South Korea-based TV makers hope to further reduce the cost of direct-lit LED TVs by using fewer LED chips in backlight modules, hence the firms hope LED packaging houses can increase the wattage of the packaging to 1.2W per chip. This means the number of LED chips used in a 32-inch TV model can be reduced from 24 to 15. The high wattage requested by customers increases the entry barrier for LED packaging houses.
Currently, only a few packaging houses in Taiwan that have been maintaining 90% capacity utilization rates, and the higher technological challenge is expected to stimulate a market shuffle.
The lens that direct-lit LED TVs adopt accounts for a relatively large percentage of costs, hence firms intend to lower product costs by having fewer LED chips. Once the firms adopt LED components with high wattage, packaging houses need to adopt the new technology of epoxy molding compounds (EMC) and this will force some packaging houses to exit the supply chain for tier-one TV brands.
LED firms stated that in 2012, the yields for EMC type LED products was only around 60%, and some firms have been able to increase the yields to 90% in 2013. Recently, South Korea-based brands have been conducting verification on new LED packaging products and many firms with lower yields have not obtained verification.
LED firms believe other TV brands will follow suit in adopting higher wattage LED packages. In addition, China-based LED firms have also been aggressive in developing high wattage LED components. Competition is expected to rise, said LED firms.
