Monday, November 1, 2010

2011 LED Market Forecast for China, Europe and Russia

Since the Samsung launched the LED TV there was approximate 2.9% penetration rate in 2009 and rough 30% in 2010, it was happened mostly in Q1 Q2 of 2010. And down the road, we were expecting that the LED TV would continue to have a record high sales in September, but to our Astonishment, that the maker becoming slow down in End August.

Partly de to the stock level of CCFL Back light was still high, partly CCFL supplier offers lot price attraction for us. We estimate that it will be consuming all stock of CFL by End Dec, in Q1 2011, we believe that the back light LED marker will start to run the LED production in much larger scale. Since the number of LED on each of the LED TV is about 200 for 42” TV. There is a keen reduction (100%) in the number of LED in each of the LED TV especially the Samsung, LGI, etc. The overall market for 2010 on LED is sill strong, not as the major analysis expects 50%, probably around 30%.

Though we know that someone forecasts 2011 would be as high as 50%. That would be a lot still, but do not forget that the figure will be affect by the economy of the area, and the equipment purchase would likely be happened if they have used up all their capacity.

CCFL flight back
With the CCFL flight back with an attractive price as leverage, original LED TV penetration expectation was 30% for 2010. According to Unity Opto ‘s forecast the new penetration rate is 15%-20% for 2010.
Whereas Epistar forecast will be to 20% to 25%. However Epistar would be optimistic for 2011 as Korean would be trigger launch of new model with more attractive features, and at Same Time China will be a big marker demand for LED TV. He is very optimistic to see that all year penetration rate will be touching 40% in 2011.

LED TV Market 2011
The European market would be having another 6% growth for 2011 as comparing with that of 2010. Whereas US may have a light growth of 1-2% only as they have been Saturated with the LED TV shipment typical supplied by Vizio and Samsung. China would the market supporter for LED TV as partly due to the special incentive scheme for TV in rural side, and partly China as to support the consumer electronics segment partly to support the GDP index growth, and partly to maintain the employment of a large work force.

7th Sept, Mr. Zhang Xue Bin, Executive Chairman and CEO of Skyworth, China’s 4th Largest LCD TV makers told to the Hong Kong media and investors that during the April-May LCD TV old stock purging action by selling at a low price. After World Club came to an end we had slash of the TV sales unless there is new stimulus campaign. Skyworth’s CFO said that In China, there are approximately 600M sets of LCD TV what had been servicing for 5-6 years. There is a necessity and need for replacement with by new LCD TVs, amongst these 600 Millions sets, there is at least 48 Millions to 72M sets of them would go for LED Backlight units. These actions of new TV purchase will not stop for next 12 months!

I believe that the Big Players like Samsung, LGE, Sony, Toshiba and Chinese band like Hisense, TCL, Konka and Skyworth, Changhong will carry on shipping out more cost effective LCD TV or a low-Cost-Version TV Before Chinese New year 2011.

TV Sales Gadget
The problem lies in the consumption of the CCFL BLU TV first, it would still have to take 8-10 weeks to absorb this inventory, so there is also a possible trick of selling CCFL BLU with mixed of LED BLU… to tell the consumer, THIS IS LED TV.. Selling at a higher price..nother way to push for more sales revenus is to put LED in one bar or fore concern of the screen, this would be workable for small screen size TVC such as 27” to 37” TV Set.

The purpose is to enlarge the coverage of the LED TV portfolio. Next year, I think the sales if the LED TV would move up to another heights of record as more 3D featured TV and Smart TV will be available, Smart TV to be the home entertainment centre for some of the technology lovers. LED TV cost will be lowered by another 25%-30% as we can buy now. Brighter with lesser LED be more effective light transmission would be the main stream, that will be the evergreen product as a result of the latest LED technology with least power consumption, mercury free and reasonable beautiful picture quality.
An era for LED truly penetration of 40% could be found across all sized… with 32”-40” will be the most popular size as an average.
Base on the market survey we had, there will be more or less an additional 30% as of this years demand on LED for BLU.

