IHS forecasts slowing growth in GaN LED market

According to IHS, the total global revenues for GaN LED climbed by 10.6% in 2013 as the market was powered by high demand from the tablet, mobile backlighting, and lighting segments, but 2013 could also be the last year of the era of double-digit dollar growth for the GaN LED market. The global revenues rose from $11.2 billion in 2012 to $12.4 billion in 2013, but revenue growth in 2014 is projected to be at a sloppy 4%. Shipments will continue to rise, but the market will enter a period of flatness starting in 2015.

Jamie Fox, principal analyst for LEDs at IHS, reports that the combination of growing demands from the lighting and display backlighting segments has driven the strong revenue growth of the GaN LED market we have seen in recent years. However, the trend shows that LED backlighting market revenues have begun to decline even as the lighting segment as a whole continues to expand. This combination of declining growth in backlighting and expansion in the lighting segment will lead to a flat revenue for the GaN LED market in the coming years.

LEDs are used extensively as backlights for LCD panels and have found great growth due to consumer demand for products as TVs and monitors, and more recently for tablets and smartphones. However, backlighting applications will soon reach saturation and the value of the LEDs in every PC monitor and TV shipped has already begun to decrease.

The current leader in GaN LED wafer capacity is Epistar of Taiwan, but Chinese die vendor San’an is projected to take the lead. IHS reports that Epistar will continue its run at the top through most of 2014 but its dominance will end in the fourth quarter where it will be overtaken by San’an. San’an is projected to become soon the new leader due to an increase of planned installation of metal organic chemical vapor deposition (MOCVD) equipment in 2014. Alice Tao, senior analyst for LEDs and lighting at IHS notes that the Wuhu fab of San’an is planning to install another 100 GaN LED MOCVD machines in addition to the 100 that have been installed in 2011.

GaN LEDs are manufactured on sapphire, silicon carbide, or silicon wafers. GaN-on-silicon (GaN-on-Si) LEDs only account for 1 % of GaN LEDs in 2013, as the majority of GaN LEDs are manufactured on sapphire wafers. However, the growth in the manufacturing of GaN-on-Si LEDs is projected to increase between 2013 and 2020, taking market share away from sapphire and silicon carbide wafers. IHS reports that GaN-on-Si is forecast to increase its market share to 40% by 2020.

Dkins Cho, senior analyst for lighting and LEDs at IHS, reports that silicon wafers are available from 8-inch up to 12-inch in size and are generally cheaper and more abundant, while it is difficult to manufacture large ingots from sapphire entails. The large existing industry for silicon-based manufacturing can be easily redirected to LED manufacturing therefore decreasing the cost of LED fabrication by creating economies of scale. The modification of current manufacturing facilities to accommodate GaN-on-Si LEDs fabrication will likely require minimal investment.

About the Author- This article is contributed by Martini Tech Inc., a nanotechnology company based in Tokyo, Japan and specialized in LED sapphire, sputtering and thin-film deposition, GaN LED technology, MEMS design and MEMS foundry services and patterned sapphire substrates ( PSS ) for LED applications.