Taiwan is the world's leader in LED manufacturing with 41 LED fabs representing over 21 percent of the world's capacity — more than any other region (according to SEMI Opto/LED Fab Forecast report). After the challenging year of 2011, the LED industry finally sees growth opportunities again as the penetration rates of LED TV backlight and general lighting increase. The long-term prospects of the LED market are still promising; it is expected that the five-year CAGR of the European LED market will be 38 percent, and China's 12th Five Year Plan will drive 70 billion RMB of LED production value. However, Taiwan's LED industry still needs to find ways to strengthen its LED supply chain and production competencies to counter the challenges from both international and Chinese companies. At the May 31st "2012 LED Strategy Planning and New Opportunity" SEMI seminar in Hsinchu, experts from TSMC Solid State Lighting, Edison Opto, and ITRI shared their insights on the challenges and new opportunities in Taiwan's LED industry.
"The production value of Taiwan's LED industry was NTD 134.6 billion (US$ 4.5 billion) in 2011, and that is expected to reach NTD 200 billion this year (US$ 6.7 billion) — about a 50 percent increase)," says Terry Tsao, president of Taiwan and Southeast Asia, SEMI Taiwan. "Driven by the requirements from China's 12th Five Year Plan, general lighting and TV backlighting, Taiwan's LED industry which has a comprehensive supply chain with more than 200 companies, should be well prepared to grasp new opportunities for the next stage."
Mu-Tao Chu, director of W Division Opto-Electronics Device and System Applications Division, ITRI, indicates that as LED efficiency exceeds 100 lm/W, the LED lighting market will increase rapidly in the near future. It is estimated that LED lighting is likely to account for 30 percent of the worldwide lighting market by 2015, and LED light sources and fixture costs are the key.
Although Taiwan has a complete LED manufacturing chain, Chu states that Taiwan has not done enough in the development of LED lighting products and the deployment of export outlets. However, Taiwan still has advantages, "Though our product efficiency is not top of the world, Taiwan makers can provide products with the best price/performance ratio and leading DOE specifications by 2~3 years."
At present, the efficiency of LED products in mass production is already over130 lm/W, and that will be improved to 200 lm/W by 2015. According to Chu, the key development trends will mainly focus on finding solutions of the lowest cost and usable quality ($/lm). Therefore, it will involve high efficiency (lm/W) technology, new substrate, production, and inspection structures.
For the future of Taiwan's LED industry, Chu suggests that, in addition to focusing on developing high-efficiency, low-cost LED component and module technologies for LED lighting market, companies should also invest in high-value applications, such as high-quality intelligent lighting, interactive control technologies to further expand the scope.
Chu introduced several developing innovative technologies, including 200mm GaN-on-Si, μ-LED array, thin-film LED package, UV-LED, intelligent lighting, and agriculture and aquarium LED lighting, saying that Taiwan companies will be able to create higher value from these high-end LED applications and technologies.
Chih-Lin Wang, deputy director of the Emitter Technology Integration program at TSMC Solid State Lighting, discussed the LED requirements for lighting applications based on different specifications such as lm/W, lm/$, and lm/package.
Wang indicated that, as efficacy has improved significantly in recent years, it will not be an issue in the future. According to the targets defined by DOE, efficacy of LED warm white and cool white will reach 253 and 258 lm/W respectively by 2020. Therefore, the more crucial issue is is how to reduce cost further.
"Additionally, requirement of LED quality will keep increasing, such as color rendering, saturation, consistency, and life. These will be the key differentiating advantages for LED market," said Wang.
Jian-Ming Chen, special assistant of Edison Opto, stated "Driven by China government's policy supports and subsidies, the local LED industry has grown rapidly in recent years. Companies like Kingsun, Yankon, and NVC-Lighting are therefore emerging quickly due to government's aggressive promotion of street lights and commercial lighting applications."
According to Chen, it's not easy for Taiwan makers to win bids of the 12th Five Year Plan government LED projects. Moreover, some bids are conducted on a so-called energy contract management base. It requests bidding winners to sign a three- to five-year long-term contract, and the payment is based on the reduction of electricity bill after LED lamps are installed (to guarantee the quality of the construction). Without strong financial support, many companies may not be able to take work on these government projects.
Edison Opto now mainly focuses on customization services, aiming to provide lighting design manufacturing services (LDMS) covering thermal, electrical, mechanical, and optical solutions. "We need to compete in the battlefield that we are good at. That's service!" Chen stressed. "Taiwan makers should figure out their own strategies and directions by developing innovative applications and technologies to survive the fierce competition."