Thursday, September 6, 2012

OutLook For China LED market 2012-2014

Outlook for LED market and LED manufacturing
China MOCVD Market slow down
The China MOCVD tool market grew rapidly and reached a peak in 2011, MOCVD installation ranked as first in the world with a half of the total quantity shipped in the world.
Oversupply is one of major reason of slow down on the MOCVD, utilization rate as low as 20% were happened especially on some “new comers”. In 2012, China's new MOCVD installation is expected to be about 40% of 2011 level. MOCVD market is expected to be at a low level till 2014.
China LED Fab,
China LED industry experienced a rapid increase in 4 years and — had a total of about 80 LED epitaxial and chip fabs at the end of 2011. However price Erosion is the major bad news in maintaining the business. Starting in 2012, the number of China fabs could decline due to either loss or unable to provide deliverables to the private or state investors. Estimated 40% of China LED fabs will suspend operations or be acquired by 2015. Only companies has strong technology foothold, large scale productivity and patented technology will remain unaffected. 

I have talked to some of the key players in China and their lines they bought in 2010 is still running with 30-40% capacity, which is still under my earlier estimation of 50-60% for September 2012. This is a bad sign that LED is not growing fast as we expected in 2011.

Reasons are:
  1. Price Erosion
  2. Technology improvement with higher efficacy of LED, less LED is required for same light intensity before.
  3. End application design improvement including light guide effiency thus reducing the number of LEDs
  4. LED assembly is continuing fine tuning the manufacturing process and manufacturing equipment UPH maximizing.
  5. Low cost low end assembly equipment is dumping into the China market
  6. Domino effect of end users are feeling nervous of using LED quality LED made by low end Assembly equipment due to poor reliability.
  7. Boosting too much on the LED Life time, but due to poor driver circuit design and poor wire bonding process or the fall out Chip in use, the LED dies much earlier than it was Claimed to be.

Nowadays, everyone knows the LED assembly process, and there are so many Fabs making LED, the only way to earn money is having higher powerful LED assembly technology and good supply of high power chips

Or LED will be like the case for TV… Panasonic, Sharp does not want to make TV anymore as they lose market to Korean and Chinese Makers…Sharp is going to selling their LCD panel factory to Foxconn.

Fro, what I see and guess LED will not be blooming until there are either, or and…

  1. New international LED makers to have a commercial standard for LED luminaries mounting, shape, reliability and life time guarantee
  2. New Driver for a national standard for LED quality.
  3. UN or DOE approval LED category on Chip efficacy, assembly, luminaries, or finished LED products be rated with Energy Star.
  4. Hi End Equipment Suppliers makes super-in-line assembly for Display, VLED and K2 types LED as Total solution provider. Thus to ensure good quality LED is made under automated process control.

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