Ledinside: 2013 Led Industry Outlook-Ledforum 2012 Taipei

LEDinside: 2013 LED Industry Outlook- LEDforum 2012 Taipei
2013 LED Industry Outlook

-LEDforum 2012-
Roger Chu
Director of Green Energy Division
November 02, 2012
LEDforum 2012 Taipei
ALL RIGHTS RESERVED. REPRODUCTION PROHIBITED WITHOUT WRITTEN PERMISSION.
8 November 2012 | Page 1
Our Research Category for Green Energy
Market Intelligence
(DRAM,Flash)
(LCD Panel)
(LED)
(PV,EV/Battery)
Outline
1) LED Industrys Past & Future Prospects
2) LED For Backlight Application Entered a Mature Market
3) LED Lighting Development in Regions
4) How Apple Change the LED Industry
LED Industrys Past & Future Prospects
LEDs ASP Dramatically Plummeted in 2011~2012

LED chip & package prices in 2H12 showed a slight decline mainly because manufacturers were not
making profits from price competition. Also, a further price decline would no longer be the way to
stimulate the market demand.
LED Chip Price (2011~3Q12)
45*45 mil
10*23 mil
0.400
0.0250
LED PKG Price (2011~3Q12)

High
Power
1.20
5630
0.15
0.12
0.0200
0.300
0.0150
0.200
0.0100
0.100
0.80
0.09
0.06
0.40
0.0050
45*45 mil
10*23 mil
High Power (100~120LM/W)
3Q12
2Q12
1Q12
4Q11
3Q11
0
2Q11
0.00
1Q11
0.0000
0
0.000
0.03
5630
Worldwide LED Package Manufacturers Performance

WW Top 10 LED PKG Makers Ranking
(Millions of USD)
NO.
NAME
2011
Nichia (JP)
2,565
Samsung LED(KR)
1,055
OSRAM Opto. (EU)
1,046
CREE (US)
954
LG Innotek (KR)
808
Lumileds(US)
680
Seoul Semi (KR)
661
Everlight (TW)
551
Liteon (TW)
424
10
Toyoda Goesi(JP)
362
2012(F)
YoY %
Apples orders
Backlight
market share
increases
Entering
downstream
market
LED for Backlight Application

Entering a Mature Market
When Smart Phone Panel Size Gets Bigger and Bigger.
What is the optimize panel size?
3.5 IPS
4.0 IPS
What is the optimize panel size for smart

phone? No one knows yet, but it seems using
larger panel is a favorable trend.
iPhone 4S
iPhone 5
Large Panel Size & High Resolution
4.3 OLED
4.8 OLED
Touch Panel Cause Keypad Demand to

Decrease
Increasing Camera Pixel
Galaxy S2
Galaxy S3
LED Backlight Market Value and LED Shipment

LED Revenue
LED Shipment %
LED Backlight Market Value
M USD
TV
Mobile
Monitor
Tablet PC
LED Shipment in Backlight Market

Notebook
5,000
TV
Mobile
Monitor
Tablet PC
Notebook
100%
3,951
4,000
2,634
80%
15%
19%
23%
27%
34%
30%
2012
2013
3,000
60%
2,000
40%
1,000
20%
2011
2012
2013
2014
2015
2016
2012-2016 CAGR -9.5%
0%
2011
2014
2015
2016
LED Lighting Development in Different Region
Various Kinds of LED Lighting Demand in the World

European countries favor residential and commercial lighting fields.
Japan favors replacement market, like lamp, tube light, and ceiling light fields.
Asian countries ,i.e. China , India ,Taiwan etc. favor LED streetlight, traffic signal, and commercial
lighting fields.
Residential Light
Commercial Light
Replacement Lamp
Replacement Tube
Ceiling Light
LED Street Light
Commercial Light
Residential Light
Commercial Light
LED Traffic Light

LED Street Light
LED Street Light
Commercial Light
LED Street Light

Commercial Light
Japan to Ship 29.5 Million LED Lamps in 2012,

Performance Stayed Flat
From January to July 2012, Japan has shipped about 15.3 million (+20.6% YoY) LED lamps. The market
penetration is about 23.4%.
The demand in 2012 is lower than expected, mainly because energy-saving awareness has increased after the
earthquake occurred in 2011, causing demand to pick up earlier. Since an LED lamp has an average lifetime of
40000 hours, it's unlikely to replace a new lamp in 10 years when a family uses 50 hrs/week. Therefore, LEDinside
estimates that the LED lamp shipment in 2012 merely increases to 29.5 million (+2.6% YoY).
Thousands
of Units
Monthly Lamp Shipment

