January 17, 2012 — The gallium nitride (GaN) light-emitting diode (LED) market declined in 2011, but 2012 marks the beginning of a growth curve, with double-digit growth in 2013 and 2014, says IMS Research. Lighting revenues will overtake TV revenues for GaN LEDs a year earlier than expected.
After 60% growth in 2010, the GaN LED market fell 6% in 2011 to $8.0 billion, shows IMS Research’s Quarterly GaN LED Supply/Demand Report.
|Figure. 2009-2016 packaged GaN LEDs by application (Revenues by segment; billions of dollars). SOURCE: IMS Research.|
A widening surplus is resulting in significant pricing pressure: supply grew nearly 3X faster than demand from 2010 to 2011. LED factory utilization levels are depressed. IMS Research’s report shows that the LED surplus rose from 7% (healthy) in 2010 to 45% in 2011, and will continue in 2012.
With both panel shipments and LED penetration below expectations and average LED prices for backlighting declining 34% on a volume weighted average basis on depressed utilization, backlighting revenues fell 13% to $4.8B in 2011. ASPs for certain backlighting markets were down as much as 45% last year. As a result, backlighting fell from 64% of 2010 GaN LED revenues to 59% of 2011 GaN LED revenues and are likely to continue falling on a percentage basis in the future, as backlight markets become saturated and the lighting market accelerates.
LED revenues for TVs are expected to fall 5% in 2011 to $1.9B as penetration is only expected to reach 39%, down from the previous estimate of 43%.
However, the GaN LED market is expected to recover, enjoying annual growth each year from 2012 to 2015 including double-digit growth in 2013 and 2014 as the lighting market accelerates. The 2012 market is expected to grow 5%, but still remain below 2010 levels. Backlighting is expected to be flat on slower unit growth and price reductions, while lighting is expected to be up 30% as LED lamp penetration jumps as prices continue to fall.
Also read: MOCVD shipments stall, but restart in 2012
Lighting revenues are expected to overtake TV revenues for GaN LEDs in 2012, a year earlier than previously predicted. This is a result of increasing LED lighting demand on lower pricing while reducing the LED outlook in TVs on lower penetration than previously predicted along with the use of low cost direct LED backlights in developing markets.
The low-cost direct LED backlights use around half the LED die area as conventional edge backlights, thanks to reduced brightness and thicker form factors for wide viewing angle. Wide-viewing angle packages further reduced the required LED count. While the adoption of these new low-cost direct-type backlights will narrow the cost differential with CCFL LCD TVs, the thicker form factor and reduced brightness capability will narrow their appeal.
The lighting share of the GaN LED market is expected to surge from 21% in 2011 to 49% in 2016 with lighting LED revenues expected to grow >300% and units expected to grow >1500% over this period.
IMS Research’s Quarterly GaN LED Supply and Demand Report tracks and forecasts MOCVD shipments, LED capacity by manufacturer, LED and MOCVD supply/demand, sapphire supply and demand, sapphire pricing and quarterly notebook, monitor and TV panel shipments by backlight type, size, resolution and refresh rate. New features include separated notebook and tablet LED demand, projector forecasts and LED demand, and much more. For more information, please visit www.ledmarketresearch.com.