IMS Research Expects 2011 Packaged GaN LED Revenues to Decline 6% to $8 Billion on Weakness in Backlighting; LED Growth Expected from 2012 - 2015 as Lighting Accelerates
Publication Date: 17th January 2012
After 60% growth in 2010, the gallium nitride (GaN) LED market is now expected to fall 6% in 2011 to $8.0B as shown in the figure below and reported in IMS Research’s latest Quarterly GaN LED Supply/Demand Report which tracks and forecasts all aspects of the LED market quarterly.
The decline can be attributed to:
- A widening surplus resulting in significant pricing pressure as supply grew nearly 3X faster than demand from 2010 to 2011, resulting in depressed LED factory utilization levels. As quantified in this report, the LED surplus rose from a relatively healthy 7% in 2010 to 45% in 2011 and is predicted to widen further in 2012.
- With both panel shipments and LED penetration below expectations and average LED prices for backlighting declining 34% on a volume weighted average basis on depressed utilization, backlighting revenues fell 13% to $4.8B. ASPs for certain backlighting markets were down as much as 45% in 2011. As a result, backlighting fell from 64% of 2010 GaN LED revenues to 59% of 2011 GaN LED revenues and are likely to continue falling on a percentage basis in the future as backlight markets become saturated and the lighting market accelerates.
- LED revenues for TVs are expected to fall 5% in 2011 to $1.9B as penetration is only expected to reach 39%, down from the previous estimate of 43%.
However, the GaN LED market is expected to recover, enjoying annual growth each year from 2012 to 2015 including double-digit growth in 2013 and 2014 as the lighting market accelerates. Highlights include:
- The 2012 market is expected to grow 5%, but still remain below 2010 levels. Backlighting is expected to be flat on slower unit growth and price reductions, while lighting is expected to be up 30% as LED lamp penetration jumps as prices continue to fall.
- Lighting revenues are expected to overtake TV revenues for GaN LEDs in 2012, a year earlier than previously predicted. This is a result of increasing LED lighting demand on lower pricing while reducing the LED outlook in TVs on lower penetration than previously predicted along with the use of low cost direct LED backlights in developing markets.
- The low cost direct LED backlights use around ½ the LED die area as conventional edge backlights due to significantly reducing the brightness specification along with adopting a thicker form factor that allows wide viewing angle packages to be adopted which further reduces the number of LEDs required. While the adoption of these new low cost direct-type backlights will narrow the cost differential with CCFL LCD TVs, the thicker form factor and reduced brightness capability will narrow their appeal.
- The lighting share of the GaN LED market is expected to surge from 21% in 2011 to 49% in 2016 with lighting LED revenues expected to grow >300% and units expected to grow >1500% over this period.
The most recent issue also included a number of new demand and supply deliverables:
- Added projector forecasts and LED demand
- Separated notebook and tablet LED demand
- Added panel, LED panel and number of LEDs per panel by size forecasts for monitors, notebooks and tablets.
- Added the low cost direct LED backlight category into the forecasts by size. Thus, for every size, four different LED backlight configurations are tracked and forecasted which include:
- Edge + dimming
- Direct + dimming
- Added 600 x 1200 µm die size demand
- Extended the quarterly LED chip price forecast by application, package and die size to Q4’12
- Added quarterly utilization data for the leading LED manufacturers
- Listed the top 15 sapphire suppliers’ quarterly capacity data and identified 36 other/new sapphire players.
- Provided a base MOCVD forecast by LED manufacturer for 2012, including optimistic and pessimistic scenarios.
IMS Research’s Quarterly GaN LED Supply and Demand Report also tracks and forecasts MOCVD shipments, LED capacity by manufacturer, LED and MOCVD supply/demand, sapphire supply and demand, sapphire pricing and quarterly notebook, monitor and TV panel shipments by backlight type, size, resolution and refresh rate.
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