Headlining the event as usual was Bob Steele of Strategies Unlimited, who presented his updated market forecast. Steele's estimate for the total market for packaged high-brightness LEDs in 2004 was $3.7 billion, an increase of 37% over the previous year. The figure does not include AlGaAs devices or LEDs manufactured and sold within China.
InGaN-based devices, comprising blue, green and white LEDs, were the dominant material. A quite surprising fact was that white LEDs accounted for exactly half of the total 2004 market. With a 58% share, the mobile appliance segment dominated the HB-LED market once again. Price erosion in this segment had a constraining effect on overall market growth, which was also affected by the weakness of the dollar against other relevant currencies.
Looking ahead, Steele said that growth will slow significantly as the mobile appliance market saturates. Even so, the market is set to move smoothly past the $4 billion mark in 2005, and growth will accelerate in 2007-9 as new applications such as automotive headlights and large-area LCD backlights start to kick in. The current forecast shows the market exceeding $5 billion in 2007 and topping $7 billion in 2009.
Mobile appliances dominate growth
Shipments of mobile phone handsets, the leading application for HB-LEDs, grew by 28% in 2004 to reach 670 million units. Around 75% of new phones had full-color displays, which utilize white LED backlights. Many handsets also have a secondary display, while there was a 3-fold increase in handsets with camera phones, some of which use white LED flash units.
Keypad backlights, mostly blue for the Asian market and white in Europe, represented 38% of the total mobile appliance market of $2.15 billion. This figure has tripled in 2 years from around $700 million in 2002.
Prices for keypad backlights have undergone severe price erosion, which has started to level off - Steele suggested this could be because prices can't go any lower without companies going out of business.
Signage represented 13% of the total HB-LED market in 2004, or just over $500 million, of which more than two-thirds was for full-color video displays. In terms of total area, there was 20% growth in displays for sports stadiums, retail and general advertising.
The automotive segment also represented 13% of the total, with interior lighting applications, such as instrument panel backlighting, being dominant. Europe has over 80% penetration, while adoption is taking off rapidly in Japan. Emerging opportunities include dome lights on the ceiling of the car, and backlights for LCD navigation system displays.
The situation is similar for center high-mounted stop lamps (CHMSLs): near saturation in Europe, rapid adoption in Japan. Only 4% of cars have LED stop-turn-tail lamps but growth is very high. The fastest growing application is in side mirror turn signal repeaters, with were used in more than 4 million from a total of 59.5 million light vehicles.
Although still only representing 5% (~$185 million) of the market, solid-state lighting represents the segment with the most rapid growth after mobile appliances. Most applications are for colored light, and range from very small (flashlights, reading lamps) to multimillion dollar projects.