© 2009 by Strategic Business Insights. All rights reserved.© 2009 by Strategic Business Insights. All rights reserved.

LEDs: Opportunities and Uncertainties

An Update

18 November 2009

Benjamin Gross, Ph.D.Consultant

SBI Explorer

www.strategicbusinessinsights.com

2

LED Attributes

LEDs can improve most lighting solutionsKey Attributes:

Image Sources: Actuate Corp., architonic.com, Zumtobel, Bracknell Forest Borough Council, MB Tronics

Eficiency Design Longevity Color

3

Lighting Applications

LEDs can improve most lighting solutionsApplications include:

Image Sources: LED Colour Solutions, Motion Trend, OrangeTeK, Crutchfield New Media, LLC

Home Automotive Outdoors Display

4

LED Development

First half of the 20th century: light from p-n junction.

• 1960s and 1970s: commercial IR, red, and yellow light emitting diodes (LEDs) (RCA, GE, TI)

• Color: semiconductor bandgap• AlGaAs: red and IR; AlGaP: green; AlGaInP: yellow, orange

p-type n-type

i

+ -+ -+ -

hv

+ -

5

LED Development

• 1990s: First commercial high-brightness blue LEDs (Nichia - Shuji Nakamura).

• White lights quickly followed.• Yellow phosphor combines for white light:

— Ce:YAG, ZnSe (substrate and phosphor), quantum dots.

Image Sources: University of Wisconsin, Rensselaer Polytechnic Institute, Treehugger.com, lightemittingdiodes.org

6

Efficiency

< 20 lm/W 45–60 lm/W (CFL)

<100 lm/W (Tube)

< 90 lm/W (available)

>150 lm/W (experimental)

Image Sources: Reed Business Information Ltd; Madison Clean Energy; Boca Flasher

In SI measurements, luminous efficacy at 555 nm has a theoretical maximum of 683 lm/W.

Drive for efficiency is pushing LED interest

Fluorescent LEDIncandescent

7

Design

Small packages and color options allow for novel design opportunities.

Image Sources: Solas, Koninklijke Philips Electronics, UMNITZ, architonic.com, Zumtobel

8

Longevity

For embedded applications:

Longevity reduces waste.

Image Sources: Motion0 Trend; OrangeTeK; Declan McCullagh; Forth Corporation; Bracknell Forest Borough Council

9

Color Reproduction

Quantum-dot lighting may provide even richer, more natural light with broader color gamut.

Image Sources: Apple; treehugger.com

• Blue lights with yellow phosphors provide “warmer” white lighting than fluorescent.

• White LEDs yield improved color depth.

• RGB modules provide adjustable coloring.

10

High-Brightness LED Market

$4.6B$5.1B

$4.9B

$14.9B (est.)Estimated 24% CAGR between 2008 and 2013.

Data Sources: Strategies Unlimited, Global Industry Analysts

Overall lighting market approximately $100B in 2010.

11

High-Brightness LED Market

• Market led by Japan: Nichia, Toshiba, Showa Denko KK, Sharp, CITIZEN and Toyoda Gosei.

• Followed by Taiwan: Chi Mei (now owned by Hon Hai), TSMC

• European Union: Philips, OSRAM Sylvania

• United States: Cree

• Korea: Samsung LED, LG Innotek, Seoul Semiconductor

• China: Manufacturing dispersed, many downstream manufacturers

Data Sources: Strategies Unlimited, Global Industry Analysts

12

General Illumination

Image Sources: Reed Business Information Ltd; Madison Clean Energy; Boca FlasherData Source: Strategies Unlimited

• U.S., Japan, Canada, Australia (and others) banning sale of most incandescent bulbs by 2012.

• Europe banning the sale of 100-W incandescent bulb, Sept. 2009, all incandescent bulbs 2016.

• LED has no mercury, so offers RoHS advantages.

• General illumination market $5B by 2012

• LED benefits over CFL (CCT, lifetime, dimmability, low-temperature, no mercury).

• Cost of LEDs remains too high for consumers .

Correlated Color Temperature (CCT) is an approximation of emitted spectrum from a black-body radiator at temperature in kelvin.

13

Commercial/Municipal

Image Sources: LEDs MagazineData Sources: U.S. DOE, Beringea LLC

• Always on: longevity and efficiency important

— Labor-intensive maintenance

— Understood cost/benefit

• Better outdoor/cold-temperature performance

• New buildings, new light fixtures

• U.S. has ~130M streetlamps, $65B replacement market over next 10 years.

14

Image Sources: Gizmodo.com; UMNITZA; FlatbattData Source: Beringea LLC

Automotive

• Space and power efficiency is important.

