Sunday, August 15, 2010

China and Russia LED Status and Opportunity

The light-emitting diode (LED) is one of the semiconductor device, which can turn electrical energy into luminous energy and emit visible light in various colors, such as Amber, green, blue, as well as invisible light, such as infrared and ultraviolet light. Compared with incandescent bulb and the neon lamp, light-emitting diodes are specially characterized with low operating voltage down to a few volts and electric current as smaller as couple hundredth of an Ampere. Highly reliable as its life time an be as good as 50,000 hours and much lower in the performance degrade over the years.
 The entry barriers of the light-emitting diode (LED) industry from the upstream to the downstream are being removed gradually over the year. The upstream industry includes mono-crystalline chip and the epitaxial wafer growth while the middle stream industry is mainly in chip processing such as probing, LED sorting, and the downstream process handles packaging, Singulation, testing, sorting and final packing.
 The upstream and middle stream process have higher technical requirement and involving heavy investments. In the industrial food chain of light-emitting diode, epitaxial wafer and chip account for about 60% of cost of the finished LED products, and the packaging material and process accounts for 35% percent, remaining 5% is the packing cost.
 Under global warning threat, energy shortage concern, environmental protection caring, the LED lighting which is long life span, efficient performance, safe and environmental friendly, abundant colors and microminiaturization, has been recognized as the ultimate source for energy saving lighting in the world.

The LED as the new lighting source, only run up one tenth of the electricity compared with the ordinary incandescent lamps and the performance can be postponed ten folds at the same brightness. In 2007, the total amount of the global LED market exceeded US 6 billion, up by almost 14% over the previous year. During 2006 to 2012, the annual compound growth rate of the global light-emitting diode market will reach 10%, most of which will mainly be contributed by the ultra high and high brightness light-emitting diodes (HBLED, UHLED).

The global LED industry is mainly found in America, Japan, Taiwan, Europe, South Korea, China, etc. Japan, the largest producer of LED in the world, holds 50% of the market share. Nichia Corporation is the world’s largest provider of the high-brightness light-emitting diodes. Toyoda Gosei Co., Ltd is the world’s fourth largest and Japanese is the second largest manufacturer of the LEDs. Osram Opto, with Headquarters located Regensburg of Germany, is the world’s second largest and European largest manufacturer of the high-brightness light-emitting diodes.

Taiwan, the global production base of the consumption electronic products, is mainly engaged in the production of the visible light-emitting diodes. Taiwan is also the world’s largest downstream packaging and middle stream chip production base. Korea, typically represented by Samsung, LGE and Lumen, is a new emerging player in these two years due to their internal drive for huge volume of Back light LEDs for the LCD TV.
 With more than 30 years of LED development, Chinese LED industry has formed the basically complete industrial chains, covering the LED inside, epitaxial wafer, chip package and application. At present, China has over 700 LED enterprises specializing in the downstream packaging and application. However, there is only about 10 companies engaged in the production of the epitaxial wafer for LED, led by SanAn optoelectronics Xiamen, Silan Azure Hangzhou, Inspur Huaguang Shan Dong, Lumei optoelectronics Dalian, Changelight Xiamen.

Starting from Vertical LED for some limited application fro Display in the instruments of cockpit of an aircraft in 30 years ago, a LED was selling at USD$3.0 dollars until the big four LED manufacturer pioneers Liteon, Ever Light, King Bright and LEDtech of Taiwan converted from manual LED process into Automation with the support of the ASM, LED equipment supplier with major operations in Hong Kong and Singapore.

With technological improvement of the luminous efficiency and application technologies, the application of the LED has been transferred from the initial indicator lights to screens, backlight, automobile lights, traffic lights, signboard etc. It is predicted that the average compound growth rate of sales of the light-emitting diodes will be above 19% in 2007 to 2014 and the annual average compound growth rate of sales of the landscape lighting and signboards will reach over 35%. The annual average compound growth rate of sales of the backlight LED at more than 30% from 2009-2012.

In 2010, when many patents in the LED industry would expire. Chinese companies are expected to break through the shackles of the intellectual property rights from American, European, and Japanese giants. With the China Local government subsidize at least 70% of the cost, or US$1.5 million on average for each purchase of a MOCVD. And numerous Land space and electricity incentive support to the major LED makers. That will be a spring board for providing extra vibrant for China LED manufacturers to pursue it to be the World No. 1 LED manufacturing company in terms of Sales Revenue in the coming three years.

 Russia, on the other hand is not new for LED, they have been involving the LED research and development in the 60s, and they had an early successful light up of a Blue LED chip 10 years before Shuji Nakamura did it in 1993... Of course the life span and the light intensity is not able to comparing Shuji’s LED!! The Country is rich resources with oil and gas and in fact they electricity is not as expensive as Germany USA or Japan. Currently 1000KV/Hr of Electricity is rated for 3.5 Robles. (USD$0.166). However they have concern for the environment as they know that the mercury is coming with CFLs. The Russian Ministry of Economy Development has recently announced that starting from 2011 they would start to ban the sales for Incandescent light bulb, and to prohibit the sales of 75W or more incandescent light bulbs in 2011. Till 2014, no one can be allowed to sell Incandescent light bulb anymore.

The CFL production capacity is inadequate and price is high, Russia is now trying to build CFL factories with minimum annual shipment of 200M pieces. The sales of CLF is about 50M pieces almost relying on import. That the price is approx 140-300 Robles (USD$4.60 to USD$10.00 ) which is almost 2 to 5 times more expensive than those we can get in USA. On the other hand, we can see that there are thousands of building was over 100 years old in Moscow, the ceiling is high and that is expensive to change the light bulb when the fails. LED is the suggestion for replacing the Incandescent lamp.

Local Cities are moving forward progressively, Moscow, being a model itself to push forward for going for green product, starting 1st of Oct 2010, Moscow will not purchase incandescent light bulbs nor any other uncompromising illumination device meeting their energy saving requirement.

Starting 2007 June Moscow government advised to go for green programme to the enterprises, offering a generous 50% incentive support to that enterprise that can reduce emission. Up to now, there are many companies who has granted with the subsidizing programme. Now a lot of LED companies is being supported by Russian Government for LED manufacturing. And the trend for Russia is to Move from Incandescent directly into LED, skipping the CFL…

The LED would be a big energy saving programme in both China and Russia in the coming 10 years. Partly as they are being driven for adoption and being supported by the government. Let's watch out and capture the opportunity for supporting them with total LED solution.


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