Global demand for precursors, a material used in the manufacturing of LEDs, is set to more than double from 2012 to 2016, according to a research firm.
Precursors are used in the metal-organic chemical vapor deposition (MOCVD) manufacturing process for making LEDs. The market for precursors will rise to 69 tons in 2016, up 114% from 32 tons in 2012, said Displaybank, which is now part of IHS.
"The boom in the precursor market reflects the rising operating rate of MOCVD as the LED lighting market grows," noted Richard Son, senior LED analyst at IHS.
Precursor is a core material that ensures the optimal light efficiency for each LED epi layer. Major precursors include trimethylgallium (TMGa), trimethylindium (TMIn), trimethyl aluminum (TMA), triethylgallium (TEGa) and C2Mg2. Among these, TMGa is the most widely used and commands about 94% of total demand.
IHS also forecast that global shipments of MOCVD equipment will climb by 17% in 2013.
South Korea-, Taiwan- and China-based companies are the largest buyers of MOCVD equipment, collectively accounting for about 80% of the global demand of precursors, IHS indicated. China, which is generating the highest growth in installation of MOCVD equipment among the three countries, is expected to make up 45% of the global demand for precursors in 2016, IHS said.
Dow Chemical used to be the unrivaled leader in the precursor market. However, with the recent growth in precursor demand, new players have been investing in R&D and manufacturing facilities while aggressively breaking into the market with low prices for similar-quality product. Such developments will intensify competition further among precursor makers, IHS believes.
