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Market report: Blue diodes infiltrate the domestic market

17 Jun 2002

The future is bright for the latest light-emitting diodes on the market. Blue and white versions have come a long way in the last two years. Roy Szweda looks at the latest developments taking place in Europe and around the world.

From Opto & Laser Europe March 2001

Interest in visible light-emitting diodes has never been stronger. Much of this interest is for the blue/green and white devices, which are being produced by more and more companies around the world.

So far blue/green light-emitting diodes (LEDs) have been restricted to multicolour displays. However, a notable event with potentially positive consequences for the industry is the launch of the Play Station 2 (PS2) games console by Sony. This is the first mass-market consumer-electronics item to feature a blue LED status-indicator lamp. There are firms that offer LED-based novelties, such as key-ring lamps, map readers, solar lighting units and car accessories but, until the debut of PS2, no home appliance - TV, VCR or hi-fi - employed blue LEDs for status indication. Common practice is to use cheap red, green or amber LEDs.

Multicolour displays were important to the initial growth of the blue LED market and remain the biggest consumer of these devices. The debut of the status lamp on the PS2 could change the direction of this business and kick-start the indicator sector for blue LEDs. PS2 sales will represent a USD 10 million market by the end of 2001, which could become USD 75 million in the likely five-year life-span of the PS2.

Blue LEDs give the PS2 high visual impact. On economic grounds the move makes little sense. Blue LEDs are more expensive than red or amber ones and the unit is powered via the mains so it does not exploit the diodes' power-saving qualities.

Industry observers expect that PS2 will "light the way" for other products to use the unique combination of characteristics of the high-brightness blue-LED family.

Alan Yu of AXT in Fremont, California in the US said: "Although the blue-LED market has been expanding over the last few years, significant growth has yet to occur. With device brightness improving, production costs dropping and applications expanding, we expect an acceleration of growth in the coming years. AXT has produced a four-fold increase in brightness in the past nine months. Applications for these high-brightness LEDs include signage, traffic lights and backlighting. With energy shortages happening right now, LEDs offer a more efficient light-source alternative for the future."

LEDs are increasingly being chosen for their aesthetic appeal to illuminate public areas both inside and outside buildings. Manufacturers are hoping to lower prices and increase the performance to penetrate the domestic market and replace filament, fluorescent and neon lamps with semiconductor LED-based units. From its early beginnings with just two players - Nichia Chemical Industries in Japan and Cree in the US - the blue/green-LED business has grown. Now there are a dozen firms involved, with new ones joining all the time, especially in Taiwan. However, the market remains dominated by six companies. The industry is also populated by numerous distributors worldwide.

A notable characteristic of the business is that it is still secretive. This is due to the various patent issues that surround the original blue-LED development by Nichia.

The battle between the most conspicuous players, Nichia and Cree, continues. In late 2000 Nichia filed a patent infringement suit in Cree's backyard of North Carolina, in the US. Nichia has also been fighting a legal battle with Toyoda Gosei over the use of blue-LED technology since 1996. It won two separate cases in August and November last year, but Toyoda has appealed.

Toyoda Gosei recently became the first company in the world to mass produce violet LEDs. The firm's Toyota car affiliate has targeted a novel application for the devices. It will combine LEDs with an optical catalyst for car air purifiers and later in home electronics and lighting equipment. It is predicting annual sales of USD 9.31 million in two to three years.

Cree is unusual in that it is a truly vertically integrated supplier: from wafers and devices to full-colour LED-based electronic displays and modules (through its wholly owned subsidiary Real Color Displays). Unlike its competitors, Cree has licensed its technology to a number of LED-lamp manufacturers, including Sumitomo Electric, Sharp, Lite-On, Osram, Stanley Electric and QT Optoelectronics. The company has also formed a partnership with a key Japanese optocomponent supplier, Rohm Electronics.

Cree also has a special arrangement with Osram Opto Semiconductors - a joint venture of Osram and Infineon Technologies - for the supply of SiC/GaN epiwafers and substrates. This is to support Osram's mass-production facilities in Germany and Malaysia for lighting products. Cree's Real Color Displays brand is marketed under the Osram name and Osram accounted for 35% of Cree's revenues in 1999.

Cree introduced the world's first commercially viable blue-LED chip in 1995 (the DH-85), and has since developed several generations of blue LEDs that are brighter, easier to manufacture and, more importantly, have a lower unit cost.

All of Cree's manufacturing is carried out at its recently expanded headquarters in Durham in the UK. In response to increased existing and prospective new orders it is completing a 12,000 m2 expansion of its LED production site.