Hong Kong LED Light Bulb
We have been using LED light bulb at home for the sake of social conscience and caring of the environment, and as a way to perform the energy harvest. In the two years, the retail selling price is kept on dropping at rate of less 30% a year. A 3W K2 x3 type LED was HKD$330 three years ago, and Now we can get it at about HKD$80.00.
That was the similar as what we could se in HK in the past two years Today I saw the place where I am living are changing all the CFL light bulbs in to the 7W LED at the garden walking path form MTR to each of the buildings. This is a first time happened to see LED being immigrated into one of the largest residential estates.

Japan SSL Market
This is the fastest blooming market for LED replacement light bulb business, reason is mainly due to geographic and historical reason, Japan is intricately lack of any energy resources, they have to struggle for energy harvest. Under such a high living standard county the price of CLF is not low at all, Why not switch to LED! In Akihabara beginning of the year able to see various supply of LED replacement Light bulb in the market, Panasonic, Toshiba Litetech, Sharp and Citizen made LED, light bulb, the price was 4,000 Yen Jan 2010, but now It is just about 2,500 Yen for the same type same model.. That is a significant price drop about 37% in a year!

Japan LED bulb design
Form what we know from the three major supplier for LED bulbs, there is common packaging method by employing a lot of LED 20-168 LEDs in a light bulb. Most f them a low power LED.
Reason is three folds:
1. They would like to go for better heat distribution as the area of contact is much bigger.
2. The smaller the chip size the higher the LED emission efficacy. A small chip of 16x18 mil 0.3W led can have an efficacy of 36%. Where is a 100mil x 100mil Power chip does have 26% only.
3. And there is input that Nichia bought a lot of MOCOV for 3 inch diameter afer. so they have no way but go for smaller chip size.

US and EU LED Package design
Cree, Lumileds, Osram are going for Bigger chip approach. Thus is their strength ad they can have a better chip design, one chip says it all. No matter Ostar, Oslon, Rebel square, XP, Multichip approaches.

The Big Five Movement on Lighting
Nichia is still using their approach of Multi chip format.
Cree is doing more on Lighting, after MacDonal, Star Buck, Burger King, Wart mart and Costco. Cree is working on project with bigger shopping malls, fast food chains in USA for their Lighting LEDs. They have the chip level phosphor application.
Osram is traditional Automobile business model. It is wise to diversify their LED segmentation for more BLU and General Lighting.

Lumileds Rebel it self is a versatile product, no matter BLU, Lighting, general lighting are using the similar package. Their LED is moving into a binning free process, meaning that they will have a better process control on their characteristic on their Lumiramic process such that the binning is minimized down the road.

General Illumination LED for Tunnel
Xi’an Liming, which is one of China’s largest suppliers of outdoor LED lighting as well as manufacturing LED tunnel lighting, worked with the engineering team at Future Lighting Solutions to ensure that the fixtures would meet national tunnel lighting standards as well as have a sustainable LED supply.

The fixtures are providing illumination for the Xinkailing and Wang Zhu Yuan No. 2 tunnels of the Liu’an-to-Wuhan highway, a north-south extension of the Shanghai-to-Wu Wei main line ( one of the country’s key east-west arteries). Running the entire 4.7km (2.9 mile) combined length of the two tunnels, the lighting was a joint project of Xi’an Liming and the Anhui Province Huan Yu Highway Construction Development Co Ltd.

Each 50W and 100W tunnel lamp contains 42 and 72 LUXEON Rebel LEDs, respectively. Each Tunnel of 1Km will use up approximately 1,000 Lamp and each will have 72 Rebel, a tunnel of 5KM will have 360,000 LED…Do not forget There are thousands tunnels in China. So this will be another big portion for their product revenue growth. Similarity, Osram Opto Semiconductors’ Golden Dragon Oval Plus LEDs are being utilized to illuminate the Shanghai Ren Min Road Tunnel and Guangzhou Zhu Jiang New City. Each of the installations used around 30,000 Golden Dragon Oval Plus LEDs from Osram Opto Semiconductors. A Tunnel will contribute approx. half RMB millions of LEDs and another half million for associated electronics.

