Structure Of The High-Brightness LED Industry Analyzed In New Strategies Unlimited Report

Dec. 5, 2005
For the 10-year period from 1995 through 2004, the high-brightness LED (HB LED) market exhibited a remarkable growth history, with an average annual growth rate of 46%, resulting in a market size of $3.7 billion in 2004. This growth was supported by the concomitant growth of the HB LED supply industry, both in terms of the organic growth of existing or "legacy" LED manufacturers, and in terms of new entrants to the market, most of which are located in Asia. In 2005, the number ofcompanies supplying HB LEDs at different levels of the vertical supply chain exceeds 100 worldwide.In a recently released report by market research firm Strategies Unlimited (High-Brightness LED Global Supplier Analysis, November 2005), it was noted that the HB LED market continues to be dominated by the largest companies, most of which have existed at least from the mid-1990s, if not much earlier. In terms of the $3.7 billion market for packaged HB LEDs in 2004, over 50% of the market is supplied by just the top five companies, and nearly three-quarters of the market is supplied by the top 10 companies (out of a total of 48 companies identified and profiled as packaged HB LED suppliers). A similar situation holds true for companies supplying epitaxial wafers and chips to the $890 million merchant market for these materials in 2004. Thus, the top three suppliers account for over 50% of the market, and the top 11 suppliers account for over 75% of the market (out of a total of 30 companies identified and profiled as supplying epitaxial wafers and/or chips). After 10 years of existence, the global HB LED industry is not highly integrated. Out of 74 companies analyzed the report, just 12 (16%) are completely vertically integrated, from epitaxial wafer and chip production through packaging. Of the remaining non-vertically integrated companies, 26 (35%) produce epitaxial wafers and/or chips only, while the largest number of companies, 36 (49%), produce packaged HB LEDs from purchased chips.In 2005, even as new suppliers enter the market, the number of established competitors is beginning to shrink, especially in Asia. Merchant Taiwanese chip suppliers Epitech and South Epitaxy merged in July 2005, and Epistar and UEC are expected to complete their merger by the end of the year. Other mergers and acquisitions are expected in 2006 and beyond. Overall, Asia remains the largest source of HB LED supply, accounting for 76% of the packaged HB LED market, and 57% of the merchant epitaxial wafer and chip market in 2004. According to Robert Steele, Strategies Unlimited's Director of Optoelectronics Programs and longtime LED market analyst, "in spite of some industry consolidation, we can expect to see new HB LED suppliers continue to enter the market, with either new packaging concepts or new device structures based on innovative technologies such as photonic crystals. Although it is more than 10 years old, the HB LED industry is far from mature, and new companies with new ideas will continue to help propel the industry to new frontiers in both technology and applications."High-Brightness LED Global Supplier Analysis, prepared in cooperation with YEBY Associates, provides detailed profiles of 74 companies that supply the worldwide HB LED market, with in-depth information on: company background; technology and products; manufacturing infrastructure; and markets and financial. In addition, summary information on the HB LED industry is provided, including market shares, geographic distribution of supply, and industry concentration. The report is available for immediate delivery from Strategies Unlimited for $4,250. More information on the report is available by contacting Tim Carli, Sales Manager, at +1 650 941-3438 ext. 23, by email at [email protected], or by visiting in 1979, Strategies Unlimited specializes in market research and strategic consulting directed at the optical networking, optoelectronic, and RF/wireless semiconductor industries. The company, based in Mountain View, California, is a research unit of PennWell Corporation. PennWell Corporation, founded in 1910, is a highly diversified media and information company providing authoritative publications, conferences and exhibitions, databases, information products and Internet-based services to strategic markets worldwide. The company publishes over 45 periodicals including Laser Focus World, Lightwave, and Solid State Technology. Its headquarters are in Nashua, NH, and Tulsa, OK, with remote offices and partners located around the globe.