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Low backlight demand pulls GaN LED market

Posted: 24 Jan 2012 ?? ?Print Version ?Bookmark and Share

Keywords:GaN LED? lighting market? backlight?

IMS Research has released the details of its recent GaN LED market report. According to the market research firm, the market is seen to have dipped six percent last year after growing 60 percent on the year prior. However, the GaN LED market is expected to recover, enjoying annual growth each year from 2012-2015, including double-digit growth in 2013 and 2014 as the lighting market accelerates, noted IMS.

The decline, indicated IMS, can be attributed to a widening surplus that resulted in significant pricing pressure as supply grew nearly three times faster than demand from 2010-2011, depressing LED factory utilization levels. The LED surplus rose from a relatively healthy seven percent in 2010 to 45 percent last year and is predicted to widen further in 2012.

With both panel shipments and LED penetration below expectations and average LED prices for backlighting falling 34 percent on a volume-weighted average basis on depressed utilization, backlighting revenues fell 13 percent to $4.8 billion. Average selling prices (ASPs) for certain backlighting markets were down as much as 45 percent last year, hence backlighting fell from 64 percent of GaN LED revenue in 2010 to 59 percent last year and is likely to continue falling as the backlight markets become saturated and the lighting market accelerates.

LED revenue for TVs is expected to fall five percent last year to $1.9 billion as penetration is expected to reach only 39 percent, below the previous estimate of 43 percent.

GaN LED market

After growing 60 percent in 2010, the GaN LED market is expected to fall six percent last year.

However, the 2012 market is expected to grow five percent but remain below 2010 levels. Backlighting is expected to be flat due to slower unit growth and price reductions, while lighting is expected to rise 30 percent as LED lamp penetration jumps while prices continue to fall.

Lighting revenue is expected to overtake TV revenue for GaN LEDs this year, earlier than previously predicted. This is due to the increasing LED lighting demand (as a result of lower pricing) while LED demand for TVs falls (due to the lower-than-expected penetration) along with the use of low-cost direct LED backlights in developing markets.

Compared with conventional edge backlights, low-cost direct LED backlights use about half the LED die area. This is due to significantly reducing the brightness specification, along with adopting a thicker form factor that allows wide-viewing-angle packages to be adopted, which further reduces the number of LEDs required. While the adoption of these new low-cost direct-type backlights will narrow the cost differential with CCFL LCD TVs, the thicker form factor and reduced brightness capability will narrow their appeal, stated IMS.

The lighting share of the GaN LED market is expected to surge from 21 percent in 2011 to 49 percent in 2016, with lighting LED revenue expected to grow more than 300 percent and units expected to grow more than 1500 percent in this period, IMS added.

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