Global LED lighting market could grow by half in 2014

The global market for light emitting diode (LED)-based lighting solutions could see its value soar by nearly one-half over the course of next year, as the technology continues to improve and consumer awareness grows, a market advisory firm has projected. Market value for LED lighting will soar...

global-led-lighting-market-could-grow-by-half-in-2014

The global market for light emitting diode (LED)-based lighting solutions could see its value soar by nearly one-half over the course of next year, as the technology continues to improve and consumer awareness grows, a market advisory firm has projected. Market value for LED lighting will soar to US$35.3 billion in 2014, a 47.8 percent year-on-year increase.

The research firm attributed the “fast growing market” to a change in purchasing habits, as LED lighting is beginning to overtake conventional lighting in the mindset of many consumers.

Global LED lighting penetration is also expected to increase to 32.7 percent from this year’s 26 percent, the research firm predicted, while penetration of LED bulbs and tubes will reach 20 percent and 15 percent of their respective markets.

The increase in demand suggests competitive LED chip manufacturers will continue to expand production capacity in 2014, said Jack Kuo, a senior analyst with LEDinside.

Aside from raising yield rates and machine operation time, Kuo said LED chip manufacturers will be acquiring more metalorganic chemical vapor deposition (MOCVD) equipment — a major part of optoelectronics manufacturing — to expand production capacity.

MOCVD is a chemical process for the production of thin films used in semiconductors and optical equipment, which promises higher reliability and fewer imperfections in the manufacturing process.

a-made-in-China-MOCVD-machine

Global LED lighting market could grow by half in 2014

Sanan Optoelectronics plans to add 100 MOCVD sets in 2014

The largest China-based LED epitaxial wafer and chip maker Sanan Optoelectronics plans to expand production capacity by adding as many as 100 MOCVD sets in 2014, company president Lin Ke-chuang said at LEDforum Taipei 2013 on October 16.
We formerly reported that MOCVD precursor demand for LEDs...

Sanan-Optoelectronics

The largest China-based LED epitaxial wafer and chip maker Sanan Optoelectronics plans to expand production capacity by adding as many as 100 MOCVD sets in 2014, company president Lin Ke-chuang said at LEDforum Taipei 2013 on October 16.

We formerly reported that MOCVD precursor demand for LEDs is great and still growing, which led to a China factories deployment of MOCVD equipments, and Sanan Optoelectronics is just one case.

Sanan’s capacity utilization increased from 85-90% in the second quarter of 2013 to 100% in the third, Lin indicated. Sanan currently has 140 MOCVD sets and is installing 20 additional ones, equivalent to monthly capacity of 500,000 2-inch LED wafers, at the end of 2013, Lin said. In order to expand capacity, Sanan plans to raise CNY3-4 billion (US$490-654 million) through private placement, Lin noted.

Sanan has won open bids to supply 40% of LED street lamps procured by local governments in China, Lin said.

With 70% of its LED chips expected to be used in lighting and 25% in backlighting, Sanan aims at revenues of CNY4.5 billion for 2013, Lin indicated. Sanan expects revenues for the fourth quarter of 2013 to grow 5-5% sequentially, Lin said.

Sanan-Optoelectronics-Xiamen

a-made-in-China-MOCVD-machine

MOCVD_LED_Precursor_Demand_Forecast

Sanan Optoelectronics plans to add 100 MOCVD sets in 2014

MOCVD precursor demand for LEDs to more than double to 69 tons over 2012-2016

Displaybank: Global demand for precursor material used in manufacturing light-emitting diodes (LEDs) will more than double from 2012 to 2016 as the market for LED lighting booms. Precursors are core materials that ensures optimal light efficiency for each epitaxial layer in the key MOCVD process for manufacturing LED chips. Global shipments of MOCVD equipment are rising, with shipments expected to climb by 17% in 2013. The largest buyers of MOCVD equipment – South Korea, Taiwan and China- China is expected to make up 45% of global demand for precursors in 2016.

Global demand for precursor material used in manufacturing light-emitting diodes (LEDs) will more than double from 2012 to 2016 as the market for LED lighting booms, according to a new report ‘Precursor for LED MOCVD-Market and Industry Analysis’ from Displaybank (now part of market research firm IHS).

The market for precursors used in metal-organic chemical vapor deposition (MOCVD) for LED manufacturing will more than double, rising by 114% from 32 tons in 2012 to 69 tons in 2016.

MOCVD_LED_Precursor_Demand_Forecast

“The boom in the precursor market reflects the rising operating rate of MOCVD as the LED lighting market grows,” says HIS’ senior LED analyst Richard Son.

Precursors are core materials that ensures optimal light efficiency for each epitaxial layer in the key MOCVD process for manufacturing LED chips. Of the major precursors, which include trimethylgallium (TMGa), trimethylindium (TMIn), trimethyl aluminum (TMA), triethylgallium (TEGa) and C2Mg2, TMGa is the most widely used and commands about 94% of total demand.

Global shipments of MOCVD equipment are rising, with shipments expected to climb by 17% in 2013. The largest buyers of MOCVD equipment – South Korea, Taiwan and China – account for about 80% of global demand for precursors. China, which is generating the highest growth in MOCVD equipment installation among the three countries, is expected to make up 45% of global demand for precursors in 2016.

