Sharp slowdown in HB-LED market growth

Despite stronger-than-expected sales of mobile phones in 2005, the market for high-brightness LEDs grew just 8%.

Feb 17th, 2006
By Michael Hatcher in San Francisco

The market for high-brightness LEDs grew just 8% in 2005, as severe pricing pressure hit the mobile appliance sector.

Opening the Strategies in Light 2006 conference in San Francisco, industry analyst Bob Steele said that the market for packaged HB-LEDs is now worth $4 billion.

That represents a massive slowdown in annual growth from the historical average of nearly 50% seen over the past few years, and is largely the result of a stagnating mobile appliance market.

Despite sales of cell phones exceeding all expectations in 2005, excess capacity drove down keypad backlight selling prices by half, reported Steele.

Increased penetration of LED-based camera flashes used in phones and a 24% increase in the volume of chips shipped maintained the value of the market for HB-LEDs in mobile applications at just over $2 billion, similar to the 2004 figure.

But that figure will remain flat as the mobile sector becomes increasingly commoditized, with market growth now reliant on other applications.

LED-backlit notebook computers and televisions now appear to hold the key for future market growth, with new entrants such as the US company Luminous Devices supplying backlights for rear-projection TVs made by Samsung, Akai, HP, Sanyo and JVC.

Steele predicted a similar growth figure for this year, with an expected 10% increase to $4.4 billion.

He believes that LCD backlights and automotive headlamp applications will contribute meaningful revenues in the 2007-2008 timeframe.

• Mike Hatcher is the editor of compoundsemiconductor.net.

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