- 29 November 2005 -

HB-LED market grew 46% annually over 10 years; consolidation won't halt innovation, says report

Over the 10 years from 1995 through 2004, the high-brightness LED (HB-LED) market grew at a remarkable average annual growth rate of 46% to $3.7bn in 2004, says market research firm Strategies Unlimited in its report ‘High-Brightness LED Global Supplier Analysis’.

This was supported by growth in the HB-LED supply industry, in terms of both the organic growth of existing (‘legacy’) LED manufacturers and new entrants to the market, mostly located in Asia. In 2005, the number of companies supplying HB LEDs at different levels of the vertical supply chain exceeds 100 worldwide.
The HB-LED market continues to be dominated by the largest companies, most of which have existed from at least the mid-1990s, if not much earlier. In terms of the $3.7 billion market for packaged HB-LEDs in 2004, over 50% is supplied by just the top five companies, and nearly three-quarters is supplied by the top 10 (out of a total of 48 companies identified and profiled as packaged HB-LED suppliers).

A similar situation holds true for companies supplying epitaxial wafers and chips to the $890 million merchant market for these materials in 2004. The top three suppliers account for over 50% of the market and the top 11 for over 75% (out of 30 identified and profiled as supplying epitaxial wafers and/or chips).
After 10 years of existence, the global HB-LED industry is not highly integrated, says Strategies Unlimited. Out of 74 companies analyzed in the report, just 12 (16%) are completely vertically integrated, from epitaxial wafer and chip production through packaging. Of the remaining non-vertically integrated companies, 26 (35%) produce epitaxial wafers and/or chips only, while the most companies, 36 (49%), produce packaged HB-LEDs from purchased chips.

In 2005, even as new suppliers enter the market, the number of established competitors is beginning to shrink, especially in Asia. Merchant Taiwanese chip suppliers Epitech and South Epitaxy merged in July 2005, and Epistar and UEC are expected to complete their merger by the end of the year. Other mergers and acquisitions are expected in 2006 and beyond. Overall, Asia remains the largest source of HB-LED supply, accounting for 76% of the packaged HB-LED market, and 57% of the merchant epitaxial wafer and chip market in 2004.

According to Robert Steele, Strategies Unlimited’s Director of Optoelectronics Programs, “in spite of some industry consolidation, we can expect to see new HB-LED suppliers continue to enter the market, with either new packaging concepts or new device structures based on innovative technologies such as photonic crystals. Although it is more than 10 years old, the HB-LED industry is far from mature, and new companies with new ideas will continue to help propel the industry to new frontiers in both technology and applications.”

Web: http://www.strategies-u.com