The GaN LED market grows by only 1%. Most companies mostly have low profits.

The GaN LED market grew by only 1% in 2011, and most companies have a low profit margin.

IMS Research Expects LED Packaging Market to Increase by 1% in 2011 and Lighting Revenue Increase by 29%

After a rapid growth of 60% in 2010, IMS Research believes that the GaN LED market in 2011 will tend to be flat, increasing by only 1% to US$8.7 billion. As shown in the figure below (data from IMS Research's latest quarterly GaN LED supply and demand report). The main reasons are:

· The backlight market, which accounts for 60% of GaN LED revenues, grew more slowly than expected. IMS Research expects that the backlight market in 2011 will fall by 3% to US$5.4 billion; in 2010, the backlight market will grow by 80%, although the 36% growth is due to the price drop.

• As existing producers and newcomers continue to increase capacity in years when demand is not good, price pressures have increased and the supply side has grown more than twice as fast as the demand side. Converted into 2 "silicon wafers, without considering the yield rate, capacity is expected to increase by 67% in 2011, while LED demand will only increase by 29% (75 billion chips). Therefore, the excess capacity in the second half of 2010 will continue to 2011.

· Oversupply resulted in a decrease in the average sales price of each product segment in 2011 by 44%, and the average unit price fell to 21%. Due to lower than expected capacity utilization and slow cost reduction, the profitability of most LED companies is not optimistic.

Ross Young, senior vice president of IMS Research, pointed out: In addition to TV applications expected to grow by 13%, other LED backlight applications revenue is expected to decline in 2011. However, the growth of TV applications is not enough to make up for the decline in other fields, especially the growth of LED TVs in economically developed countries is slower than expected, and the price is too high for developing countries. Therefore, we have reduced the LED's penetration rate of TV backlighting from 45% to 43% in 2011, with a penetration rate of 23% in 2010 and a 68% increase from 73% in 2012.

The lighting market is the fastest growing LED packaging market in 2011, rising from 16% in 2010 to 24%, reaching US$1.7 billion, accounting for 20% of the market share. Despite this, LED's share in the lighting market is still low. It is estimated that shipments will only account for 1% in 2011 and revenue will account for 14%. However, there is still room for potential growth in the future.

Young mentioned: “We expect that the overall LED packaging market will experience rapid growth by 2015. The backlight and lighting markets will grow from 2012 to 2013; the LED used in the main backlight market will reach saturation in 2014. Therefore, the lighting market will exceed the backlight market from 2014 to 2015. However, by 2016, lighting growth will slow down and will not make up for the weakening of the backlight market because organic motor light-emitting display technologies (AMOLEDs) will also deprive part of the backlight application share. ”

Other highlights in the report still include:

· Therefore, the overall market forecast is for 2016, while the forecast for the lighting market will be provided by 2020.

With the fall in LED prices and the global ban on incandescent lamps, LED lamps and lighting revenues are expected to reach US$74 billion by 2020, accounting for 42% of total lighting market shipments and 73% of revenues. Then, due to the increase in the penetration rate and the life characteristics of the LED, it is expected that the LED growth rate will decrease after 2018, limiting the window for companies to use LED lighting.

• Shipment volume of LED TV panels increased by 22% month-on-month and 82% year-over-year, but it was 10% lower than the supplier's expectations. The LeGold display ranks first in the market share of TV panels and LED TV panels; Samsung leads the LED consumption of TVs by approximately 1.2 billion (calculated in 20x40 mil specifications). The average number of particles per LED TV panel (20x40 mil) was 165 per piece, and the quarterly growth rate decreased by 6%.

The LED display panel has a quarterly growth rate of 5%, an annual growth rate of 15%, accounting for 43% of the market. Due to the low display market, Q2 shipments were 13% lower than expected. Lucky Gold ranks first in display panel, LED panel and LED consumption.

• The notebook shows that the penetration rate in Q2 reached 100% for the first time. Due to the rise of tablet computers, under 10 inches will exceed 14. X inch becomes Q2 second mainstream size. In terms of market share, Lucky Gold is the first and Samsung is the second.

· IMS Research has conducted more in-depth analysis of the automotive market. In this report, we will predict different sizes of chips in each automotive application area and estimate the number of LEDs used per vehicle.