Falling prices, improved performance give luster to LEDs

LEDs have been in the industry for some time, but only recently have improved performance and falling costs led to it being embraced by manufacturers and consumers alike, says industry watcher.
Written by Kevin Kwang, Contributor on

Haitz's Law, which is similar to the semiconductor industry's Moore's Law, is opening up new opportunities for manufacturers to include light-emitting diodes (LEDs) in their products, and this is driving industry growth, says a SEMI executive.

According to Thomas Morrow, vice president of global expositions and marketing at SEMI, Haitz's Law states that for every decade, the cost per lumen falls by a factor of 10, while the amount of light generated per LED package increases by a factor of 20 for a given wavelength of light.

"The industry has been progressing along the predictions of Haitz's Law, which has made accessible new and more demanding markets for LEDs," he noted in an e-mail.

Morrow's perspective is echoed by Gartner's research vice president Jim Walker. The latter pointed out that price of LED lamps, which made up 95 percent of the LED market in 2009, "fell significantly" to within the range demanded by the market as replacements for conventional cold cathode fluorescent lamps (CCFLs) and fluorescent bulbs in lighting fixtures. At the same time, LEDs offers low power consumption and space-saving advantages.

In his e-mail to ZDNet Asia, Walker also cited increasing demand for environmentally-conscious and energy-saving products as reasons for an upsurge in LED usage.

Increase in LED investment
This growth in demand has seen more dedicated LED wafer fab facilities being built, with Taiwan Semiconductor Manufacturing Company (TSMC) and De Core Nanosemiconductor both reported to have announced plans for such facilities.

EE Times reported in March that TSMC broke ground for a wafer fab and research and development (R&D) facility to "develop and make LEDs for lighting applications".

"LED lighting is a promising industry, and we will make full use of TSMC's technology leadership and manufacturing excellence in semiconductors to develop and integrate LED technology, process, and packaging and testing," said Rick Tsai, president of new businesses at TSMC, in the article.

In the same month, EE Times also reported that De Core Nanosemiconductor, a subsidiary of De Core Science & Technologies, would be investing 900 crore rupees (about US$200 million) to build a wafer fab for LEDs in India.

According to a separate article by online news site DNA, this facility will support the company's LED lighting systems plant. "The LED [lighting systems plant] is expected to commence in two months. For these LED lamps, we need chips which we decided to produce in India. Making chips in India will bring down the cost of LED lamps," said Deepak Loomba, MD and CEO of De Core Science and Technologies, in the report.

Room for reducing costs
But while LED prices have fallen, some industry watchers think this still compares poorly with conventional lighting solutions such as fluorescent bulbs.

A NXP Semiconductors spokesperson noted in his e-mail that "LED lighting is not the cheapest lighting solution", while Kevin Kwak, an LED analyst at DisplaySearch, pointed out that there's still room for LED prices to fall by improving production volume and yield.

SEMI's Morrow agreed with Kwak, saying that further cost reductions must come from manufacturing improvements in "yield and productivity". In order to progress on Haitz's Law, the industry will need to have effective, ongoing, broad-based collaboration, too, he added.

"Typically, this [collaboration] takes the form of technology roadmaps and industry standards. We believe the LED industry will move increasingly toward industry standards that lower costs, similar to the semiconductor industry," said Morrow.

LEDs to flourish
When asked which industries LEDs will flourish in, another Gartner research director, Masao Kuniba, told ZDNet Asia the technology will be used in the lighting sector to replace fluorescents in the near future and will be a "milestone" achievement for the LED industry.

"Home lighting has a high potential because of the huge global consumer volume," he added.

LED as the primary source for lighting in TVs, particularly high-end LCD TVs, is another area where the technology will do well in, said the NXP representative.

"As TV panel sizes have increased, it has become far more difficult for manufacturers to avoid dark regions on the screen. LED backlighting ensures even lighting across the entire panel, allows for thinner panels, and is highly energy-efficient and reliable," he said.

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