Note that so far, Only High quality LED such as Osram Gold Dragon Oval and Rebel can be used for Tunnel as we can not allow fany failure of the LED. It is hard to replace the LED light bulb in case of Failure…

LED market in Russia Expansion
Although in recent years the Russian LED market has been characterized by a lack of standardization, a lack of a transparent pricing policy, and low product quality, this situation is changing rapidly. State funding and investment from private companies is helping to build a domestic LED infrastructure and, all over Russia, companies dedicated to LED lighting technologies are emerging.
The Russian state is playing a major role in the development of the domestic Russian LED market. In March 2010 the Presidential Commission for Modernization announced that the transition from incandescent bulbs to energy-efficient lighting devices will not take place by implementing energy-efficient saving lamps (CFLs), but by converting to LEDs directly. The State has also decided to introduce, at short notice, new standards for LED lighting technologies.

There is a strong political willingness to establish LED lighting technologies within the Russian market, and capital investors including private bank and government investor are helping to establish a domestic Russian LED production capability. Currently, Russia imports 98 % of its LED lighting, but this situation will change as domestic suppliers become better established. Meanwhile, Russia’s biggest companies, such as Russian Railways Corporation and Gazprom, are among the largest consumers of LED technology.

Further, the newly-founded Non-Profit Association of Russian LED Manufacturers, which has been established by competitive suppliers Optogan and Svetlana Optoelectronics, is likely to play an important role in the consolidation of the Russian LED lighting market;
Characteristic of Russian LED factories in previous the state owned factory has been manufacturing LED about 20 years ago, surprising to see that their facilities are still more or less the same as 20 years ago. Looking at another angle, Former USSR had an advanced technology on LED and Microelectronics. All they need are certain standardization on equipment and process.

Optogan expands production
As evidence of the growing LED infrastructure in Russia, the St. Petersburg-based company CJSC Optogan recently placed an order with Aixtron for two MOCVD systems for GaN-based LED growth. The St. Petersburg facility was acquired by Optogan from Elcoteq, a global electronics manufacturing services (EMS) company, in May 2010.
Also, Optogan recently appointed Markus Zeiler, a former Osram employee, to oversee the expansion of Optogan on a global scale. Optogan is a manufacturer of LED components, LED lamps and LED luminaires. The company was established in Finland in 2004, and was acquired in 2008 by Onexim, a Russian financial group.

Monocrystal decides against IPO
Russia also has a leading supplier of sapphire crystals in Stavropol-based Monocrystal, Inc. The company, a subsidiary of Energomera, appointed Oleg Kachalov as its new CEO in June this year. The company recently postponed its planned IPO, citing volatility in global equity markets and other factors. "We remain very confident in the strength of our business," said Kachalov. "We are able to finance our 2010-2011 business growth plans from internal source, however, we may consider returning to the equity market at a future date when conditions become more favorable."

The LED lighting industry in Russia is becoming more mature as the country seeks to develop a vertically-integrated manufacturing infrastructure. There would be enormous opportunity for investor for LED.
China has a Lowest CDI of 4.6% amongst these BRiC Countries: Brazil 4.7%, Russian 7%, India 9.9%.
China Q3 GDP increasing by 10.6% as compared with the same Quarter 09, a healthy Growth.
China National Energy Policy has not been changed so far, quite different as cooling action on the overheated real estate economy. The LED Energy Derivatives are still of the major energy strategic plan for China at least next 4-7 years.
LED TV BLU has been slowing down for a couple of months and will be recovering gradually, even the worse case scenario is BLU business goes down due to minimizing the number of LED per TV set, and tricky low end LED TV maker to use a few LED unit on TV as sales gadget rather than to use it for Picture quality. These LED packagers will do their best to convert the Bonder for General Light Business if their price is not competitive enough.

General Lighting market
From the analyses in the General Lighting market we can see that the growth is high, starting for less than 0.1% of the LED for General Market in 2009, this interprets that it is a huge market potential for coming future. See most of the Customers in Russia Northern China, they are having more than 80% going for General Lighting products. Though there is a lot of Propagation Attack on the failure of the Solid State LED street lamps, the adoption rate is low and the price of LED lighting fixture is still expensive… These are the prime market drivers for us to work on.

Overall opinion, the LED market will continue to be hot as 2010 in 2011.

31 Oct 2010

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