Wednesday, May 18, 2011

A LED Market Forecast for 2H 2011

MOCVD Delivery as seen from Axitron equipment delivery in the past two years.
2009 Sales Revenue was Euro 301m
2010 Sales revenue was Euro 784m
AIXTRON expecting further growth in 2011
2011 Sales Revenue is estimated to be Euro 800-900m
Over 90% for Axitron MOCVD is made for LED application.
Paul Hyland, President & Chief Executive Officer at AIXTRON, comments: “I think we can afford to very briefly enjoy this moment and have good reason to be proud of this remarkable result with revenues, in USD-terms, of more than one billion.
What we saw in 2010, was not only a continuation of the market driven demand for LEDs for TV backlighting, but also an increased effect of government sponsored demand and some early encouraging investments by customers beginning to position themselves for the emerging LED lighting market.
LED TV ASP drops
As I can see in the Shenzhen market, an Hisense 55” LED TV is selling at RMB9,900!
This kind of TV was selling at least RMB15,000 6 months ago. We can see that the ASP of the LED TV is kept on dropping. Who know this kind of TV will be selling at RMB5,000 in another 6-9 months time?
However, Samsung TV is still a bit more expensive than the China made TV by 20-30%
LED Price
5050 LED is now selling at RMB0.40 to RMB1.8 is that is using Cree Chip.
5630 is selling at RMB1.20
Cree LED with 120 Lumens is selling less than RMB10.00
Samsung LED B grade 5630 is selling at RMB0.90 which is even lower than the China made 5630 by 30%. This is the way Samsung is trying to erode the market by dumping the price. And Who will be having market enough to get them survived against such low ASP!?
What is the next move?… from what you can see…
This is the scenario
LED TV is using Disruptive technology for lowering the cost.
LED TV ASP is dropping more than 30% a year.
LED price is dominated by the big player like Samsung, LG, Cree, Epistar, Liteon,
Whereas the Western Maker is doing the best to swim against the price war in Asia。Like Osram is typically the one who is driving themselves towards more cost effective product. They have to go for more competitive LED Manufacturing equipment, lower the cost of the material by adoption of newer process with more advance technology.
Those major China player who has no solid end user support will be struggling for getting order.. unless they are back up by largest End user such as lighting or TV manufacturer or they will have to suffer till 3Q, unless they can switch the production line towards lighting assembly or lighting products.
However if you are not supported by local China Government, there will be a lot of obstacle for opening new market. Current, their production line are not fully loaded 80% is classified very good already.
Forecast 2H 2011
The market tail, the MOCVD is being installed but not in running condition, the market will slowly gain there’re momentum with the government support for lighting, and bigger consumer demand for LED TV net book and Tablet.
New technology reduces dramatically the number of LED 25% as in 2009.
LED TV as a Sales Gadget effect is not as prominent as end 2009. Now almost every brand has launched LED TV.
The higher end LED TV which used more LED has a small ratio comparing with the mid range and lower ended LED TV.
The Lighting is coming but not as fast as we expected in 2010,.
The over capacity of bonding equipment persists. The China government has diminished the scale in subsidizing the purchase of MOCVD in 2011.
I guess some of the Aixtron order was old one and new one will be softened...
The equipment by will normally lagging behind 6 months than MOCVD...
Current LED Equipment utilization rate is 50-60% for Korea andTaiwan, 85% for China, 75-85% for Japan and 80% for German and 85% for USA Major LED makers. Not until the utilization rate reaches above 85% for a period of say 2 months, there is no one intend to mark a plan to purchase new equipment. There is no new major consumers product that can stimulate the buying desire of most of the major consumers. There is internet TV, Smart TV and 3D TV being cooked as the new sales gadget from Sony and Samsung, but limited to few players that does not create a real critical mass for market stimulaiton!
I think the LED equipment order will not becoming materilization by November 2011.
HK Snob

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