MOCVD and LED supply/demand outlook

In 2009, the MOCVD market was under 200 tools while in 2010 we expect 760 units to ship. Surprising to many, we show the MOCVD market continuing to rise not just in 2011 but in 2012 as well.

07/19/2010


IMS research: excellence in market intelligneceOn July 13th, I presented IMS Research’s LED and MOCVD supply and demand outlook at the SEMI Theater during Semicon West. You can find most of the talk at:

http://www.slideshare.net/ehallSEMI/mocvd-led-market-outlook

What was most interesting to many observers was whether or not the MOCVD market would continue to rise after this year. In 2009, the MOCVD market was under 200 tools while in 2010 we expect 760 units to ship. Surprising to many, we show the MOCVD market continuing to rise not just in 2011 but in 2012 as well. In addition to strong demand growth in backlighting and lighting, significant incentives by provincial governments in China which have plans to build a robust LED supply base are contributing to continued growth in MOCVD equipment. The provincial governments are subsidizing 50% of the MOCVD cost as well as providing tax breaks, free land and low cost loans. As a result, China will account for a significant share of the MOCVD market over the next couple of years until these subsidies expire.

Fortunately for the MOCVD suppliers, new tools going into China are not expected to contribute much to the supply/demand calculation from 2010 to 2012 either as Chinese manufacturers must first master the yield challenges associated with MOCVD. In addition, utilization is likely to be low until they can prove they can regularly achieve desired yields and output. As a result, new tools will continue to flow into Taiwan and Korea. In addition, in 2011, market leader Nichia is expected to significantly expand its capacity in Japan. As a result, 2011 should be another excellent year for the MOCVD market with over 800 tool shipments projected with 450 of those shipping to China.

In 2012, continued growth in lighting and backlighting along with more volumes into China should result in over 900 tools with at least 200 going into China. The tools in China should still only have a minor contribution to total industry supply in 2012. However, as they improve their yields and utilization, they will certainly have a significant impact on LED supply/demand and lead to increased competition for LED manufacturers.

The MOCVD tools are also becoming more productive and expensive as they transition to full-fledged production tools from modified R&D tools. For example, Aixtron’s newest system, the G5, offers a 105% increase in throughput by expanding the process chamber by 33%, increase the deposition rate by 17% and eliminating a time consuming bake step to clean the process chamber.  Increasing the wafer size can also significantly boost throughput by ~30% and we are seeing many manufacturers converting to larger wafer sizes. Improvements in MOCVD productivity and yields should also lead to new tool orders as LED manufacturers look to take advantage of the latest tool enhancements and larger wafer sizes.

On the demand side, I indicated that LEDs for backlights are expected to grow at a 30% CAGR to 100 billion die in 2015 with LCD TVs the largest application from 2011. From 2009 to 2010, LCD TVs are expected to rise from 3% to 22% penetration, notebooks are expected to rise from 46% to 89% and LCD monitors from 2% to 12%. 2013 is expected to be the last year of impressive unit growth in backlighting unless 3D requires significantly more LEDs and direct LED B/Ls make rapid share gains.

In the case of lighting, we expect 5X growth in 2010, over 80% growth in 2011 and a 102% CAGR from 2009 to 2015 on gains in all segments on falling costs and power and lifetime advantages as well as various subsidy programs at the national, state and city level.

For more information on MOCVD and LED supply and demand, please see our Quarterly GaN LED Supply Report



Top Plant
The Top Plant program honors outstanding manufacturing facilities in North America.
Product of the Year
The Product of the Year program recognizes products newly released in the manufacturing industries.
System Integrator of the Year
Each year, a panel of Control Engineering and Plant Engineering editors and industry expert judges select the System Integrator of the Year Award winners in three categories.
June 2018
2018 Lubrication Guide, Motor and maintenance management, Control system migration
May 2018
Electrical standards, robots and Lean manufacturing, and how an aluminum packaging plant is helping community growth.
April 2018
2017 Product of the Year winners, retrofitting a press, IMTS and Hannover Messe preview, natural refrigerants, testing steam traps
June 2018
Machine learning, produced water benefits, programming cavity pumps
April 2018
ROVs, rigs, and the real time; wellsite valve manifolds; AI on a chip; analytics use for pipelines
February 2018
Focus on power systems, process safety, electrical and power systems, edge computing in the oil & gas industry
Spring 2018
Burners for heat-treating furnaces, CHP, dryers, gas humidification, and more
April 2018
Implementing a DCS, stepper motors, intelligent motion control, remote monitoring of irrigation systems
February 2018
Setting internal automation standards

Annual Salary Survey

After two years of economic concerns, manufacturing leaders once again have homed in on the single biggest issue facing their operations:

It's the workers—or more specifically, the lack of workers.

The 2017 Plant Engineering Salary Survey looks at not just what plant managers make, but what they think. As they look across their plants today, plant managers say they don’t have the operational depth to take on the new technologies and new challenges of global manufacturing.

Read more: 2017 Salary Survey

The Maintenance and Reliability Coach's blog
Maintenance and reliability tips and best practices from the maintenance and reliability coaches at Allied Reliability Group.
One Voice for Manufacturing
The One Voice for Manufacturing blog reports on federal public policy issues impacting the manufacturing sector. One Voice is a joint effort by the National Tooling and Machining...
The Maintenance and Reliability Professionals Blog
The Society for Maintenance and Reliability Professionals an organization devoted...
Machine Safety
Join this ongoing discussion of machine guarding topics, including solutions assessments, regulatory compliance, gap analysis...
Research Analyst Blog
IMS Research, recently acquired by IHS Inc., is a leading independent supplier of market research and consultancy to the global electronics industry.
Marshall on Maintenance
Maintenance is not optional in manufacturing. It’s a profit center, driving productivity and uptime while reducing overall repair costs.
Lachance on CMMS
The Lachance on CMMS blog is about current maintenance topics. Blogger Paul Lachance is president and chief technology officer for Smartware Group.
Electrical Safety Update
This digital report explains how plant engineers need to take greater care when it comes to electrical safety incidents on the plant floor.
Maintenance & Safety
The maintenance journey has been a long, slow trek for most manufacturers and has gone from preventive maintenance to predictive maintenance.
IIoT: Machines, Equipment, & Asset Management
Articles in this digital report highlight technologies that enable Industrial Internet of Things, IIoT-related products and strategies.
Randy Steele
Maintenance Manager; California Oils Corp.
Matthew J. Woo, PE, RCDD, LEED AP BD+C
Associate, Electrical Engineering; Wood Harbinger
Randy Oliver
Control Systems Engineer; Robert Bosch Corp.
Data Centers: Impacts of Climate and Cooling Technology
This course focuses on climate analysis, appropriateness of cooling system selection, and combining cooling systems.
Safety First: Arc Flash 101
This course will help identify and reveal electrical hazards and identify the solutions to implementing and maintaining a safe work environment.
Critical Power: Hospital Electrical Systems
This course explains how maintaining power and communication systems through emergency power-generation systems is critical.
click me