LED
CFL
LED Lamp Sales in Japan
Incandescent Lamp
Millions of units
16,000
160
LED
14,000
12,000
CFL
Incandescent Lamp
120
10,000
8,000
80
6,000
4,000
40
2,000
-
Jan/11
Apr/11
Source: JELMA, October 2012
Jul/11
Oct/11
Jan/12
Apr/12
Jul/12
2008
2009
2010
2011
2012
2013
2014
2015
Source: LEDinside, October 2012
Taiwan:
Street Light Replacement & Residential LED Lamp Subsidies
Street Light Replacement Proposal
Ministry of Economic Affairs, R.O.C. (MOEA) will carry out
the three main energy-saving programs, "LED Street Light
Demonstration Plan" , "LED Street Light Energy
Conservation Demonstration Project 2012" and "Enlarging
LED Street Light Placement Energy Conservation
Project", starting from 2012.
Streetlights are being replaced by

LED streetlights from 2012
MOEA has planned to invest 2.43 billion NTD and replace

326,000 mercury-vapor street lamps with LED
lamps, which would save approximate 0.14 Billion kilowatt
hours of electricity and 87,500 tons of carbon dioxide.
MOEA expects to create 4.5 billon NTD of annual
production value.
Household LED Lamps Subsidy Program
MOEA has announced to provide subsidies for at least
millions of lamps, deducting about half the price (200NTD)
from a single lamp. The program would cost MOEA 1 billion
NTD and is expected to propose in a month's
time, benefiting mainly the LED lamp sector.
LED Lamps Selling at

Taiwans Convenience Stores
China: Government Subsidies Dominate Market Demand

Subsidy support has gone towards application market, but the need for government to stimulate
upstream demand still exist in the upstream market.
In 2H12, the annual SSL Products fiscal subsidies has been announced. The government would invest
1.6 billion RMB in the LED lighting sector, and the subsidies account for 30%-50% of the product prices.
Fiscal Subsidies For SSL Products
in 2012/2013
Subsidy
Number of Winning Companies

By Area
14
Government
Subsidy
30%
12
12
10
8
Beijing
Zhejiang
Sichuan
Shanghai
Jiangsu
Downstream
Market
0
Fujian
Sales
Consumer
Price
Guangdong
Corporate
Price
Others
Shanxi
Shandong
Shanxi
Liaoning
Jiangxi
Bidding
Price for
Luminaire
Introduction of Energy Management Contract (EMC)

Costs in different stages of EMC projects
Clients
profit
Energy cost
Before project
implementation
Project input
& service cost
Energy cost
Service
cost
After project implementation

During contracted period
Energy cost
After project implementation

After contracted period
EMC model is created for energy saving benefits by using LED lighting.
Operating mechanism: making sure energy saving target, service, guarantee of investment and technology
through contract. The whole energy saving process is completed by Energy Saving Company (ESCo). During
contracted period, ESCos returns on investment and profit are paid by energy saving benefit; the project
ownership and management such as equipment maintenance and energy saving test belongs to ESCo during
each contract period. After the contract period, ESCo should transfer all the energy saving equipments to the
client company for free, as well as train managers and write management guide. Afterwards, the client
company will operate on its own, and ESCp takes all the technical and investment risks of energy saving
renovation.
Introduction of Build Transfer (BT) Mode

Government
Basic process of BT model
Project approval
BT Contract
Bank or other Financing
financial
Loan
institution
General plan of
project construction
Investor
Financing
Proportionally
amortize investors
investment and
construction cost as
agreed total price (or
measured total price
plus reasonable
payback).
Investment
attraction leading
group
Investing
Establishing
Project
company
Construction
Completion
& transfer
Buy-back
BT refers to Build Transfer, it is a financing mode that government uses non-governmental capital to
implement basic non-operational facility construction project. BT mode is a converted mode of BOT (Build Operate Transfer), the project company takes the project contracting, and transfers to owner after
financing, construction and acceptance. The owner pays investor the total investment of the project plus
reasonable payback. At present, using BT mode to raise capital for construction becomes a new way of project
financing.
LED Lamp Prices Decline to Stimulate Market Demand

LED lamps retail prices have dropped by 30~40% and caused the lighting market to expand rapidly.
Improved LED Performance Reduces Costs

