TrendForce：LED package production value only to post 9.6%YoY growth in 2013; tablet PC and smartphone to be the key demand drivers

LED has been penetrated into a wide range of applications such as lighting and TV, thanks to the rapid price fall and aggressive push among vendors. Despite the LED market is still growing steadily in terms of demand, corresponding market growth slows down amid excess capacity build. LEDinside expects the LED package industry to grow only 9.6% YoY at US$11.27 billion in 2013.

In spotlight: iPad Mini, Android & Windows tablet PC

The LED market value for backlight application is expected to be flat YoY at US$2.69 billion in 2013 with tablet PC continues being the spotlight LED backlight market application among all, according to LEDinside, the LED research division of TrendForce. The market is expected to stay static amid a saturating demand for LED-backlit monitor and TV, which in turns discourages demand, thus lesser LED are required.

LEDinside anticipates more consolidation to take place in the LED backlight market in 2013 as room for LED outsourcing shrinks. Given that most TV vendors and panel makers have already secured their LED demand for 2013 via advance capacity plan and partnership with OEMs, they will have ~60-70% of the required LEDs to be produced in house, implying that less than 15% of the demand will be left for LED makers. It is expected that those LED makers with an enriched IP library will continue growing their dominancy. LEDinside estimates that the LED backlit LCD TV penetration rate to hit 90% in 2013, up further from the expected 75% in 2012.

Among all applications, tablet PC is expected to serve as the most powerful demand driver. Shipments of tablet PC are expected to hit 130 million in 2013up from 56 million in 2011. The growth is expected to conjunct with a LED backlit tablet PC production value growth of 20% YoY. This market segment requires considerable LED because: 1, Vendors adopt LED as the backlit source from the very beginning, implying that there is no replacement issue as the CCFL does in the notebook segment; 2, Tablet PC has drawn high popularity and grabbed some market share from the netbook market; and; 3, iPad from Apple, which accounts for over 60% of the total market share, requires more than double of the LED amount than other similar devices due to its high panel resolution requirement.

LED demand to surface from handset flashlight

Flashlight in handset is expected to be a demand driver to compensate the slowing demand upon smartphone penetration. LEDinside expects demand of LED from flashlight-handset to hit 1.2 billion units in 2012, up from a billion units in 2011. Corresponding production value is expected to top US$680 million in 2012. LEDinside estimates that over 80% handsets are equipped with camera modules, yet not every one goes with a LED supplement lamp. As the average resolution for handset camera advances from 0.3- to 5-megapixel and now having 8-megapixel as the mainstream, the consistent advancement promises good margins from LED supplement lamp as compare to traditional LED backlit applications. For handset itself, it is expected to be the segment among all to post saturated LED demand as vendors have long been introduced LED as the backlit source amid dimension and power-saving concerns. However, as smartphone continues to penetrate, rising adoption of touch panel thus discourages LED demand for use in keypad. Such demand loss is expected to be compensated by rising demand from supplement lamp and flashlight though.