26 July 2010


Yields critical for LED chipmakers as material shortages persist

With continual supply shortages, prices for metalorganic gases have risen by 100% in third-quarter 2010, putting pressure on LED chipmakers to improve yield rates to maintain gross margins, according to a report by Taiwan-based publication Digitimes.

Some LED chipmakers are reportedly planning to shut down older equipment producing low-brightness LED chips in order to use the limited materials on more advanced equipment manufacturing more profitable high-power LED chips.

According to Taiwan-based LED chipmaker Tekcore, manufacturers with yields less than 60% are likely to incur losses, with both metalorganic gases and sapphire substrates in tight supply. Companies that focus on producing less profitable LEDs with luminous intensities of less than 2000mcd (the minimum for most LED-backlit LCD TVs) will also have a tough time in the near future, Tekcore adds.

Metalorganic gases and sapphire substrates account for about 20% of LED chip production costs, and the percentage is likely to rise during second-half 2010, according to the report.

See related items:

LED prices likely to rise 5-10%, say Taiwanese chipmakers

LED market explosion hampered by materials shortage

Sapphire faces shortage in second-half 2010, to be resolved in early 2011

Sapphire to exceed 50% of compound semiconductor substrate processed surface area from 2011

Taiwanese LED makers expanding to meet backlighting demand

LED market to grow from $7bn in 2009 to $10.7bn in 2010 then $20.4bn in 2012

LED-backlit TVs to reach 20% of 180m-unit LCD TV market in 2010

Search: LEDs LED backlighting Metalorganic Sapphire