iSuppli: LED Supplies Tight Through 2010

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El Segundo, Calif. - Supplies of LED backlights used in LCD panels for televisions, mobile computers and desktop monitors will see tight supply conditions for most of the year, according to a market study released by iSuppli Tuesday.

Shipments of large-sized LCD panels with LED backlights are expected to reach 276.7 million units in 2010, up 134.9 percent from 117.8 million in 2009.

In 2010, LED backlights will be used in 43.1 percent of all large-sized LCD panels, which mainly are used in LCD TVs, mobile computers and desktop monitors, iSuppli predicted.

Worldwide LED backlight shipments are forecast to rise to 477.6 million units in 2011 and continue to expand to 817.9 million units in 2014. By then, LED backlights will have penetrated 87.7 percent of the total large-sized LCD market, according to the firm.

The significant advantages of LED over CCFL-based displays had led to soaring usage, including slimmer design, reduced weight, lower power consumption and mercury-free attributes for a greener, more environmentally friendly solution, iSuppli said.

This rapid rise in shipments has spurred supply constraints for LED backlights, according to the report.

"There have been mounting concerns in the industry about supply constraints for LEDs and light guide plates, two of the major components for LED backlights," said Sweta Dash, iSuppli, LCD research senior director. "Changes in light guide design, constraints in raw materials and high expansion costs are limiting capacity."

The other major constraint, Dash said, revolves around the challenges faced by metal oxide chemical vapor deposition (MOCVD) reactors -- the key equipment for making LED chips -- to keep up with demand. As a result, tight supply of LED chips is expected until the end of the year.

 The LED shortage is not expected to affect all panel makers equally, she said.

"By the second half of this year, a clear distinction will emerge between the ‘haves' and ‘have nots' among the panel suppliers," Dash predicted. "Those panel makers that have their own internal manufacturing of LEDs will have sufficient supply in 2010, while those that don't will encounter constraints."

Samsung, for example, has established Samsung LED, which provides an internal source for LEDs for the company's manufacturing of LCD panels, she observed.

 To address the availability constraints, LED suppliers are shifting production to 4-inch and 6-inch wafers and away from older 2-inch wafers. This will cause production capacity of LEDs to rise, Dash predicted. However, LED makers will need as long as one year to adjust to the change in production technology.

Meanwhile, panel suppliers are expected to offer newer backlight designs that require fewer LEDs per panel. Most panel suppliers expect the number of LED chips per television panel to decline by 30 percent or more at the end of 2010 compared with one year earlier.

LCD panel suppliers also are set to become more vertically integrated in order to better control the LED backlight supply chain. Furthermore, branded TV manufacturers will be partnering with module manufacturers to gain their own backlight solutions and to achieve product differentiation.

"By the end of 2010, the supply situation will improve as capacity rises and new backlight designs require fewer LEDs per panel," Dash said.

The adoption of LED backlights in LCD TVs will rise to 18.4 percent in 2010, up from 3 percent in 2009, spurred by the push among various TV brands to introduce LED-based TVs. Adoption rates also will climb for notebook panels, rising to 88 percent this year, up from 62.6 percent in 2009.

By 2012, LED backlights will be used by 100 percent of notebook panels.

The adoption rate for LED backlights for desktop PC monitors in 2010 will rise to 20.8 percent, up from 1.7 percent in 2009.

A full report on the LED supply situation is available in Dash's LCD Report -- LED Backlights Reshaping the Large LCD Industry -- by contacting




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