19 July 2010


Component shortages limiting growth of LED backlight units for LCD TVs

The LED backlight unit (BLU) has emerged as a key factor in the TFT liquid-crystal display (LCD) industry, and is expected to maintain its growth momentum for the next several years as shipments surpass those of CCFL backlights in all large-area TFT LCD panels and achieve 80% penetration in fourth-quarter 2012, according to market research firm DisplaySearch’s latest ‘Quarterly LED Backlight Report’.

Picture: LED backlight unit penetration rate in 10”+ TFT LCDs.

The firm asserts that, due to slim design, low power consumption and the fact that it enables high display performance, there is no doubt that the LED will be the mainstream light source in all LCD applications. This represents an opportunity for suppliers of display materials, e.g. optical polymethyl methacrylate (PMMA) used in light guide plates, white polyester (PET) for reflector film, and sapphire for LED wafer substrates.

However, in first-quarter 2010 LCD makers suffered from key component shortages related to LED backlights. PMMA shortages have limited production of TV light guide plates, many reflector film suppliers were stretched between demand from LCD and solar cell applications, and many LED makers faced a sapphire substrate shortage.

“Many LCD makers didn’t recognize the limited capacities of key material suppliers before fixing their LED TV panel shipment targets,” says DisplaySearch research director Kevin Kwak. “In particular, PMMA and PET are in significant shortage. PMMA and PET suppliers are slowly expanding capacity, since they need time to add new plants and face financial limitations,” he adds.

How can supply chain participants address component shortages? In the case of LEDs, multi-vendor LED qualification and improved LED BLU design minimizing the number of chips can both help. Also, joint investments between LCD makers and PMMA suppliers can be a solution for securing light guide plate material.

“To expand the LED-backlit LCD TV business successfully, LCD TV panel or TV set makers need to consider product competitiveness, including effective procurement, design innovation, cell business models, and sales strategies, because many consumers feel the price of LED-backlit LCD TV sets are still too high,” notes Kwak.

See related items:

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

LEDs to surpass CCFL in large-area TFT LCD backlights in 2011

Search: DisplaySearch LED-backlit TVs