Friday, February 17, 2012

Market Situation of LED 2012-2013

Market Situation
The U.S. Japan and EU has taken the lead in proving the viability
Of LED technology for outdoor lighting. With major players Osram, Cree, Nichia, Lumileds, Seoul Semi, Everlight, Soraa… etc.
Despite more installations, China has become the first casualty of quality issues which has resulted in the decrease of the Chinese market for outdoor lighting in 2011.
In North America, quality consciousness along with the efforts of DOE and other key organizations has propelled the transitioning to LEDs.
The 20% -25% drop in price of LED packages has proved to be a boon for quality luminaire manufacturers.
Average price of outdoor luminaries has continued to decline in 2011 and this trend is likely to accelerate in 2012.
This decline in price will help post-pilot and post-stimulus programs.
While the CAGR for unit growth is forecast to grow 26% from 2010 to 2015, the CAGR for revenues will be only 11% as downward pressure on price Continues.
Considering that LEDs compete against other efficient technologies, the viability of LED
applications in outdoor applications will be a test for LED technology.
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 2011 keeps 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. Whereas Q1 2012 would be cary on increasing on demand on LED on lighting sector.
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
2012 brings yet another year to all of us, and once again the industry is bouncing back after a challenging 2011. We welcome a fresh optimistic outlook as perceived by semiconductor industry analysts at large, both domestically and abroad. The sovereign debt and economic worries of the European Union has brought a torrent of dreadful news, yet the industrial indicators within technology and specifically the semiconductor segment reflect increasing stability. LED side would also be affected as simply once rich country was down to a level that people will scary for the investment for future. Energy Saving program is a long term energy harvest program, this will be only be high lighted when the country is economical stable, where as in such World Wide economy instability period. National policy working on LED energy will not be the top of the Do-list on the presidency desk anymore even China.
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.
Why LED is not moving into our house?
What are reason LED market will not fly out as we forecast
1, Cost of the LED bulb is still high, not until that price is 2X-3X or less of CFL, there will be not having huge demand on the light LED
2. Pychronogical effect
In lighting LED users are mainly people who really care about energy harvest , global warming and from Middle class people. The rich will never care about how much they can save the electrically, they will continue to use CFL or even incandescent lamp.
The Poor has to fill up their stomach instead of going for LED, forget it!
Only Middle class people, educated and people caring about the Motherhood of Earth will go for LED.
Imagine in your company, how many managers are using 100% LED as lighting in his house, less than 1 or 2 persons
Government promotion and support, HK is slow in these respects and HK in fact is the last country employing LED in Traffic light, after China, Japan, Singapore, Malaysia, Thailand… This is a disgrace as a HK Government in protecting the Earth.
China Investment
Wen jiaBao had announced that the scale of incentive financial support to the industry and infrastucture expansion will not be as strong as he did in Q1 2009. That is another way to control the fly up of inflation, so Energy saving sector will not enjoy much as they did in 2009. This is another cause of the LED market to grow as in 2010.
Difficult year for small LED Assembly company
Look at the Equipment idle rate of the big shot Player, if their utilization rate is less than 80%, there will be less drive for next equipment purchase trigger, and they will convert back the subcon business to fill up the idle equipment, Smaller LED company will face will difficulty due to less bargaining power higher material cost and the impact of higher China Labour cost. I believe there will be at least 15% of the Small – medium China LED company will down size in their scale in production and start to control the cost, or go for merging in order to struggle for Survival, especial those “me-too” product company.
When next LED Market growth
1.Not until average LED manufacturing equipment utilization reach an average of 80% or more.
World Economic stability is an factor for people to invest on energy saving device like LED
2. Inflation to be GOING down.
3. Government Promotion on the use of better environment friendly LED
4. Government banning sales on 40W of below Incandescent lamps.
Better Efficacy and higher technology breakthrough to deliver low cost LED as commercial availability.
5. LED is really attain a price of no more than 3X of CFL lamp with equal
Lighting intensity.

6. LED bulb is really can last for 40,000 hours?
Personally, I am not optimistic for LED lighting will have a huge demand in 2012 as we forecasted in 2010. Optimistically, we are looking at 2013 Q1. provided the world economic is keen and sound, with all the sovereign debt and economic worries of the European Union have been removed.

HK Snob

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