Global supply of light-emitting diodes (LEDs) is facing a shortage in 2010, according to several leading market analyst firms. As more and more companies support the solar supply chain, which has an overabundance of panel inventory currently, it is surprising that more companies have not turned their attention to overlapping synergistic products and services that support the LED supply chain. What’s more, high-brightness LEDs (HB-LEDs) feed into energy-efficient solid state lighting, which has an analogous carbon emissions reductions benefit of solar and is eligible for green energy incentive programs. In addition, companies who receive green stimulus or other government funding for SSL are able to offset their net R&D cost, which also supports consumer electronics, where there is an emerging shortage of LED backlighting devices.
Total consumption of LEDs reached 63 billion units in 2009, up from 57 billion in 2008. According to iSuppli market analysts, overall LED consumption was just above the industry’s total capacity of 75 billion units, indicating that many LED manufacturers were operating at nearly 100 percent capacity levels. The shortage predicted in 2010 applies to LEDs used for the backlighting of large-screen LCD-TVs due to their appealing thin design attributes and stellar picture quality. In comparison to notebook computers, which typically use 50 LEDs, or monitors, which require approximately 100 LEDs, LCD-TVs consume 300 to 500 LEDs per panel; thus a shortage would impact these products the most, especially in terms of cost. Furthermore, LEDs have deeply penetrated markets including: cell phones, portable navigation devices, digital photo frames, digital cameras and keypads.
On the green energy front, LED solutions are being increasingly adopted in the general illumination market but primarily for commercial and industrial lighting applications, which ultimately lower a building’s energy cost and carbon footprint. However, there are only two primary equipment-makers that support this overall supply chain, Aixtron of Germany and Veeco Instruments of the U.S., which are planning to double their production capacity by the fourth quarter of 2010 compared to the end of 2009. Interestingly enough, their tools are capable of supporting the growth of thin-films used both in the solar and LED industries allowing them to shift emphasis, depending on demand. In addition, there are significantly less HB-LED producers globally compared to solar panel manufacturers, whom have been dealing with a glut of oversupply and declining module prices. However, a domestic LED chip producer, Cree, based in
According to Navigant Consulting, 2009 started with approximately 1.6-gigawatts (GW) of solar inventory and 7.2GW of technology was shipped to the first point of sale. Approximately 6.6GW were installed globally in 2009, which leaves 2.2GW of photovoltaic cells and modules likely sitting in inventory in 2010. This inventory will likely continue to grow based on the fact there are about 400 solar panel manufacturers across the world. Even though the solar industry benefited from record low module prices in recent years, leading to increasing installation figures globally, an increasing oversupply would be alarming, especially once prices stabilize, which may lessen demand.
Photo credit: Symbolism of Solar Oversupply