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With 95% of handsets already using LED backlighting, LED makers estimate that LED shipment growth will slow next year to the 10% range, a growth rate just slightly ahead of the forecasted 9.1% growth for the overall global handset market, according to data from Digitimes Research.

Market analysts expect LED shipment growth in the handset market to be driven by the ‘white-box’ handset market, which will expand at a compound annual growth rate (CAGR) of about 25% between 2006 and 2010, with shipments of white-box handsets in China market reaching 40-60 million units this year. The analysts explained that, while in the past China-based white-box handset makers were pushing low-priced models, they are now seeing increased demand in China for higher-end products, which use LED backlights as well as LED-based flashes for cameraphones.

With the market for LED backlighting for handset applications maturing, pricing for handset-use LEDs has been dropping and, according to the LED makers, the overall production value of the handset LED market will decrease over the next two years, with related price quotes falling by about 30%.

However, despite the falling prices, Taiwan-based makers will see increased opportunities for shipment growth, as Japanese LED players are withdrawing from the handset-use LED market amid profit concerns, reckons Digitimes Research.

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