TrendForce：Six Major LED Development Trends in 2014

In 2013, the LED package market value was US$ 12.5 billion and is expected to reach US$ 13.39 billion (Year-on-Year +7%) in 2014, according to a LEDinside gold report. Tablets and smartphones are still highlights of the LED market in 2014. The two applications have shown stable growth as it benefited from increased resolution and market demands. As for lighting applications, LED package value and lighting applications greatly increased in 2014, with most evident growth in engineering, commercial and outdoor lighting markets. LEDinside observed several changes in the LED application market in 2014.

1. LED-backlit TV market penetration rate saturated, limited growth in the future
LED-backlit TV penetration rate will reach 95% by the end of 2013, according to statistics compiled by LEDinside. Affected by the saturated market penetration rate and slow down of TV sales, LED-backlit TV market value will slump for the first time in 2014.

2. LED tablet applications still the main growth drive in future backlight markets
Affected by traditional off peak season and high inventory levels, tablet shipments were lower than estimations in 3Q13. Annual tablet shipment projections were lowered to 196 million, and annual shipment growth rates were down from earlier estimations this year of 33.6% to 31.1%. This shows that tablet shipments have eased, and although future tablet growths is waning, it still has considerable room for growth compared to other IT products. LEDinside estimates tablet LED backlight applications CAGR will reach 8% from 2013 to 2017.

3. iPhone5S dual-FLASH LED design adds to the imagination
Since Flash LED prices fell quickly in 2013, total production value increased at a mediocre rate of 3%. To add value to their smartphones, Apple has introduced “true tone flash” technology onto its iPhone 5S. The technology employs dual-flash LED for light compensation, and adds onto the original white flash LED structure another warm color LED to compensate for the color temperature difference. Dual-flash LED designs are expected to further raise flash LED demands, by increasing the LED pcs used in 2013 by 27.3% to 1.44 billion pcs, and reach 1.7 billion pcs by 2014. LEDinside is observing whether other smartphone manufacturers will be following suit, and there is still a lot of room for imagination in the flash LED market.

4. Small pitch LED display technology matures
Besides using LED displays for signaling and advertisement, LED manufacturers are also promoting small pitch LED display. The shortest distance between LED display and pixels is 1.2-1.6 mm in current small pitch LED displays, and its advantages include good color saturation and high resolution. Costs are far lower than same sized LCD monitors, especially in the 110-inch monitor market. From a long term perspective, LED displays can replace a part of LED-backlit TV applications, and enter commercial and mass consumer markets.

5. Rising demands in commercial, engineering and outdoor lighting market
Observations of the LED lighting market show significant market value growths for LED package applications in 2014. Out of these, growth in engineering, commercial and outdoor markets will be most evident. In addition, rising LED bulb, tubes and commercial lighting markets has led to huge demands for mid power LED, especially as 5630 and 3030 packages (PKG) become the market mainstream. LEDinside projects mid power LED market value to surpass high power LED market in 2013 and 2014.

6. Emerging LED specification for backlight and general lighting
Due to raging price wars in the lighting market, the entry of 5630 PKG, which specifications has higher price/performance (P/P) ratio than traditional high power LED has become widely popular among luminaire manufacturers. LED manufacturers have been trying to develop products with higher P/P ratio than 5630 PKG. Since the launch of Japan package manufacturer Nichia Corp. 757 series 3030 PKG received a warm market welcome, many manufacturers have also released products with the same specifications in 2Q13.High current 2835 PKG is also gradually spreading among Chinese package manufacturers. Not only can it be used in backlight applications, it can also be used in the lighting market, and is also popular among clients. LEDinside research showed, comparisons between 3030 PKG (0.5-0.9 W), 2835 PKG, and 1-3W LED showed 3030 PKG had the best p/p ratio, and was the most price competitive. Prices for 3030 PKG reached US$ 0.12-0.16 in 3Q13. LEDinside projected 3030 PKG and 2835 PKG will replace 5630 PKG as the market mainstream in the future.