5 January 2012

LED fab equipment spending to fall 18% in 2012

Following a massive 36% increase in equipment spending in 2011, worldwide LED manufacturing equipment spending is projected to decline 18% in 2012, according to the latest Opto/LED FabWatch and Forecast from global industry association Semiconductor Equipment and Materials International (SEMI). LED manufacturing capacity is expected to reach 2 million wafers in 2012 (4” equivalent per month), a 27% increase over 2011.

After several years of rapid capacity expansion driven by high-brightness light-emitting diodes (HB-LED) used in TV backlighting applications — reinforced by lucrative government incentives and economic development funding in China — a 40% decline in global metal-organic chemical vapor deposition (MOCVD) purchases in 2012 will reduce overall LED equipment spending for the first time in over five years, forecasts the report. However, spending for non-MOCVD equipment, particularly in lithography, etch, test and packaging equipment, will increase in 2012, as manufacturers optimize their production lines and improve their product designs.

While HB-LED demand continues to grow in solid-state lighting, HB-LEDs used in liquid-crystal display (LCD) TV backlighting units (about 40% of the total HB-LED market) failed to reach growth expectations in 2011. Total TV unit sales missed growth targets, and the penetration of LED backlighting as part of total LCD TV unit sales did not reach the levels that many experts predicted. LEDs used in solid-state lighting, currently totaling about $2.5bn, may exceed $30bn by 2020, according to many estimates.

“Similar to other microelectronics industries, LED manufacturing capacity and technology investments will vary year-over-year, but will correspond with the long-term demand driven by key applications; in LEDs, this will be primarily solid-state lighting,” says Tom Morrow, executive VP, Emerging Markets Group, at SEMI. “Future equipment and capital spending will drive LED cost reduction through larger wafers, automation and dedicated equipment specifically designed to improve LED manufacturing yield and throughput,” he adds.

Regional equipment spending shows China continuing to lead, with an expected $719m planned for 2012, followed by Taiwan ($321m), Japan ($300m) and Korea ($260m). Taiwan will continue to lead in capacity, at 25% of global LED capacity, followed by China at 22%. SEMI counted 29 new LED fabs in 2011. For 2012, it forecasts 16 new fabs coming online.

Looking at the back-end of the LED market, the recent ‘Global Semiconductor Packaging Materials Outlook’ published by SEMI and TechSearch Inc shows very strong growth in LED leadframe shipments. Following the 69% unit shipment growth in 2010, LED leadframe shipments are estimated to have risen by a further 10% in 2011. In 2012, shipments are forecasted to reach almost 83 billion units. Data are based on shipments reported by 16 leadframe suppliers.

See related items:

Global LED capital spending forecast cut by 13% due to LED TV sales slowdown

LED fab equipment spending triples in 2010, driven by China

Tags: LED fab equipment LCD TV market LEDs MOCVD

Visit: www.semi.org/en/Store/MarketInformation/OptoLEDFabForecast

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