Following a massive 36 percent increase in equipment spending in 2011, worldwide LED manufacturing equipment spending is projected to decline 18 percent in 2012, according to the latest Opto/LED FabWatch and Forecast from SEMI.
Worldwide LED manufacturing capacity is expected to reach two million wafers in 2012 (4” equivalent per month), a 27 percent increase over 2011.
After several years of rapid capacity expansion driven by high-brightness light-emitting diodes (HB-LED) used in TV backlighting applications— reinforced by lucrative government incentives and economic development funding in China— a 40 percent decline in world metal organic chemical vapor deposition (MOCVD) purchases in 2012 will reduce overall LED equipment spending for the first time in over five years. Spending for non-MOCVD equipment, however, particularly in lithography, etch, test and packaging equipment will increase in 2012, as manufacturers optimize their production lines and improve their product designs.
While HB-LED demand continues to grow in solid state lighting, HB-LEDs used in liquid crystal display (LCD) TV backlighting units— presenting approximately 40 percent of the total HB-LED market— failed to reach growth expectations in 2011. Total TV unit sales missed growth targets and the penetration of LED backlighting as part of total LCD TV unit sales did not reach the levels that many experts predicted. LEDs used in solid state lighting, currently totaling approximately $2.5 billion, may exceed $30 billion by 2020, according to many estimates.
“Similar to other microelectronics industries, LED manufacturing capacity and technology investments will vary year-over-year, but will correspond with the long-term demand driven by key applications; in LEDs, this will be primarily solid state lighting,” said Tom Morrow, executive vice president, Emerging Markets Group, at SEMI. “Future equipment and capital spending will drive LED cost reduction through larger wafers, automation and dedicated equipment specifically designed to improve to LED manufacturing yield and throughput.”
Regional equipment spending shows China continuing to lead with an expected $719 million planned for 2012, followed by Taiwan ($321M), Japan ($300M) and Korea ($260M). Taiwan will continue to lead in capacity at 25 percent of the world LED capacity, followed by China at 22 percent of world LED capacity. In regards to new fabs, SEMI recorded 29 new LED fabs in 2011. For 2012, SEMI forecasts 16 new fabs coming online next year.
Looking at the back-end of the LED market, the recent Global Semiconductor Packaging Materials Outlook by SEMI and TechSearch Inc. shows very strong growth in LED leadframe shipments. Following the 69 percent unit shipment growth in 2010, LED leadframe shipments are estimated to increase by another 10 percent in 2011. In 2012, shipments are forecasted to reach almost 83 billion units shipped. Data are based on shipments reported by sixteen leadframe suppliers.
Estimated LED Leadframe Unit Shipped Globally (in billions of units)
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