iSuppli projects LED shortage for LCD TVs, notebook displays, and monitors

Date Announced: 02 Jun 2010

Amid soaring demand from televisions, mobile computers and desktop monitors, LEDs used for backlights in large-sized LCDs are suffering a tight supply situation that will last until the near the end of 2010, according to iSuppli Corp.

Shipments of large-sized LCD panels with LED backlights are forecasted to reach 276.7 million units in 2010, up a dramatic 134.9 percent from 117.8 million in 2009. In 2010, LED backlights will be used in 43.1 percent of all large-sized LCD panels, which mainly are used in LCD-TVs, mobile computers and desktop monitors. LED backlights are also starting to see increasing use in electronic signage, industrial and medical applications.

LED backlight shipments will rise to 477.6 million units in 2011 and continue to expand to 817.9 million units in 2014. By then, LED backlights will have penetrated 87.7 percent of the total large-sized LCD market.

Usage of LED backlighting is soaring due to its substantial advantages compared to the older Cold Cathode Fluorescent Lamp (CCFL) technology, including slimmer design, reduced weight lower power consumption and mercury-free attributes for a greener, more environmentally friendly solution.

The attached figure presents iSuppli’s worldwide forecast of unit shipments of large-sized LCD panels with LED backlighting systems. iSuppli defines large-sized LCD panels as those having a diagonal dimension of 10 inches or more.

This rapid rise in shipments has spurred supply constraints for LED backlights.

“There have been mounting concerns in the industry about supply constraints for LEDs and light guide plates, two of the major components for LED backlights,” said Sweta Dash, senior director for LCD research at iSuppli. “Changes in light guide design, constraints in raw materials and high expansion costs are limiting capacity.”
The other major constraint, Dash said, revolves around the challenges faced by Metal Oxide Chemical Vapor Deposition (MOCVD) reactors—the key equipment for making LED chips—to keep up with demand. As a result, tight supply of LED chips is expected until the end of the year.

LED supply inequality

The LED shortage is not expected to affect all panel makers equally.
“By the second half of this year, a clear distinction will emerge between the ‘haves’ and ‘have-nots’, among the panel suppliers” Dash predicted. “Those panel makers that have their own internal manufacturing of LEDs will have sufficient supply in 2010, while those that don’t will encounter constraints.”

For example, South Korean LCD panel manufacturer Samsung has established Samsung LED, which provides an internal source for LEDs for the company’s manufacturing of LCD panels.

Pump full of LED

To address the availability constraints, LED suppliers are shifting production to 4-inch and 6-inch wafers and away from older 2-inch wafers. This will cause production capacity of LEDs to rise. However, LED makers will need as long as one year to adjust to the change in production technology.

Meanwhile, panel suppliers are expected to offer newer backlight designs that require fewer LEDs per panel. Most panel suppliers expect the number of LED chips per television panel to decline by 30 percent or more at the end of 2010 compared to one year earlier.
LCD panel suppliers also are set to become more vertically integrated in order to better control the LED backlight supply chain. Furthermore, branded TV manufacturers will be partnering with module manufacturers to gain their own backlight solutions and to achieve product differentiation.

“By the end of 2010, the supply situation will improve as capacity rises and new backlight designs require fewer LEDs per panel,” Dash said.

LED rises

The adoption of LED backlights in LCD-TVs will rise to 18.4 percent in 2010, up from 3.0 percent in 2009, spurred by the push among various TV brands to introduce LED-based TVs. Adoption rates also will climb for notebook panels, rising to 88.0 percent this year, up from 62.6 percent in 2009. By 2012, LED backlights will be used by 100 percent of notebook panels.

The adoption rate for LED backlights for desktop PC monitors in 2010 will rise to 20.8 percent, up from 1.7 percent in 2009.

Learn more about LED supply and demand dynamics in Dash’s LCD report: LED Backlights Reshaping the Large LCD Industry.

Contact
310-524-4007

E-mail: info@isuppli.com

Web Site: www.isuppli.com

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