LED surplus to expand through 2012

Dec. 20, 2010
Date Announced: 20 Dec 2010 Austin, Texas – IMS Research’s latest Quarterly GaN LED Supply and Demand Report features a brand new LED supply and demand model built by a new global team of authors with an important outcome – LED supply growth is significantly outpacing demand growth creating a widening surplus and increasing pricing pressure.According to IMS Research SVP Ross Young, “LED capacity is rapidly expanding on China’s MOCVD stimulus program, ramping of recently installed tools and improving yields on existing tools. On the other hand, a significant 2H’10 reduction in LEDs per panel in TVs and monitors is causing demand to grow slower than expected, leading to reduced fab utilization and increased pricing pressure. Because of China’s MOCVD subsidies, MOCVD shipments and supply growth are not expected to slow down in 2011 leading to an accelerating supply imbalance that is expected to widen through 2012. The oversupply will be constrained by sapphire substrate and TMG supply however.”The latest report, which also reveals each panel suppliers’ quarterly panel shipments, LED panel shipments, number of LEDs per panel and LED consumption at every size, resolution and refresh rate, shows that the weighted average number of edge-lit LEDs per panel fell by around 30% in both TVs and monitors from Q2’10 to Q3’10 as panel and backlight suppliers further optimize their designs to reduce costs. Improvements in lightguide and LED efficiencies and optical film optimization caused the reduction which is contributing to a growing LED over-supply.According to IMS Research SVP Ross Young, “We found that the weakness in LEDs in Q3’10 was more a result of the large reduction in LEDs per panel than the slowdown in LED TVs as LED panel shipments grew twice as fast as LED chip consumption from Q2’10 to Q3’10. If LED inventory was accounted for at backlight and panel manufacturers, this disparity would be even greater. We are also seeing that financial analysts are significantly overstating the number of LEDs per TV panel in their models.”The most recent issue also tracks LED consumption by panel supplier in the notebook, LCD monitor and LCD TV markets where it was found that LG Display consumed the most LEDs in notebooks in Q3’10 and is expected to lead in Q4’10. In monitors, LG also led in Q3’10, but Samsung is expected to lead in Q4’10. In TVs, Samsung led in Q3’10 and is expected to lead in Q4’10 as well. Samsung led in total LED consumption in Q3’10, is expected to lead in Q4’10 at over 2B LEDs while LG Display is expected to lead for all of 2010 at nearly 6B LEDs consumed. The report indicates that the LED backlighting market is expected to rise 98% to $6B in 2010, accounting for 71% of the 2010 high brightness (HB) LED market, up from 63% in 2009. It also shows that lighting revenues are expected to overtake TV revenues in 2015 and become the single largest LED category.IMS Research’s 227-slide Quarterly GaN LED Supply and Demand Report also tracks and forecasts LED shipments, ASPs and revenues through 2015 in numerous other segments besides TVs, notebooks and monitors including: * General lighting * Flashlights/architectural * Automotive interior * Automotive exterior * Signage * Mobile phone backlights * Mobile phone keypads * Mobile phone flash * DSC/DVC Flash * Other small/medium and large-area panelsIn addition, this report tracks LED supply in detail revealing each LED manufacturers’ MOCVD installations and wafer capacity, die capacity, yielded die capacity and binned die capacity through Q1’12 in Excel Pivot Tables.IMS Research’s Ross Young will be presenting additional findings from this and other LED-related reports at the upcoming SEMI ISS Conference on January 11th. For more information on this report or other LED-related reports and services, please contact [email protected] IMS ResearchIMS Research is a leading independent provider of market research and consulting to the global electronics industry. The company’s headquarters is in the UK, with offices in the US, China, Japan, South Korea and Taiwan. IMS Research regularly publishes detailed research on the LED, display and lighting markets.

Ross Young 512-302-1977

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