The lumens-per-dollar of high power LEDs are less competitive than those of the medium or low power LED
packages such as 3014 package or 5630 package, leading to a continual transition of medium or low power
LED from backlight application market to lighting application.
LEDinside point out the medium or low power LED products in 2013 are going to be the dominant modules
in the LED lamp and LED tube light markets, where the prices will remain highly price competitive.
USD
40W Equiv. Lamp Cost
KLM/$
25
Others
20
$15~17
15
$4~6
10
5
18
Assembly
15
Screw+Glue
12
Housing
Heat Sink
Optics
AC/DC Driver
LED
LED PKG Price Comparison
Middle Power LED (@120mA)

High Power LED (@ 350mA)
High Power LED (@ 1,000mA)
6
3.01
1.38
1.08
1Q10 3Q10 1Q11 3Q11 1Q12 3Q12 1Q13
2009 2010 2011 2012 2013 2014 2015
LED Lamp Price Projection
40W equiv. LED lamp price is expected to decline steadily, with quarterly 6-8% price erosion
projected, and the sweet point of USD 10 took place in 1H12.
More price erosion is expected to happen on 60W equiv. lamp since its a major lamp market
battleground. More aggressive price strategies and plans are formulating the product, which
expected to reach USD 10 in 2013.
40W & 60W Equiv. LED Lamp Price Trend
USD
40W- Low
50
60W- Low
40
60W Equiv. LED Lamp
Price to Reach Sweet
Point in 2Q13
30
20
10
0
M-10
N-10
M-11
N-11
M-12
N-12
M-13
N-13
Conclusions
Backlight Market:
Request on high resolution panel and patent bring a higher entry barrier.
Under this circumstance, that the backlight market is saturated and supply chain is restructuring, various
kinds of strategies would be launched in 2013. LED manufacturers who own patents are more likely to
stand out and gain ability to control the market.
Lighting Market:
With improving technology, LED makers will further improve chip brightness and package materials in
order to achieve better luminous flux and cost-efficiency, giving non-Korean vendors better chance to gain
market share once again.
LED makers have adopted vertical integration business model from chip production to module. The entire
supply chain would move towards standardization and scale-up manufacturing that enables capable makers
to lead the markets. On the other hand, LED luminaries and system makers rely more on localized
production and sales channel will fulfill customized business needs for domestic development.
Industry to Stir Up A Fierce Competition in 2013
Backlight market has left with only a few makers that could survive in the intense patent and brand
competition, those who are unable to fast enough enter to the lighting sector will be eliminated by the
market.
LEDforum 2013 China

10th, June, 2013 Guanzhou
End of October, 2013 Taipei
Roger Chu,
Research Director of LEDinside,TrendForce
www.ledinside.com
RogerChu@TrendForce.com
LEDinside Market Intelligence Service

Silver
Lighting Market Report / LED Price For Lighting Application
USD2,600
Lighting + Backlight Market Report / LED Price For Lighting / Backlight

Application
USD3,300
Worldwide LED Market Forecast and Summary

Worldwide LED Demand Forecast
Worldwide LED Supply Forecast
Gold
USD 13,200
CCFL and LED Backlit TV Cost Analysis

LED Lamp Cost Analysis
LED Industry Price Trend and Forecast

Gold Member Report
Gold Plus
Worldwide Top Tier LED Markers Movement
Customized / Subject Report
USD16,000
Customized Report
By case
Subject Report- Chinese LED Lighting Market Report
USD 2,500
Subject Report- European LED Lighting Market Report
USD 2,500
EnergyTrend Market Intelligence Service
PV Silver Report
Historical Price (On Line)

Weekly PV Spot / Contract Price With Analysts
Commentaries
Monthly PV Spot / Contract Price With Analysts
Commentaries
USD 3,300
Quarterly PV Market Information Update and Analysis

PV Industry Supply Forecast
PV Gold Report
PV Industry Demand Forecast
USD 13,200
PV Industry Cost Forecast

PV Makers Financial Statement
Consumer Electronics Product:
Battery Cell Price Trend
Supply: Cell Makers Capacity
Demand: NB & Ultrabook Shipment / Battery Cell Demand
EV/Battery
xEV Market: Sales Revenue & Sales Volume

Battery Market Overview and Forecast- Market Trend /
Product Trend
- Consumer Product Application
- xEV Application Market
- ESS Application Market
USD 3,000
LEDinside Silver Member Lighting Market Report

