MOCVD capex disobeys fab utilization rules at LED makers
Barclays Capital analysts attended Lightfair International (May 9-11) and gleaned several trends in LEDs and OLEDs for lighting. This year's Lightfair was "almost entirely focused on LEDs," said Barclays analysts. While LED dominance in new products at the booths is not yet indicative of end market penetration, it highlights the inevitability of LED lighting adoption in the coming years.
While utilization rates are still relatively low in LED fabs, many chipmakers are reluctant to convert all of their backlighting-specific (BLU LEDs for display applications) LED tools to lighting-specific production, because they value yields honed for a specific design. Chipmakers told Barclays that they do not want to reconfigure MOCVD tools unless they are confident that this backlighting-specific production will no longer be needed. This suggests that anticipated LED lighting demand in H2 2012 and beyond will require more MOCVD tool orders, even without higher capacity utilization rates in LED fabs. Gradually improved MOCVD capex, in Q3 2012 and beyond, will be supported by a steady stabilization in LED supply/demand as 2013 approaches.
Barclays observed that LED chips still compete based on price, even among the Tier 1 LED makers, and further cost reductions are needed if margins are to survive. LED component price declines did moderate to an extent relative to last year's price cuts, but the aggressive pricing trend continues, driven in part by end customers leveraging Tier 3 quality price points in China against Tier 1 and 2 LED makers. Until yields top 80%, lower-quality LEDs will be dumped on the market at lower prices. Indeed, even in lighting-grade LEDs, there is "no rationality for price points," according to 1 Tier-1 supplier. The good news for LED revenues is that unit volume growth is offsetting the price cuts.
Only ~10 LED makers can reach 100lm/W efficacy levels in mass production, and meet Energy Star, UL, etc., specifications. Samsung is becoming a major threat to Tier-1 LED suppliers, longer term, as it focuses on quality.
While still in the early stages of development, OLED lighting was also being exhibited by several suppliers, with Philips and OSRAM appearing to be at the lead with efficacy and product quality. Philips' OLED lighting panels reached 25lm/W this year, with the company aiming for 60lm/W next year, driven by new developments in OLED materials (Philips using RGB stack with combination of phosphorescent and fluorescent materials); new developments in the glass substrate (adding reflective element to the glass composition); and advances in the deposition and processing technology. However, while reaching 60lm/W efficacy would be a big breakthrough, the key from there would be lumen maintenance, which is still very low for the OLED lighting panels currently available on the market. And while some companies suggested that OLED lighting is now moving from a designer/architectural application to a high-end lighting application, based on the product specs and the pricing, Barclays puts OLED lighting ~5-7 years behind LED lighting.???M.C.
Solid State Technology, Volume 55, Issue 5, June 2012