21 December 2010

LED oversupply accelerating due to cut in usage per panel

LED supply growth is significantly outpacing demand growth, creating a widening surplus and increased pricing pressure, according to IMS Research’s latest ‘Quarterly GaN LED Supply and Demand Report’, which features a new LED supply and demand model built by a new global team of authors.

“LED supply is rapidly expanding on China’s MOCVD [metal-organic chemical vapor deposition] stimulus program, ramping of recently installed tools and improving yields on existing tools,” says senior VP Ross Young. “On the other hand, a significant second-half 2010 reduction in LEDs per panel is causing demand to grow slower than expected, leading to reduced fab utilization and increased pricing pressure,” he adds. “Because of China’s MOCVD subsidies, MOCVD shipments and supply growth are not slowing down, resulting in an accelerating supply imbalance that is expected to widen through 2012 if MOCVD shipments remain on schedule.”

The latest report (which reveals each panel suppliers’ quarterly panel shipments, LED panel shipments, number of LEDs per panel and LED consumption at every size, resolution and refresh rate) shows that the weighted average number of edge-lit LEDs per panel fell by about 30% in both TVs and monitors from second-quarter 2010 to third-quarter 2010 as panel and backlight suppliers further optimize their designs to reduce costs. Improvements in light-guide and LED efficiencies and optimization of optical films caused the reduction, which is contributing to a growing LED oversupply.

The latest ‘Quarterly GaN LED Supply and Demand Report’ also tracks LED consumption by panel supplier in the notebook, monitor and TV markets, where Korea’s LG Display consumed the most LEDs in notebooks in Q3/2010 and is expected to lead in Q4/2010. In monitors, LG also led in Q3, but Samsung is expected to lead in Q4. In TVs, Samsung led in Q3 and is expected to lead in Q4.

Regarding total LED consumption, Samsung led in Q3 and is expected to lead in Q4, at more than 2bn LEDs. However, LG Display is expected to lead for full-year 2010, at nearly 6bn LEDs consumed.

See related items:

China to leap from number-4 to top LED-making region by Q4/2011

China government concerned about LED investment overheating

China plans to add 1200 MOCVD reactors, including 300 in 2010

Booming MOCVD market gathers pace


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