In the nascent stage of the LED market, Dow Chemical Co was the unrivaled leader in the precursor market. However, with the recent growth in precursor demand, new players have been investing in R&D and manufacturing facilities while aggressively breaking into the market with low prices for similar-quality product, says the report. Such developments will intensify competition further among precursor makers, it is reckoned.

MOCVD precursor demand for LEDs to more than double to 69 tons over 2012-2016

MOCVD Metal-organic Chemical Vapor Deposition - LED Wiki

Metal-organic Chemical Vapor Deposition, short for MOCVD, is a chemical vapour deposition method used to produce single or polycrystalline thin films. The MOCVD machine is the most critical equipment in LED chip production processes. MOCVD is also known as organometallic vapour phase epitaxy (OMVPE) or Metalorganic vapour phase epitaxy (MOVPE). It is a highly complex process for growing crystalline layers to create complex semiconductor multilayer structures. – LED wiki

In contrast to molecular beam epitaxy (MBE) the growth of crystals is by chemical reaction and not physical deposition. This takes place not in a vacuum, but from the gas phase at moderate pressures (10 to 760 Torr). As such, this technique is preferred for the formation of devices incorporating thermodynamically metastable alloys, and it has become a major process in the manufacture of optoelectronics.

a-made-in-China-MOCVD-machine

Basic principles of the MOCVD process

In MOCVD ultra pure gases are injected into a reactor and finely dosed to deposit a very thin layer of atoms onto a semiconductor wafer. Surface reaction of organic compounds or metalorganics and hydrides containing the required chemical elements creates conditions for crystalline growth – epitaxy of materials and compound semiconductors. Unlike traditional silicon semiconductors, these semiconductors may contain combinations of Group III and Group V, Group II and Group VI, Group IV, or Group IV, V and VI elements.

For example, indium phosphide could be grown in a reactor on a heated substrate by introducing trimethylindium ((CH3)3In) and phosphine (PH3) in a first step. The heated organic precursor molecules decompose in the absence of oxygen – pyrolysis. Pyrolysis leaves the atoms on the substrate surface in the second step. The atoms bond to the substrate surface and a new crystalline layer is grown in the last step. Formation of this epitaxial layer occurs at the substrate surface.

Required pyrolysis temperature increases with increasing chemical bond strength of the precursor. The more carbon atoms are attached to the central metal atom the weaker the bond.The diffusion of atoms on the substrate surface is affected by atomic steps on the surface.

The vapor pressure of the metal organic source is an important consideration in MOCVD, since it determines the concentration of the source material in the reaction and the deposition rate.

mechanism-of-the-metal-organic-chemical-vapor-deposition-of-gallium-arsenide

MOCVD Metal-organic Chemical Vapor Deposition - LED Wiki

China growing MOCVD equipment will add LED industry demand and supply stress for 2014

Due to increasing LED lighting demands, and local government MOCVD equipment subsidies, China’s MOCVD market has great growth potential in 2014. China LED chip manufacturers growing number of new MOCVD equipment will put great pressure on the LED industry demand and supply. Goldman Sachs raised its forecast for China’s new MOCVD equipment in 2014 to grow at a Year-over-Year (YOY) rate of 14% to 125 machines.

China-LED-market-pressure-2014

The market is focused on the moment that LED industry can leave oversupply behind. China LED chip manufacturers growing number of new MOCVD equipment in 2014 will no doubt put pressure on the LED industry demand and supply. China’s large LED chip manufacturer San’an Optoelectronics, and vertically integrated Elec-Tech International Co. (ETI) both have expansion plans, while Nationstar Optoelectronics Co. is planning to invest in a second phase LED chip expansion project.

China’s MOCVD market has growth potential in 2014, due to increased lighting demands, and local government MOCVD equipment subsidies, according to estimates by Goldman Sachs. At the same time Chinese manufacturers are increasing capital under the consideration of adding production capacity. Goldman Sachs raised its forecast for China’s new MOCVD equipment in 2014 to grow at a Year-over-Year (YOY) rate of 14% to 125 machines. The industry is also actively observing whether China LED manufacturers increased MOCVD will add demand and supply stress.

a-made-in-China-MOCVD-machine

According to statistics, China’s two largest manufacturers San’an Optoelectronics and ETI are projected to increase 50 and 40 MOCVD equipment respectively in 2014. Nationstar has also announced its plan of injecting more than RMB 600 million (US$ 98.2 million) in a second phase LED chip expansion project. The company is expected to raise RMB 500 million for the project. Once the factory is completed, LED epitaxal wafer annual production is expected to reach 4.11 million sheets, which will all be used for LED chip manufacturing.

In addition, Chinese manufacturers including Tsinghua Tongfan Company, HC Semitek Corp., Silan Azure Company, Zhongke Semiconductor Lighting Company also have production capacity expansion plans. Taiwanese silicon wafer manufacturer Epistar also hopes to add new MOCVD equipment in China, followed by vertically integrated Taiwanese manufacturer Lextar expanded MOCVD production capacity in China.

China growing MOCVD equipment will add LED industry demand and supply stress for 2014