LED lighting breakthrough not before 2012, says Aixtron manager

Tag : lamps
MUNICH, Germany — The energy saving trend has led Aixtron'ssales to record heights in Q4/2007. Now the manufacturer of LEDproduction equipment sees a "digestion phase" during which thesemiconductor market will absorb the production capacity built upover the past quarters. The breakthrough of LED in general lightingapplications will not come before the years 2012/2013, predictsAixtron investor relations manager Guido Pickert.
Currently, the market is driven by advancements in LED backlightingapplications, Pickert explained. LEDs currently are replacing ColdCathode Fluorescent Lamps (CCFL ) as the light source in laptopcomputers, desktop monitors and TV sets. Manufacturers such AppleComputer, Sony and Philips recently have introduced products withLED backlights. While in laptop computers LED shine with their lowenergy consumption, in TV sets they favorably compete withconventional backlight solutions through a much higher contrastratio of up to 2 million to one.
Pickert called the switch to LED backlighting a "no-brainer", inparticular for laptop computer applications, However, "the questionis how fast the market penetration will rise," he said. In Taiwan,where most of Aixtron's customers are located, "the expectationscertainly were very high. But this has to be seen a little bit morerealistic."
While LED backlighting is a short-term market trend, the market forLED general lighting applications will take off only in themid-term. Before this application will achieve a majorbreakthrough, the LED technology has to overcome certaintechnological hurdles, especially with respect to their efficiency."The LED is not yet fully competitive against sodium dischargelamps and fluorescent lamps in widespread use for street lighting,"Pickert noted. "In ten years it certainly will be the dominantlighting source but we do not expect a strong market demand before2012/2013."
What Pickert did not say is that manufacturers of lighting devicessuch as Germany's Osram or Dutch Lumiled probably intend to exploit the market potential for today's energy saving lamps before they switch to LEDs acrossthe board.
Against the background of the current semiconductor industrydownturn, Pickert's expectations for rapid growth are onlymoderate. "When in Q4/2007 we announced record sales, we alreadypointed out that the market will need a 'digestion phase'. This iswhere we are now. The visibility is poor, for our customers evenworse than for us," he said. "Nobody knows how deep the downturnwill be and how long it will last."
Nevertheless, Pickert does not see LED production overcapacitiescomparable to the DRAM market since the short- and mid-term growthfactors are tangible. "Energy saving (which in this context issynonymous to LEDs replacing conventional light sources) is notonly popular in Europe. If you take a look to California, you willsee great advances towards this direction. For instance, alltraffic lights are equipped with LEDs." Also in China, the demandfor energy-saving lighting solutions is rising; the Chinesegovernment recently has launched a Solid State Lighting initiativethat aims at replacing light bulbs and similar energy hogs by LEDs.All these factors however will create demand only in about three tofive years.
Aixtron claims to control about 70 percent of the global market forMOCVD (Metal Oxide Chemical Vapor Deposition) equipment used toproduce III/V semiconductors and thus LEDs. The market volume forthis type of equipment currently is estimated to about $300 millionper year. Aixtron regards US-based Veeco Instruments as its onlycompetitor in international markets; besides Veeco, there areseveral smaller MOCVD vendors in Japan which however are servingonly local markets.
Over the past years, there have been frequent rumors that AppliedMaterials has plans to take over the Aachen, Germany, basedsemiconductor equipment vendor. Pickert denied to comment on theserumors.