Cree supplies the majority of all SiC wafers and SiC-based semiconductor products in the world today. Its blue-LED chips are primarily used for backlighting car dashboards, cell phones and liquid-crystal displays. To boost its technology base in LED products, last May the firm completed its acquisition of Nitres, a leader in the R&D of nitride-based semiconductor devices.

Osram Opto Semiconductors has said that from February 2002 it will produce LEDs on a 40,000 m2 site in Regensburg, Germany. The investment amounts to 733.5 million, with a further 788 million required for machinery. Toshiba has also built its first factory in Germany to make LEDs for the automotive industry. LumiLeds, a Philips Lighting/Agilent joint venture, is the global leader in LED-based traffic signals. It has a separate division that is committed to this technology and its applications. The firm has recently linked up with Swarco Futurit, one of the world's leading traffic-signal makers. The first tangible proof of the agreement will be a new, jointly developed LED-based signalling product for the European, Asian and South American retrofit markets.

In Germany there is a production centre for the epitaxial equipment that is used in the bulk manufacture of blue/green and other LEDs. The Aixtron AIX 2600G3 and AIX 2000/2400HT underpin much of the mass production of LEDs around the world.

Aixtron president, Holger Jürgensen commented, "We are seeing sustained growth in all aspects of optoelectronics, but there is particular interest in the G3 type of reactor for the mass production of LEDs.

"This has produced a revolution in the business where, previously, LED manufacture relied on older techniques that are based on single-wafer processing. The G3 is a true multiwafer approach that can bring the excellent economics of older methods to advanced heterostructure growth, which underpins the new generation of LEDs."

One of the most important centres for growth of high-brightness LEDs is Taiwan. Such is the manufacturing base on this island that it is now the third largest, supplying more than 70% of the world's PCs, 50% of the laptops and DVD players and no less than 90% of the world's scanners. This activity demands huge numbers of components, which were previously sourced from abroad, mainly Japan.

In the mid-1990s Taiwan resolved to become self-sufficient and it targeted areas such as optoelectronics to install the requisite production base. By 1999 it had more than one-third of the world's LED production. Collectively, Taiwan's dozen or so companies are making more than 4 billion LEDs a month. Several of these businesses intend to be world leaders in the green/blue part of the spectrum with six firms already gearing up for these devices.

There are more than 100 epitaxy reactors in Taiwan and Aixtron has sold 70% of them for opto applications. Approximately 40% of these were for nitride-based blue/green LED R&D or manufacture.

This year Christmas trees were predominantly lit by conventional glass-based lamps and not by LEDs. There were no LED Christmas lights available in UK shops. However, LED tree lights should become commonplace before too long. Lights are available from LED Power in the US and Excellence in Optoelectronics in Taiwan.

Compared with incandescent lamps it is plain to see how the Christmas tree stands to benefit from a switch to LEDs, which are durable and robust. According to one supplier, Omega, the LED lamps and enclosure can withstand up to 120 kg of pressure.

Traditional Christmas lights are guaranteed for only three months. An LED set could operate continuously for more than 10,000 h. Individual LED lamps have a life of 50,000 h compared with an incandescent bulb life of 5000 h. Super-brightness LED lamps are available in red, yellow, orange, green, blue, pink and white. Another key factor in these environmentally aware times is power consumption. The LED lamp can be described as a "cool" light, because it emits very little heat. Omega cites the power consumption of a traditional bulb as 0.5 W compared with only 0.05 W used by an LED. This means that the 120 LED lamps in a Christmas light set would consume only 4.8 W.

The signs are that the latest LEDs are moving out of multicolour displays and into indicator-lamp markets. This is helped a great deal by the high profile use of blue LEDs in the PS2. The next five years should see a growing take up of these diodes as their price comes down.

The next few years should see blue and white LEDs appearing in more and more domestic appliances - who knows, by 2002 we might be able to buy Christmas tree lights based on LEDs, replete with green, blue, violet and white LEDs. AXT; Cree; United Epitaxy; Lite-On; GELcore; Vishay Intertechnology; Matsushita; Stanley Electric; Epistar; OptoTech; Arima; VPEC; Nitronex; Nichia Chemical Ind; Osram Optoelectronics; Agilent; Toyoda Gosei; Uniroyal; Rohm Electronics; SEI.

Optikos Corporation Hyperion OpticsSynopsys, Optical Solutions GroupCeNing Optics Co LtdOmicron-Laserage Laserprodukte GmbHPhoton Engineering, LLCSpectrum Scientific Inc. -  SSI Optics
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