The primary reason, said Jung, is the strong demand for white and blue keypad backlighting in mobile phones. This represents the fastest-growing application sector in terms of units shipped - keypad backlights, for example, typically require 8-12 diodes.

However, falling prices are causing problems. "Price slide is a serious business issue," said Jung. While production volumes increased rapidly last year, severe competition in the sector saw prices drop more than 60% from 30 cents per blue keypad backlight LED to just 11 cents by the end of the year. In China, according to Jung, this figure has dropped as low as 7 cents.

Another key trend in the past year was the increasing use of LEDs for camera flash applications. Jung said that the proportion of camera-enabled phones sold will increase from an estimated 17% of total handset sales in 2003 to reach 28% this year. "In 2005, more than 90% of phones in Japan and Korea will be equipped with a camera," he added.

The development of more advanced light sensors used in cameras will also have an effect on the HB-LED market. Whereas a 300 kilopixel CCD sensor requires a minimum flash luminance of 1-2 lux at a distance of 3 m, a 1 megapixel sensor will need a 5 lux flash to illuminate the same distance. As consumers begin to demand more advanced camera performance from their phones, so the demands on LED performance will increase.