Bright Forecast for LED

Economic News

22 Jul 2010
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From its humble beginnings as a small light indicator in electrical devices such as hi-fis and clock radios, the light emitting diode (LED) has grown into a multi-application global industry of which Taiwan is keen to secure an even bigger slice. The country is second only to Japan in terms of annual LED production worth $1.4bn, which is 23% of the global market.



This month the Industrial Development Bureau (IDB), under the ministry of economic affairs (MOEA), launched a four-year programme to expand the white LED industry's global reach yet further. The programme aims to deliver training, increase investment and international cooperation in the industry as well as develop testing standards.



With regard to the latter, this month it was announced that two consortia of 15 Taiwanese LED manufacturers had been formed to develop industrial standards and automobile applications for the technology. Each will receive a government subsidy; the industrial standards consortium will get $2.6m and the automobile application group will receive $1.8m. The two were organised by the government-backed Industrial Technology Research Institute at the request of the IDB.



Another step in developing the industry is a $4.6m subsidy the ministry just announced. Earlier this year the MOEA said a total of $60.6m would be spent on developing the industry over the next four years with the aim of boosting the total production value of white LEDs to $16.36bn by 2015.



In the four decades since the LED was invented, advances in technology have vastly improved the brightness and colour possibilities. When the high brightness blue LED became widely available in the 1990s, it paved the way for white LED light (originally produced by combining blue LED with another colour to produce white) and opened up a host of potential possibilities in illumination, which continue to increase as LED luminous efficiency improves. Because LEDs produce more light per watt than do incandescent and fluorescent bulbs and do not contain mercury, they are increasingly in demand as an environmentally friendly form of lighting.



Almost half of all traffic lights in Taiwan already use LEDs; the remaining 420,000 traffic lights will be replaced with LEDs under a $7m MOEA programme over the next three years. An MOEA survey asserted that the switch to LED would cut traffic light electricity consumption by 85%. A subsequent $3.9m programme will convert all of the island's street lamps to be powered by LEDs.



This year US-based Apple launched its first notebook to incorporate white-LED display, as part of a drive to increase energy efficiency and eliminate mercury from all of its products. Korea's Samsung recently announced it would be introducing a notebook also using the white LED and other notebook makers are expected to follow



While mobile phone handsets currently represent the main destination of white LEDs, notebook screens are expected to overtake them as global mobile phone demand is expected to slow in the next few years.



Meanwhile LCD television makers are beginning use LED to backlight their products. US-based IMS Research forecasts these new backlighting applications will drive the market for LEDs in backlighting and cause the market to grow to around $4.5bn by 2012.



According to a Merrill Lynch report released earlier this year, the Taiwanese LED industry is well positioned to capture growth, and will be able to leverage its proximity and cooperation with major local handset, notebook computer and liquid-crystal-display panel makers to enable local companies to continue to boost their scale and importance.



Taiwanese firms are responding to growing demand in a number of ways including mergers, finance raising and expansion projects. In August, Touchtek and Uni Light Technology, two Taiwan-based LED chipmakers, merged to become Touchtek, taking the combined entities' LED chip production capacity to 700m units per month.



In July, Wellypower Optronics, Taiwan's largest manufacturer of lamps for computer monitors and television screens was reported to be setting up a new facility at the Kuang-Yuan Science-Based Industrial Park in Chunan, China, to produce LED products. The company has announced plans to raise its LED production capacity from its current 2m to as many as 12m pieces per month before the end of the year, in response to increased customer demand. Wellypower's vice president, Tony Chang, told local press the company anticipates its LED sales to double next year.



This month, LED maker, Everlight Electronics filed with the Taiwan Stock Exchange to issue its third set of domestic convertible bonds in a capital raising exercise. With a value of $91.8m, the raised funds will be used for construction and equipment procurement purposes. The company is expected to begin construction of its new $396m headquarters later this year. Its chairman, Robert Yeh, was reported as saying the market outlook for LEDs in the last quarter of this year was above expectations.

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