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LED packaging to experience year upswing, says Yole

Posted: 16 Jan 2013 ?? ?Print Version ?Bookmark and Share

Keywords:LED manufacturers? Stock Keeping Unit? phosphors? package substrate? packaging?

According to analysts at Yole Dveloppement, despite challenges to reduce costs, LED materials will see a boom over the next five years.

"Technological developments are also impacted by the quest for cost reduction, and LED manufacturers are now searching for equipment and/or materials with the right mix between cost and performance", said Pars Mukish, Technology & Market Analyst, LED at Yole Dveloppement. Equipment and materials suppliers are proposing more and more equipment and materials that fit these requirements, i.e. laser-based dicer, low-cost ceramic package substrate, etc.

The LED packaging materials market will enjoy a 20 per cent CAGR during the period 20122017, driven primarily by package substrate and phosphors, says the report, rising to nearly $900M by 2017. Despite strong price pressure, the associated market for LED phosphors will also enjoy double-digit growth, with a CAGR of 20 per cent during the period 2012 C 2017.


Figure 1: LED Packaging material revenue (2010-2017)
Source: LED Packaging 2013 report, Yole Developpement, January 2013.

Depending on the device type, packaging can represent 40 to 60 per cent of LED total cost. As such, packaging represents the single-largest opportunity for cost reduction, which is required in order for the general lighting market, says the report. However cost reduction is not going to come from standardisation as there is a wide range of packaging approaches.

The profusion of styles is inhibiting LED manufacturing cost reduction by multiplying the Stock Keeping Unit (SKU), thus preventing standardisation of the manufacturing process and the associated economies of scale, says the report. As a result LED manufacturers are reacting by developing new manufacturing philosophies/concepts, such as simplifying and standardising elements whenever possible, and push differentiation as far downstream as possible in the manufacturing process.

At the LED packaging equipment level, growth will return for the next three years, say the researchers. "The LED packaging equipment market, which stagnated in 2012 due to industry oversupply, is growing again and will peak at nearly $650M by 2016", said Pars Mukish.

LED packagers are still using mostly retrofitted equipment from the IC industry and relying on existing technology solutions and materials to improve LED cost of ownership and performance. While this has allowed LED manufacturers to benefit from decades of R&D, and investments in the IC industry, it also limits the industry to a space defined by existing technology platforms which are not optimised to the specific needs of LEDs. However, the industry has gained enough momentum in 2011/2012 to entice equipment and material providers into developing dedicated solutions for LED manufacturing.

Many dedicated solutions emerging from both existing and new players will allow significant reduction in LED manufacturing cost through improved yields, throughputs and material efficiency.

- Nick Flaherty
??EE Times

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