• Efficiency is a value in hybrid/EV.

• LEDs last the life of the car.

• LED-based brake lights represented 53% of worldwide market in 2007, expected to be 85% of market by 2011.

15Image Sources: Edmunds; Wheeltalk

Automotive

• New opportunities in design: distinctive image branding

White LED headlights limited to luxury market.

16Image Sources: BMW World; LEDs Magazine

Automotive

• Smarter design offers adaptive front lighting.• Design adjusts to speed and in turns.• Future systems adjust cutoff line, brightness, conditions.

17Image Sources: HardWare.fr; Samsung; acWorld; TechfreshData Source: DisplaySearch, iSuppli

Displays

• LED backlighting units for LCDs:— Full NTSC color gamut— Improved contrast with local

dimming— Better efficiency (Energy

Star in United States)— No mercury (RoHS)

• LED TVs from Sony, Sharp, Samsung, LG, Vizio, and more.

18Image Sources: HardWare.fr; Samsung; acWorld; TechfreshData Source: DisplaySearch, iSuppli

Displays

• LCDs represent 88% of display market.• 104.5M LED BLU units in 2009 (est.),

53% of mid- to high-end notebooks.• LED BLUs in 3% of LCD TVs in 2009,

reaching 39% of LCD TVs in 2013 (~90% CAGR).

19Image Sources: Mitsubishi; Declan McCullagh

Displays

• Large LED Displays:— Are visible in direct sunlight— Can be very large— Need infrequent component

replacement

20Image Sources: Twibright Labs, VLCC

Freespace Communications

• Outdoor— Reasonable Optical

Near Joint Access (RONJA, Czech Rep.)

— 10 Mbps, >1.4 km— Weather problems

• Indoor

— White LED lighting

— Unlicensed spectrum

• Traffic Signal

21

Image Sources: treehugger.com

Commercialization Parameters

• Technological Hurdles• New materials for LEDs

— Phosphors— Quantum dots— Casing materials

• Efficiency— Luminaire efficacy— High-power HB-LEDs (to

outperform CFL)• Luminous flux

22

Image Sources: treehugger.com

Commercialization Parameters

• Cost Hurdles• Economies of Scale

— Like computer chips— Demand across all

applications• Incumbency

— Ubiquitous AC power and light fixtures

— Creative destruction

23Image Sources: treehugger.com

Commercialization Parameters

Social Drivers• Policy drivers• Need for standardization• Public movement

— “Ban the Bulb”— Energy-efficiency push

24Image Sources: Sustainable Design Update

Conclusions for now

• Lighting, automotive, and displays are the fastest-growing areas and where new opportunities will be.

• LED supportive national policies are being implemented, and will continue to emerge.

• LEDs are a part of the “cleantech” movement.

• Efficacy and cost issues can be met within a reasonable time frame.

• Standards are necessary for buy in.

25

Outlook

• LEDs achieving 85% of brake light market in 2011.• Laptop display market trending toward 100% adoption of LEDs.• LED BLU for LCDs will be largest contributor toward market

growth, largest market segment through 2013.• LED general illumination market to see 15% growth in 2009, 40%-

50% growth in years following economic recovery. Second largest application of HB-LED in 2013.

• Detroit based Ilumisys (subsidiary of Altair Engineering) plans to grow out of economic downturn, claims it will be “highest volume maker of solid state lighting products,” by end of 2010.

26

Task: Consider Areas to Monitor

EconomyAutomobile

Market

EconomyAutomobile

Market

Cost of LEDCost of LED

LuxuryAutomobile

Market

LuxuryAutomobile

Market

Global Standardized Light Fixture

Global Standardized Light Fixture

LED ProjectorsLED Projectors

AdaptiveFront-Lighting

(HB/LB)

AdaptiveFront-Lighting

(HB/LB)

R&DAdvances

R&DAdvancesIssues and Uncertainties

EfficacyImprovement

EfficacyImprovement

LED-BLU Dominates LCD HDTV

LED-BLU Dominates LCD HDTV

EfficiencyRegulationsEfficiency

Regulations

OLED Competitive

With LED

OLED Competitive

With LED

LED Replaces IncandescentLED Replaces Incandescent

Q-Dot Mass ProductionQ-Dot Mass Production

Consumer Acceptance of LED (Upfront Cost and

Appearance)

Consumer Acceptance of LED (Upfront Cost and

Appearance)

In-home DC PowerIn-home

DC PowerStreetlight/Signal

ReplacementStreetlight/Signal

ReplacementAvailability of

Enabling ComponentsAvailability of

Enabling ComponentsCost of EnergyCost of Energy