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LED lighting to take off
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Tuesday, September 21, 2010
Following a boom in the 1980s that consisted primarily of TV remote applications and low-end indicators, LEDs (light emitting diodes) are experiencing another growth period that began in the 1990s and is going stronger than ever, driven by LCD notebook and TV backlighting applications. There's been a wild ramp-up in production, leading already to shortages in the equipment and materials used to manufacture LEDs, and predictions of more to come.
But the industry hasn't seen anything yet. The third LED market boom - with HB-LEDs (high-brightness LEDs) geared toward solid-state lighting applications - is only just getting started, and it promises to be bigger than ever. Fulfilling that demand is likely to require major changes in how the still-fledgling LED industry operates, and industry players and organizations are calling for the placement of standards and increased collaboration akin to what has taken place in the more mature mainstream semiconductor industry.
Charting a CAGR (compound annual growth rate) of 18% from 2000 to 2009 for packaged HB-LEDs overall, Strategies Unlimited expects HB-LED growth to hit 53% this year alone, reaching $8.2 billion, mainly from LED-backlit televisions and notebook monitors, with lighting as a secondary growth driver, according to Vrinda Bhandarkar, senior analyst. With a five-year CAGR for LED lighting estimated at 45%, she said, the market could reach $19.6 billion by 2014.
During 2000 to 2009, lighting was the fastest-growing LED segment at 37%, but it came from an almost non-existent start, Bhandarkar noted. During that same time period, unit brightness has improved from 30 lumens to 113 lumens per package. Meanwhile, the price per kilolumen has declined from $302 to $14.
Advances have come under Haitz's Law - somewhat of an analog to the IC industry's Moore's Law - with repeatable, historical progress on both brightness and cost of lumen per watt. It's been on a predictable curve for 40 years, and is still going strong, according to Decai Sun, senior manager of illumination product development at Philips Lumileds, one of just a handful of manufacturers dominating the HB-LED space.
Like the early years of Moore's Law, Haitz's Law has succeeded independently of industry collaboration. But it's expected that the pace of efficiency will decline, and the additional cost savings needed to reach targets for solid-state lighting will have to come from productivity and yield improvements that will likely need help from standards, according to Tom Morrow, executive vice president, Emerging Markets Group, SEMI. "Ultimately, Moore's Law a good 10 years ago required the International Technology Roadmap for Semiconductors, required highly refined collaboration mechanisms such as industry standards and manufacturing to maintain the pace of Moore's Law going forward. And we believe those will be the case in lighting too."
SEMI has some "speculative vision," Morrow said, about where those cost reductions will come from, and is supporting its existing semiconductor supply chain members in tackling the expectantly lucrative lighting market. SEMI members Veeco and Aixtron already lead the MOCVD equipment space for HB-LED applications, and Applied Materials is active there as well. Metrology companies such as KLA-Tencor, Semilab and MKS Instruments have joined the fray, along with materials companies such as Dow Chemical, Brewer Science, and Matheson Tri-Gas. The above mentioned companies are also among some 30 companies participating in a steering committee formed to help guide SEMI in its LED activities.
In general, today's LED industry looks an awful lot like the semiconductor industry did several years ago, Morrow said. "And right now it's very often a vertically integrated industry, where we have large manufacturers such as Cree and Nichia and Samsung, if not building their own equipment certainly significantly modifying MOCVD processes - highly proprietary processes and recipes that they do not share easily with the supply chain; a great deal of lack of standardization," he explained. "So this, to us and to a lot of our members, reflects the early stage of an industry that isn't able to easily get together to collaborate to address significant cost issues."
LED manufacturing is a less complicated process than IC manufacturing, and about half of the capital cost is wrapped up in MOCVD tools. "You've got all the epitaxial processes occurring in one tool, so there's not a lot of handoff, not a lot of automation between equipment and processing steps, and not a lot of ancillary equipment and interfaces going on," Morrow said. Jury-rigged and homegrown manufacturing processes are still commonplace, and a great deal of R&D and engineering focus is spent on unique customer requirements rather than improving yield and lowering costs.
LED packaging is another significant cost contributor, and is also made more expensive by highly individualized solutions. The combination of optical, thermal, and electrical performance characteristics require highly customized packaging that adds complexity and cost. The trend in this case is to move toward wafer-level packaging to address cost. Wafer-level packaging could also improve performance and reliability, and create a smaller form factor, according to Thomas Uhrmann, business development manager for EV Group.
There are opportunities for yield and cost improvements across the whole manufacturing supply chain, in fact. Although the LED industry has been around for a long time, volumes have never before reached today's levels, and expectations for the emerging solid-state lighting market are exponentially higher.
Capturing a significant portion of the general lighting market will lead to an ultrahigh-volume commodity product that will need to be produced in a highly automated fashion from first epi all the way through to final luminaire, contended Chris Moore, president and CEO of Semilab. "From the plus side, the IC sector can bring the automation experience and the knowledge of how to finance, build and run effectively the very large capital-intensive facilities that will be needed in the future," he said, noting, however, that IC players are more used to working with higher-value die on silicon, so there will be a learning curve.
"No matter how the industry goes it is clear that properly done standards will play a significant role, and this is everything from standardizing substrate sizes though carriers and finally automation," Moore said. "Like all industries, the HB-LED business is in the early stages where each producer worries about losing their ‘technical' advantage if they go to standards. The down side for them is that means that often equipment is made as specials for particular customers, which raises the equipment prices and makes rapid scaling difficult at the equipment supplier level."
Standards have been a key area of interest to extend and leverage SEMI's core competencies into the LED arena. Although still in early stages, SEMI's standards committee activity is looking primarily at sapphire wafers and wafer carriers, "to get certain geometries and markings identified that don't really change the proprietary and competitive advantages issues, but allow wafer manufacturers to sell to multiple customers in a productive way and get people thinking about their recipes and processing rather than subtle but critically important differences between wafer geometries, and get them also focusing on some of the key requirements for automation," Morrow said.
SEMI has also been talking with the US Department of Energy (DoE), advocating for R&D and manufacturing funding in this area. In January, the DoE granted $37.8 million to solid-state lighting development, $23.5 million of which was given in the manufacturing space to Applied Materials, GE Global Research, GE Lumination, KLA-Tencor, Philips Lumileds, Ultratech, Universal Display, and Veeco Instruments. "But that level of funding is not going to be sustained," Morrow said.
Nonetheless, Bhandarkar noted the lighting market offers a great opportunity for the LED industry because of a confluence of four major trends: The technology has reached a stage where it can offer feasible solutions in most lighting applications; LEDs offer energy efficiency, which is the new mantra; regulatory bans on incandescent light bulbs are a huge opportunity; and fiscal stimulus aimed at building an energy infrastructure may help to push volumes high enough to decrease prices in LED lighting products.
Getting past batch processes based on highly variable manufacturing and on to more standardized, automated production should also help bring costs down. But this will take some time. "I think everyone's really busy right now with just meeting the enormous demand driven by the backlighting industry that's keeping everybody busy - ship whatever you can make," Morrow said. "And as some of that pace lessens, and some of these harder targets to reach at the lighting end of the market start revealing themselves, people will need to work together to reach those cost objectives and open up these markets."
By: DocMemory
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