A. Quarterly Regional LED Lighting Market
Quarterly: Macroeconomics, policy and standard, major companys movement, product technology and
trend in Japan, the US / Europe, China, and Emerging Markets
October: regional lighting market value and market outlook for the next year
- LED Lighting Market Development in Japan
- LED Lighting Market Development in the US / Europe
- LED Lighting Market Development in China
- LED Lighting Market Development in Emerging Markets
B. LED Price Trend and Analysis
LED Package Price Trend in the Lighting Application Market
- Mid Power LED Price Trend- 5630 is to be represented
- High Power LED Price Trend
100lm/W~120lm/W (350mA~1000mA)
120lm/W~140lm/W (350mA~1000mA)
Release Date: January / April / July /
120lm/W~140lm/W (350mA~1500mA)
October
Price: USD 2,600

C. LED Lamp Price Trend And Analysis
Format: PPT PDF / Excel
LED Lamp Price Tracker in the UK, Germany, the US, Japan,Language:
and Korea Traditional Chinese / English
- 40 W Equiv. LED Lamp Price
- 60 W Equiv. LED Lamp Price
LEDinside Silver Member Lighting + Backlight Market Report

A. LED Backlight Market Trend And Analysis
Quarterly: LED market value and penetration rate forecast, and technology development
in TV / smart phone / tablet PC / notebook / monitor.
October: Backlight market value and market outlook for the next year
- LED in Smart Phone Market Development And Analysis
- LED in Tablet PC Market Development And Analysis
- LED in Notebook Market Development And Analysis
- LED in Monitor Market Development And Analysis
- LED in TV Market Trend Development Analysis
B. LED Price Trend And Analysis
LED Price Trend And Analysis in TV / Smart Phone / Tablet PC / Notebook / Monitor Application Market
- LED Price In Mobile Market
- LED Price In Notebook / Tablet PC Market
- LED Price in Monitor Market
- LED Price In TV Market
LEDinside Silver Lighting + Backlight Market Report
Release Date: January / April / July / October
Price: USD 3,300
Format: PPT PDF / Excel
Language: Traditional Chinese / English
LEDinside Gold Member Service

Chapter 1: Worldwide LED Market Forecast and Summary
Market Introduction and Overview
LED Supply Chain
WW High Brightness LED Market Forecast
(Revenue / Unit / Material Type / PKG)
Chapter 2: Worldwide LED Demand Forecast (2010-2016)

(Revenue / Unit / ASP)
WW High Brightness LED for Mobile Application Forecast
WW High Brightness LED for Medium-Large Display Backlight Application
WW High Brightness LED for Lighting Application Forecast
WW High Brightness LED for Automotive Lighting Application Forecast
WW High Brightness LED for Signs and Traffic Signals Forecast
LEDinside Gold Member Report

Price: USD13,200
Format: Excel
Release Date: Quarterly
(February, May, August, November)
Language: English

Chapter 3: Worldwide LED Supply Forecast (2010-2016)
Equipment Maker-- WW MOCVD Vendor's Revenue
Equipment Maker-- WW MOCVD Vendor's Shipment
Chip Maker--LED Chip vendors' MOCVD installation volume in Gan Base

Chip Maker--LED Chip vendors' Epi Wafer volume in Gan Base (wafer size)
Chip Maker--LED Chip vendors' Epi Wafer volume in Gan Base (region)
Pkg Maker--WW LED package revenue
Pkg Maker--LED package vendors' revenue Ranking
Chapter 4: Cost Analysis Compare to Traditional Light Source
LED Lamp Cost Structure-40W Replacement

LED Tube Light Cost Structure- T8 Tube Light Replacement
Monitor BLU Cost Comparison between LED vs CCFL-20" Monitor
Mainstream TV Cost Analysis
TV BLU Cost Appendix

Chapter 5: Price Forecast in White LED / LED Light Bulb
Sapphire Substrate Price Trend-2" / 4" / 6"

PSS-2" / 4"
LED Chip Price Trend
LED Package Price Trend

40W Equiv LED Light Bulbs Price
60W Equiv LED Light Bulbs Price
European LED Light Bulb Market Strategy
US LED Light Bulb Market Strategy
Japanese LED Light Bulb Market Strategy
Korean LED Light Bulb Market Strategy
LEDinside Market Intelligence Analysis / Consulting Service
Green Energy Division / TrendFoce

http://www.ledinside.com
http:// www.energytrend.com
----------------------------------------Roger Chu
Research Director
+886-2-77026888
rogerchu@trendforce.com
Green Energy Division /

TrendForce
http://www.ledinside.com
http://www.energytrend.com
----------------------------------------Joanne Wu
Analyst
+886-2-77026888 # 972
joannewu@trendforce.com

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2013 LED Industry Outlook

LEDforum 2012 Taipei

ALL RIGHTS RESERVED. REPRODUCTION PROHIBITED WITHOUT WRITTEN PERMISSION.

8 November 2012 | Page 1