Nichia dominates $5.2 billion HB LED market

USA: In a groundbreaking effort, IMS Research has released the first market research report characterizing the supply side of white and RGB LED production used for high brightness (HB) LEDs.

HB LEDs, including GaN and InGaN, have been experiencing record breaking growth from early 2009 as a result of the rapid shift to LEDs in notebook displays. While this growth continues to accelerate, other markets are also increasingly migrating to LEDs such as signaling, very large outdoor displays, digital billboards, personal lighting, automotive and industrial.

Table 1 – 2009 Top 5 LED Manufacturers by In-Spec Die Revenue and ShareSource: IMS Research

In addition, LEDs are enabling the solid state lighting to penetrate the general lighting market. Furthermore, the LCD TV market is now rapidly shifting to LEDs due to their improved performance, superior form factor and lower power. As a result, TVs should become the #1 market for HB LEDs in 2010 creating a supply shortage.

Table 2 - 2009 Top 5 LED Manufacturers by In-Spec Die and ShareSource: IMS Research

The report forecasts the extraordinary growth in large area display backlights by application and shows the capacity, yielded production and in-spec (binned) LED dies on a quarterly basis by LED supplier. By the end of 2009, there were 1,413 reactors at 75 manufacturers with a capacity of 188 billion die/year.

Barry Young, IMS Research Senior Consultant and Managing Director of OLED Association, the author of this report, said: “Demand for HB LEDs is forecast to grow by 61% in 2010 and supply is unlikely to keep up, creating an opportunity for new manufacturers and new tool makers.”

Additional findings of the report include:
* A projected 2010 shortage of 12-14 billion in-spec (binned) die, with the shortage projected to continue well into 2013.

* 2010 MOCVD reactor forecast of 348 units with an additional 195 to 240 reactors necessary to meet demand, resulting in a total potential market of 588 reactors.

* This potential shortfall in supply is putting pressure on both the tool suppliers and the LED manufacturers to improve yields (or reduce the binning specs), increase capacity and speed up tool production.

* Nichia has a dominant position with a 42 percent share and over $2 billion in in-spec (binned) die revenues as shown in Table 1 due to their technical and IP leadership in the white LED market. Cree’s share has surged to 11 percent due to its strong focus on the rapidly growing solid state lighting market.

* 34 billion in-spec (binned) die were produced with Nichia again in a leadership position as shown in Table 2. Epistar was #2 followed by Samsung LED Company, which vaulted to #3 as a result of strong demand from Samsung’s TV business, Cree and Show Denko.

* By region, as shown in Table 3, Taiwan leads in HB LED production with a 37 percent share followed by Japan and Korea.

Table 3 – 2009 Regional LED Production (In-Spec Die) and ShareSource: IMS Research