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Drop in MOCVD spending drags LED equipment buy

Posted: 09 Jan 2012 ?? ?Print Version ?Bookmark and Share

Keywords:LED manufacturing? equipment spending? HB-LED?

Semiconductor Equipment and Materials International (SEMI) has forecasted an unfavorable year for the LED manufacturing equipment market. According to the global industry association, after posting a 36 percent increase in equipment spending last year, global spending on LED manufacturing equipment is seen to plunge 18 percent this year. However, LED manufacturing capacity is expected to improve by 27 percent from last year.

After several years of rapid capacity expansion driven by high-brightness (HB) LEDs used in TV backlighting applicationsreinforced by lucrative government incentives and economic development funding in Chinaa 40 percent decline in global metal-organic chemical vapor deposition (MOCVD) purchases this year will reduce overall LED equipment spending for the first time in more than five years, the report stated. However, spending for non-MOCVD equipment, particularly in lithography, etch, test and packaging equipment, will increase as manufacturers optimize their production lines and improve their product designs.

While HB-LED demand continues to grow in solid-state lighting, HB-LEDs used in LCD TV backlighting units (about 40 percent of the total HB-LED market) failed to reach growth expectations last year. Total TV unit sales missed growth targets, and the penetration of LED backlighting as part of total LCD TV unit sales did not reach the levels that many experts predicted. LEDs used in solid-state lighting, currently totaling about $2.5 billion, may exceed $30 billion by 2020, according to many estimates.

"Similar to other microelectronics industries, LED manufacturing capacity and technology investments will vary year-over-year, but will correspond with the long-term demand driven by key applicationsin LEDs, this will be primarily solid-state lighting," noted Tom Morrow, executive VP, emerging markets group at SEMI. "Future equipment and capital spending will drive LED cost reduction through larger wafers, automation and dedicated equipment specifically designed to improve LED manufacturing yield and throughput."

Regional equipment spending shows China continuing to lead, with an expected $719 million planned for the year, followed by Taiwan ($321 million), Japan ($300 million) and Korea ($260 million). Taiwan will continue to lead in capacity, at 25 percent of global LED capacity, followed by China at 22 percent. SEMI counted 29 new LED fabs last year. For 2012, it forecasts 16 new fabs coming online.

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