Taipei, Sunday, May 31, 2015 07:28 (GMT+8)
light rain shower
Taipei
26°C
Trends in the upstream LED industry
Jessie Lin, DIGITIMES Research, Taipei [Monday 9 July 2012]
Registration required (free) to purchase. Please sign in if you wish to continue.
The entire LED lighting supply chain can be divided into the following segments: rare earth, MOCVD equipment, sapphire ingots and substrates, LED chips, LED packaging, and LED lighting fixtures. This Digitimes Special Report focuses on the upstream segments including rare earth elements for producing phosphor powder material, MOCVD equipment (for manufacturing LED wafers), sapphire ingots and substrates. The upstream segments are important as they are the indicators for future developments of the industry.
Abstract
Trends in the upstream LED industry

The entire LED lighting supply chain can be divided into the following segments: rare earth, MOCVD equipment, sapphire ingots and substrates, LED chips, LED packaging, and LED lighting fixtures. This Digitimes Special Report focuses on the upstream segments including rare earth elements for producing phosphor powder material, MOCVD equipment (for manufacturing LED wafers), sapphire ingots and substrates. The upstream segments are important as they are the indicators for future developments of the industry.

Rare Earth

China's rare earth outputs account for more than 90% of total rare earth supplies in the world. In 2012, the government continues to implement measures to limit the exports of rare earths which has been causing the price of rare earths to increase significantly.

Rare earth is the main ingredient for phosphor powder, an important material for both fluorescent and LED lightings. The difference is that fluorescent lights use large amount of phosphor powder compared to LED lighting. Therefore, as the price of rare earth increases, the cost of producing fluorescent lighting products increases as well. Comparatively, LED lightings only uses a small amount of phosphorus powder and have only been slightly affected by the price increase of rare earths.

MOCVD

After booming demand for MOCVD equipment in 2010-2011, the order visibility in 2012 has been shorter because most LED chipmakers have enough capacity to meet demand. Therefore, Digitimes Research predicts global demand for MOCVD equipment in 2012 will be 275 units, a 60% decrease from 690 units in 2011.

China continues to dominate demand for MOCVD equipment in 2012 because some shipments of MOCVD equipment have been delayed to 2012 and some local governments have continued to provide subsidies for procuring MOCVD equipment. Hence, demand from China in 2012 is to account for 68% of global demand.

Digitimes Research predicts US-based equipment provider Veeco and Germany-based Aixtron will continue to dominate the market in 2012. The combined market share of the two firms in 2012 is expected to reach above 95% and in particular, Veeco's global market share is to reach 60%.

Sapphire

Sapphire ingots and substrates are important upstream materials for LED firms. Currently, most firms use LED epitaxial wafers made from sapphire substrates. Only a few firms adopt silicon (Si) or silicon carbide (SiC) substrates. Hence the price trend and market balance of sapphire substrates are also important indicators for the development of the LED industry.

For 2-inch sapphire substrates, the price stabilized in first-half 2012 at US$8-9/unit. The price is expected to remain steady in second-half 2012 because the current price is close to production costs and has no room for decreases even if there is an oversupply condition of sapphire ingots. However, patterned sapphire substrates (PSS) can help to increase the brightness of LED products effectively, hence the price of the product is likely to show a slight increase in second-half 2012.

Table of contents
Price: NT$48,000 (approx. US$1,685)

Taiwan server shipment forecast and industry analysis, 2015

RESEARCH EXTRAS | Apr 10, 15:57

The server market did not perform well in 2014 though rising demand from Internet data centers (IDCs) and China brands helped global shipments (measured by motherboards) grow 7.1% to 10.4 million. Using this as the base for growth, in 2015 the market is expected...

How China is shaping the LTE/TD-LTE market in 2015

CHINA SMARTPHONE | Apr 9, 15:42

Digitimes Research estimates that the global LTE market doubled in size to 445 million users in 2014 and we further forecast that annual growth in the number of LTE users will remain above 70% between 2015-2016, with the overall market reaching 1.466 billion...

Taiwan LCD TVs – 1Q 2015

TAIWAN DISPLAY SYSTEM | May 22, 15:51

Taiwan's LCD TV makers saw strong seasonal impacts in the first quarter of 2015. Shipments to North America saw a particularly sharp decline as a result of reduced procurement from Mexico and major client Toshiba quitting the North America market.

Taiwan handsets – 1Q 2015

TAIWAN MOBILE DEVICE | May 15, 15:58

Most of Taiwan's handset makers felt strong seasonal effects in the first quarter. Foxconn suffered particularly as a result of drastic drops in orders from Sony Mobile and Microsoft Mobile.

China smartphone market and industry – 1Q 2015

CHINA SMARTPHONE | May 13, 10:56

According to Digitimes Research's survey of the Mainland China smartphone supply chain, as well as other relative vendors, increased demand for Apple's new device models, Mainland China's high-end smartphone models experienced lackluster sales in the first quarter...

Taiwan server shipment forecast and industry analysis, 2015
2015 global tablet demand forecast
Demand and supply trends in the global sapphire industry, 2014-2015
  • Wireless broadband developments in Southeast Asia markets

    As of 2013, the 10 ASEAN nations had a total of over 700 million mobile subscriptions, with the CAGR from 2003-2013 reaching 24%. This Digitimes Research Special Report analyzes the various mobile broadband markets in ASEAN and looks at the respective trends in 4G LTE development for those markets.

  • 2015 global tablet demand forecast

    This Digitimes Research Special Report provides a 2015 forecast for the global tablet market and analyzes the strategies of key market players such as Google, Apple, Intel, and Microsoft.

  • 2015 China smartphone panel trend forecast

    This Digitimes Research Special Report analyzes the strategies of key China-based major panel makers BOE, Tianma and IVO for attacking the different market segments through technology and pricing, and their relationship to local vendors Huawei, Lenovo, ZTE, Xiaomi and Coolpad.