LED shines light in bleak market

LEDs stand out against the backdrop of a declining semiconductor industry as an expanding market, according to iSuppli Corp.

The research and advisory service says, due to rising demand from LCD-TV makers the LED market will expand in 2009 and enjoy a revenue increase of 2.9 per cent in 2009. This follows a 10.8 per cent growth in 2008. In contrast, according to iSuppli the overall semiconductor market is set to decline by 9.4 per cent in 2009.

Senior vice president of market intelligence services for iSuppli, Dale Ford predicted LED growth and said it was a “highly unusual item” in the company’s bleak semiconductor forecast.

“Of the 12 major semiconductor categories tracked by iSuppli in its Application Market Forecast Tool (AMFT), nine are expected to suffer revenue declines in 2009 - ranging from memory chips, to logic Integrated Circuits (ICs), to power transistors. Although a 2.9 per cent increase is only a moderate rise by the standards of the semiconductor industry, any revenue growth at all this year will be a remarkable accomplishment.”

The LCD-TV market in 2009 will consume $163 million (€123 million) worth of LEDs, up 221.9 per cent from $51 million in 2008, according to iSuppli. By 2012, LCD-TV LED revenue will grow to $1.4 billion, nearly nine-times more than 2009.

LEDs are used in LCD TVs to illuminate the display. LCDs are a transmissive display type, meaning they do not generate their own light and therefore need a separate illumination source, known as a backlight. Most LCD displays traditionally have used Cold-Cathode Fluorescent Lamps (CCFLs) as the backlight. However, the declining prices of LEDs are making them a viable competitor to CCFLs.

While the overall mood of television makers at the Consumer Electronics Show (CES) in Las Vegas this month trended toward doom and gloom, there was some optimism regarding the use of LED backlighting in new LCD-TVs.

“One positive message was issued by LCD-TV makers at CES: LED backlighting and thinner form factors represent the future of the market,” said Riddhi Patel, principal analyst, television, for iSuppli. “These two things go hand in hand, with edge-mounted LED-backlight systems enabling thinner sets, which are more attractive to consumers.”

LED-backlit LCD TVs also consume less electricity than their CCFL-equipped counterparts.

“A majority of LED backlit LCD TVs comply with Energy Star requirements,” commented Patel. “This is an attractive feature for consumers, who have come to view the Energy Star label as a guarantee of greenness and reduced energy costs.”

Declines in prices and newer higher-brightness LEDs are enabling their usage as backlights in LCD TVs. Average pricing for LEDs is on the wane, allowing LED-backlit sets to become more price competitive with comparable CCFL sets. Patel estimated the price premium for 40- to 42-inch LCD TVs using LEDs now is as little as $200 to $500 compared to CCFL alternatives.

Second-tier brand General Electric (GE) sees LED backlighting as a chance to carve out a new market niche.

A joint venture between GE and Tatung “will produce LED-based LCD TVs and try to do what Westinghouse did a few years ago when it came into the market with lower-priced LCDs,” said Patel. “As more LED-backlit LCD-TV brands enter the market, competition will intensify and prices will decline.”

Sweta Dash, director of LCD research for iSuppli, has studied the effect LED backlighting has on the quality of an image, pointing out that, whilst LED enables thinner form factors, there is no major improvement in contrast ratios.

Contrast ratio is the ratio of the luminance of the brightest colour to that of the darkest colour that a television is capable of producing. Televisions with superior contrast ratios get rid of excess off-state light when a LCD pixel is turned off, delivering a better picture.

Jagdish Rebello, director and principal analyst for LED research at iSuppli said there was no improvement in picture quality when using LED.

“In terms of image quality, using a edge-mounted LED backlighting design in a large sized LCD TV is like putting a Ferrari engine in a Ford Pinto. There is no improvement in picture quality and the colour gamut of the display is actually less than when using a CCFL.”

Dash added that an alternative approach to using LEDs in LCD TVs, the full-array backlight, provides sharp improvements in contrast ratio.

The highest quality images on LCD-TVs, according to Randy Lawson, senior analyst, digital television semiconductors for iSuppli, were “sets that use the full-array backlight”.

iSuppli expects LCD-TV makers will offer a mix of thin form-factor edge-mounted designs and high image quality full-array alternatives during the coming years.

Another aspect of image quality hinges on the type of LEDs used in LCD TVs. Most LED-backlit LCD TVs now employ white LEDs, rather than the more costly Red, Green, Blue (RGB) alternatives. RGB LEDs provide a superior colour gamut than white LEDs, providing richer and more varied colours in television sets.

Patel said: “RGB LEDs are tidy and are the ideal best solution for LCD backlighting. But pricing is still too high and these won’t show up in LCD TVs in significant numbers until 2010.”

Beyond televisions, LEDs are used for backlighting of desktop monitors and notebook PC LCD displays. LEDs also have strong growth potential as replacements for light bulbs in general illumination applications.