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LED TV backlight market value drops 18% YoY

Posted: 31 Aug 2011 ?? ?Print Version ?Bookmark and Share

Keywords:LED lighting market? high-brightness LED? TV backlight?

According to the LED research arm of TrendForce, the global market value of high-brightness LED this year reached only an estimated $9 billion instead of $10.6 billion, as previously expected. LEDinside stated that the measly YoY eight percent increase was due to the backlight markets weak demand and the plunge in LEDs average selling price, resulting in LED market oversupply.

TrendForce predicts that the excess supply situation is likely to remain, and in fact, if the inventory level continues to rise and the price declines more than expected, high-brightness LED backlight market value might decline further.

Although the market for high-brightness LEDs slightly increased in 2011, the market value for the TV backlight application merely approached $1.4 billion, with an 18 percent YoY decrease. The trend can be attributed to the enhanced light guide technology, resulting in a considerable reduction in the LED usage volume for TV backlight. As for the 42in TV specification, when Samsung launched its LED TVs in 2009, 360 LEDs were needed, but this year, the number averaged about 130 for standard LED TVs and 100 for the entry level�model.

Moreover, the unfavorable end-market sales contribute to the speedy downturn in LED price. As a result, despite the surging LED penetration rate for the TV application,�market value still suffers a setback. In 2012, South Korean panel manufacturers plan to launch entry-level LED panels to reduce cost and to boost sales. Such a move will further increase LED penetration rate, but it will also cause the LED usage volume to drop another 20?30 percent.

Brand vendors are increasingly requiring higher panel resolution for tablet PCs. This year, the amount of LED usage volume per tablet PC averaged 36?42, but the LED usage volume may double in 2012. Although the tablet PC shipment will likely exceed 500 million units in 2011, Apple iPad and iPad2 will account for most of them, LEDinside said. Currently, since Japanese manufacturers mainly supply Apples LED backlight demand, few makers in Taiwan are benefiting from the tablet PC fever.

In light of the weak backlight demand, the lighting market becomes the new source of revenue that underpins LED makers. For example, the electricity rationing in Japan has increased energy-saving awareness and demand for LED. LED makers that manage to break into the supply chain of the Japanese lighting market are able to deliver impressive revenues.

For instance, Roadmap for China Abolishing Incandescent Lamps (draft), recently published by the National Development and Reform Commission, proposes that the sales and imports of regular incandescent light bulbs be prohibited beginning October 1, 2012. Moreover, the Chinese government is about to announce the policy for the solid-state lighting industry as a part of the 12th five-year plan. It will also strive to increase the popularity of LED light products by enacting incentive and subsidy policies regarding criteria, purchase and energy-saving efficiency of LEDs. On the other hand, the bans against incandescent light bulbs will be enforced in areas such as Europe, North America, South Korea and Australia in 2012 that are expected to greatly benefit the global LED lighting market.

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 the high-brightness LED market value for continuous growth. However, oversupply caused by manufacturers significant MOCVD expansions since last year will most likely persist. The ASP of LED is expected to undergo a 20 percent decline in 2012 that will pose a challenge for LED makers in terms of technology advancement and cost competitiveness.

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