LEDinside: Chip Supply Couldn’t Meet Demand till Earlier Quarter Next Year

Oct. 28, 2009－LEDinside, the LED research institution, points out that chip supply hasn’t ramped up in time, and demand has not been met, LEDinside projects that the prices in Q4 will likely remain flat amid the supply shortage. Same with prices in white LED, the situation will maintain before the 1st quarter in 2010.
 In Q3, the rapid upturn trend of LED-backlit applications in NB and TV stimulate chip shortage and stabilize its price. White LED prices also only see a slightly dip.
According to LEDinside statistics, high-power LED with efficiency upon 80 Lm/W earns better demand while the international leading suppliers mostly take its market share, and the prices are quite resilient. These high-power LEDs are priced at $1.5-$2 in Q3, falling slightly by 4%. As the high-power LEDs with luminance efficacy of 60-70Lm/W are mature products with more abundant supply, their price drops were more substantial, down 8% QoQ, to $0.6~$1.1.
LEDinside adds that the strong demand of LEDs for large-sized backlight applications and general lighting purposes has caused a strain in the LED chip supply chain, and thus also stabilized the price of white LEDs; this was particularly evident in LED backlights for TVs – not only were LED chips in short supply, white-LEDs also faced shortages. In light of the above, LED prices will likely sustain. Yet, if we look into new application segments in the future, in order to expand the application of LED backlight, such as in monitors, LED prices may need to reduce more drastically to compete with that of CCFL.
LEDinside reported that in Q3, the penetration of LED backlight in notebooks has increased dramatically, thanks to NB brand vendors’ aggressive promotion. It is forecast that the penetration rate for the whole year will reach 52%.
Japanese LED makers are still the primary supplier for LED chips used in notebooks, and Nichia currently dominates the supply. The mainstream specification of LED for notebooks is between 2000 to 2300mcd, with prices ranging from $0.07 to $0.12. Due to short supply of high-brightness (In)GaN chips, and price strategy of Japanese chip makers, price of white LED used in notebooks only fell by 5% in Q3.
As for LED backlight in Netbooks, the current mainstream specification is between 1800 to 2000mcd, priced around $0.05-$0.07, a 10% decline in 3Q09. Despite its robust demand, the significant price drop was attributed to the aggressive sales promotion in China.
The increase in smartphone shipments not only improved the brightness requirement of LEDs, but also increased the shipment of LEDs for mobile applications. Moreover, LED chip shortage affected the supply chain, thus eased LED packager’s pressure to cut prices of white LEDs. In Q3, the price was between $0.03~0.07 with a 5% slide.
Despite the rapid improvements in its efficiency, prices of high power LEDs still saw a moderate drop. As upstream chip makers shifted their capacity to produce more mid-power LEDs because of the rising demand in TV backlight, supply of high-power LEDs was affected as a result; therefore, prices of high-power LEDs maintained in Q3.