Raw materials for LEDs used as backlights in large liquid
crystal displays (LCDs) are in tight supply due to strong demand, according to iSuppli Corp. Another problem is
constraints on manufacturing capacity. As a result, panel suppliers are
expected to introduce backlight designs that require fewer LEDs per panel.
Shipments of large LCD panels with LED backlights are
forecasted to reach 276.7 million units in 2010, up a 135 percent from 2009. In
2010, LED backlights will be used in 43.1 percent of all large-sized LCD
panels, which mainly are used in LCD-TVs, mobile computers and desktop
monitors.
Engineers are also including LED backlights in more
designs for electronic signage, industrial and medical applications.
LED backlighting has advantages compared to the older
Cold Cathode Fluorescent Lamp (CCFL) technology, including slimmer design,
reduced weight, lower power consumption and mercury-free attributes for a
greener, more environmentally friendly solution.
iSuppli defines large-sized LCD panels as those having a
diagonal dimension of 10 inches or more.
"There have been mounting concerns in the industry about
supply constraints for LEDs and light guide plates, two of the major components
for LED backlights," says Sweta Dash, senior director for LCD research at
iSuppli. "Changes in light guide design, constraints in raw materials and high
expansion costs are limiting capacity."
Another major constraint is the inability of Metal Oxide
Chemical Vapor Deposition (MOCVD) reactors to keep up with demand for LED chips.
As a result, tight supply of LED chips is expected until the end of the year.
"By the second half of this year, a clear distinction
will emerge between the ‘haves' and ‘have-nots', among the panel suppliers"
Dash predicts. "Those panel makers that have their own internal manufacturing
of LEDs will have sufficient supply in 2010, while those that don't will
encounter constraints."
To address supply problems, LED suppliers are shifting
production to 4-inch and 6-inch wafers and away from older 2-inch wafers.
However, LED makers will need as long as one year to adjust to the change in
production technology.
Most panel suppliers expect the number of LED chips per
television panel to decline by 30 percent or more at the end of 2010 compared
to one year earlier.
The LED manufacturing process starts with the production
of a semiconductor wafer in a high-temperature, high-pressure chamber. The raw
materials used are gallium, arsenic, and/or phosphor, which are purified and
mixed together in the chamber. Gallium is usually produced as a byproduct of
bauxite production. Its supply has been affected by short-term bursts in
demand, which last happened in 2007.
"Long term, gallium will be available with intermittent
price volatility," says Claire Mikolajczak, director, Metals and Chemicals,
Indium Corp., a producer based in Singapore.
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