Wednesday, September 14, 2011

Next LED Manufacturing Equipment Demand

Low demand for consumer electronics LEDs, such as those Backlit units for LCD TVs, will be weak until at least till Q1 2012. It was clear that demand for nonlighting
LED applications continues to be tepid. Veeco indicated the utilization rates
for its MOCVD equipment in Korea and Taiwan was 60%, Rubicon indicated it will probably take until the end of the year to draw down excess levels of sapphire and LED wafers. This weakness for consumer electronics grade LEDs does have an impact on all LED pricing, even for higher performance lighting grade products.
The continued oversupply of LEDs in general will help to accelerate LED lighting adoption due to the suppressed LED pricing outlook.
We think the best place to invest will be as far downstream as possible in the LED-based lighting food chain. This is where we expect to see the highest revenue growth rates and most shelter from weakness in the broader LED sector should the macro outlook remain weak. We also believe a general rise in utility-based subsidies for LED-based lighting will occur over the next 18 months helping to accelerate adoption.
LED-based lighting demand growth remains strong in Spite of the weak macro
environment. The current equipment demand slow down is purely due to over-capacity in the past two years. Let’s wait for another 9-12 months, it will come into a higher level of production utilization and that would be time for next equipment Purchase.

HK Snob

Thursday, September 1, 2011

When LED Market Will Grow again?

LED MOCVD Installation
Korea and Taiwan dominated in number of MOCVD installation in 2009.
China came up as leading installation region and became major site for installation since Q4’10. China is expected to continue to be the dominant MOCVD market until Q3’ 12
But China will shrink from three third down to 60% in Q4’12 when Taiwan and Korea rebounds.
Largest MOCVD Installation Base
Epistar is expected to be #1 MOCVD customer in 2012, followed by San’an, GCL Opto, SemiLEDs and Genesis Photonics onpur.
Such Rapid expansion in 2010-2011lead to an overcapacity that we think it will be fully utilized only by mid 2012.
LED lighting Status
Total LED lighting demand in Q2 & Q3 2011keeps increasing. The Demand
is 3.2 billion units for Q2’11. And the demand is predicted to be 3.4 billion units for Q3’11. The Growth is not seen as significant as we expected beginning of the year.
LED lighting Players
Due to Government encouragement for going greener energy, limited resources of these islands, as well the March 11 Quake issue that rocked the Nuclear Power plant, alerted Japanese Citizen and Government on using more efficient Source of Light. Japan, as biggest market for LED bulbs in 2011, with market share of 63 %, Japan will remain the biggest lighting market until 2014. Price of LED replacement Bulb keeps on dropping.
The downtrend of LED caused the LED light bulb price to drop from USD83 /Klm in 2010 to USD 52 / Klm at this stage. However, the initial cost of the LED light bulbs is still much higher than that of general light bulbs, so it is still too soon to say whether LED light can fully replace the latter. ASP of Japan LED light bulb was Yen 3000 for 5W in Q1 2010, and dropped to Yen 2,000 in Q1 2011, the speed of ASP drops slow down. That indicates that the adoption is slow down in Q2 2011.
LED bulb growth in China, North America and Europe will be higher than other areas from 2011 to 2014
China - biggest market for LED street lights in 2011, but due to China government policies. With market share of 55 %, but China will slightly decline to 50 % in 2013.
Economic Situation
We are now experiencing dual Core Economy (USA and Europe) slow down though the scale and intensity was not as worse of September 2008. We will not having the same good old day as the maket would bounce back as early as 2009 Q2 3 after Leman Brothers melt down 15 Sep 2008. Government Policy will not focus on Green Energy harvest rater than on job creation, economic reform, and stimulus plan for economy. Less incentive programmes for LED lighting penetration will be generated.
LED lighting Type
Highest penetration in spot lights Due to halogen replacements
Government policies are expected to accelerate LED penetration in street lights after 2011.
Package LED market Forecast
In 2010-2011, rapid expansion of MOCVD in China
Initiated in Korea and Taiwan since 2009.
Cause capacity utilization rate of <50% for certain tools by mid 2012.
It will take 12-18 months to absorb this overcapacity, and that causes a short down cycle
The down cycle will extend through mid 2013!
Some consolidations will bring the industry back to more usual utilization rates of at least 80%, before any capex initiation for next new investment including Manufacturing Equipment such as MOCVD, Die Sorter, Die bonder, wire bonder, tester, package sorter and Taping Machines.
Equipment Forecast for LED lighting
If adoption of LED for SSL happens faster than initially envisioned, it would lead to higher equipment investment levels. Excess capacity installed in 2010-2011 is absorbed much more quickly than expected. The Equipment market will bounce back significantly in Q1 2013 to respond to accelerated demand for general lighting applications.

HK Snob