vendors from China, Japan and Taiwan have already launched ultra-high-definition ‘4K2K’ panels (actually with 3840 x 2160 pixels) recently, in order to please consumers with better image quality in larger panel sizes.

Overall, LED lighting price competition will continue throughout 2013. “Demand for LED lighting is consistently growing worldwide, despite some temporal drawbacks such as the European debt crisis and the recent election of new Chinese leaders that discourage large-scale projects,” comments LEDinside. “In Europe, demand for LED lighting has started to emerge since the European Commission banned the sale of incandescent light bulbs after the end of 2012. In Taiwan, more LED street-lamp developments are also bringing new sales to local vendors.”

While demand is picking up generally, LEDinside voices concerns about the sector’s relatively lean profitability. The report concludes, “Vendors are believed to be launching more competitive solutions to address market trends on the one hand while deploying into other areas on the other hand, in an attempt to offset the fierce price competition pressure. Besides the handheld devices markets, other sectors of interest include domestic and industrial lighting, plant lighting, freezer lighting.”

Tags: LED market


By Matthew Peach, a contributing editor to Semiconductor Today

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