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LEDs Seen As Rare Growth Segment

1/21/2009 09:42:00 AM Eastern

El Segundo, Calif. — Despite the economic downturn, worldwide demand for LED technology, boosted by demand for LED-based LCD TVs, is expected to grow in 2009, according to a new report from iSuppli.

The market research firm said LEDs are expected to see a 2.9 percent revenue increase in 2009, following 10.8 percent growth in 2008, as the overall semiconductor market declines by 9.4 percent.

“LEDs are forecast for growth this year — a highly unusual item in our semiconductor forecast, given that almost all other components will suffer revenue contractions in 2009,” stated Dale Ford, iSuppli market intelligence services senior VP. “Although a 2.9 percent increase is only a moderate rise by the standards of the semiconductor industry, any revenue growth at all this year will be a remarkable accomplishment.”

LEDs are used in LCD TVs to illuminate the display. Most LCDs traditionally have used CCFLs as the backlight source. However, the declining prices of LEDs are making them a viable competitor to CCFLs.

The technology is said to bring energy consumption and form-factor benefits, while picture performance can be improved over traditional CCFL back-lighting systems, depending on how the LEDs are configured.

Most of the current LED-equipped LCD TVs use edge-mounted designs that place the diodes at the borders of the display. This allows for the thinner form factors, but it does not provide any major improvement in contrast ratios, according to Sweta Dash, iSuppli LCD research director.

LCD TVs that use full array LED backlighting can offer noticeable improvements in contrast and color performance, but produce somewhat thicker panels than edge-lit models.

The global LCD TV market in 2009 will use $163 million worth of LEDs, up 221.9 percent from $51 million in 2008, according to iSuppli. By 2012, LCD-TV LED revenue will grow to $1.4 billion, a nearly nine-times expansion from 2009.

The market research firm said pricing for LEDs continues to decline, allowing LED-back-lit sets to become more price competitive with comparable CCFL sets. Patel estimated the price premium for 40- to 42-inch LCD TVs using LEDs now is as little as $200 to $500 compared with CCFL alternatives.

At the recent International CES, some premium LCD-TV brands showed new lines of LED-equipped sets, which are expected to be introduced in the June timeframe. These brands include Samsung and Sony.

Meanwhile, second-tier brand General Electric sees LED backlighting as a chance to carve out a new market niche.

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