Supply chain maps a path to bringing down the cost of LED lighting (MAGAZINE)

Significant reductions could be achieved in the cost of producing LEDs, particularly if the supply chain can collaborate on an industry-wide roadmap, writes PAULA DOE of SEMI.

Content Dam Leds En Articles 2009 11 Supply Chain Maps A Path To Bringing Down The Cost Of Led Lighting Magazine Leftcolumn Article Thumbnailimage File
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It should be possible to achieve about a 70% reduction in production costs for LED lighting by 2015. This was one conclusion reached by attendees at two US Department of Energy (DOE) workshops that looked at ways to improve solid-state lighting (SSL) manufacturing (see “SSL Manufacturing workshops”). A big part of that potential decline is projected to come from a reduction of about 85% in the cost of the packaged LED, which now accounts for some 40% of the cost of the luminaire.

However, achieving those aggressive potential reductions will likely depend, in part, on sector cooperation on an industry roadmap—and a realistic common-cost model—so those within the supply chain can figure out where to best focus their efforts. Such pre-competitive collaboration has been used effectively by the semiconductor and flat-panel display industries in the past to drive more rapid improvement in process technology.

DOE recently released an initial roadmap for HB-LED and OLED manufacturing technology. The roadmap is based on the stakeholder discussions at the workshops, and represents industry consensus on the expected evolution of SSL manufacturing, best practices, and opportunities for improvement and collaboration. “We came to some consensus on where the principal costs are, which gives us a better sense of what needs work,” says Fred Welsh, Radcliffe Advisors, consultant to the DOE and one of the organizers.

DOE plans to update the roadmap next year, and also to continue work on developing a cost-of-ownership model, to better identify where the best gains from investments in improving manufacturing process would be. Such a model would allow the community to identify equipment and processes lying on the critical path and offer a more quantitative assessment of the beneficial cost impact of addressing each issue. The equipment and materials industry association SEMI, which has facilitated similar efforts in other sectors, also welcomes input on how it can best help support these efforts, says Tom Morrow, SEMI VP of global exhibitions and marketing.

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This article was published in the Nov/Dec 2009 issue of LEDs Magazine. To read the full version of this article, please visit our magazine page, where you can download FREE electronic PDF versions of all issues of LEDs Magazine. You can also request a print copy of LEDs Magazine (available by paid subscription) and sign up for our free weekly email newsletter.

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