Taipei, Tuesday, May 31, 2016 12:25 (GMT+8)
mostly cloudy
Taipei
32°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)
Realtime news
  • Computex 2016: ARM announces Cortex-A73 CPU and Mali-G71 GPU

    Before Going to Press | May 30, 22:00

  • Computex 2016: ASE to showcase SiP, and MEMS and sensor solutions for smart living applications

    Before Going to Press | May 30, 21:35

  • Anji Technology looks to growing PV demand in Taiwan

    Before Going to Press | May 30, 21:23

  • Elan obtains fingerprint sensor orders from first-tier notebook firms

    Before Going to Press | May 30, 21:23

  • Teco Electric & Machinery poised to compete for installing 2 5MW offshore wind turbines, says EDN

    Before Going to Press | May 30, 20:58

  • Apple to enhance effectiveness of new iPhone sound and speakers

    Before Going to Press | May 30, 20:56

  • Digitimes Research: Vizio launches LCD TVs without TV tuners

    Before Going to Press | May 30, 20:55

  • Gaming monitor market to see growing competition between Asustek, BenQ and TPV

    Before Going to Press | May 30, 20:51

  • Oppo developing foldable-screen smartphones

    Before Going to Press | May 30, 20:43

Pause
 | 
View more

Taiwan server shipment forecast and industry analysis, 2016

RESEARCH EXTRAS | Apr 1, 15:47

Strong demand from the cloud computing market helped Taiwan's server shipments grow 12.5% on year to break 10 million units in 2015, accounting for 90.7% of worldwide shipments and the percentage is expected to grow to 91.1% in 2016. This Digitimes Research Special...

China smartphone touch-panel industry 2016 forecast

CHINA SMARTPHONE | Feb 6, 17:23

In 2016, China's smartphone panel capacity is expected to increase steadily, with BOE and Tianma expanding 6G capacity and GVO and Truly Optoelectronics increasing their share of handset panel production. This Digitimes Research Special Report analyzes the key...

China smartphone AP shipments – 1Q 2016

CHINA SMARTPHONE AP | May 27, 16:04

First-quarter 2016 smartphone AP shipments in China were slow with a sequential decrease of 16.9%.

Taiwan handsets – 1Q 2016

TAIWAN MOBILE DEVICE | May 26, 16:04

Taiwan's handset brand vendors and ODMs both saw sharp declines in their shipments in the first quarter of 2016. The brand vendors' shipments will improve in the second quarter due to launches of new models, but the ODM shipments will drop further.

China smartphone market and industry - 1Q 2016

CHINA SMARTPHONE | May 25, 17:39

Total smartphone shipments by China-based vendors reached 128.6 million units in the first quarter of 2016, down 20.2% on quarter but up 33.3% on year.

Computex 2016
Wireless broadband developments in Southeast Asia markets
Analysis of China revised domestic semiconductor industry goals
  • 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.