INFOCUS | INDIA-CHINA | TECHNOLOGY
The latest range of ultra bright LEDs consume 11 per cent of the electrical power that an incandescent bulb does for same light output in Lumen. That means today’s 11W LED light will ideally give same light output in Lumen as 100W conventional filament bulb. Thus LED will reduce global power demand by 50 per cent if they replace all conventional lights used in the world. This will eliminate the need to turn to dangerous and expensive nuclear energy and enrich western multinationals like those in France or USA.
China lights up with lED
India still a flicker in the dark |16| India-China Chronicle July 2012
In the next 10 years one might see LED prices as low as or cheaper than conventional light sources. PS Deodhar
L
ED or light-emitting diode turns electrical energy into luminous energy and emit visible light in various colours, such as yellow, green, blue, etc, as well as invisible light, such as infrared and ultraviolet. Compared with the small incandescent bulb and the CFL lamp, light-emitting diodes are specially characterized with low operating voltage and electric current, high reliability and long performance.
Global Industry Status While the Indian government is busy with non-issues, globally the LED industry is rapidly growing. The entry barriers of the light-emitting diode industry from the upstream to the downstream are getting cut down gradually. The upstream industry includes monocrystalline chip and the epitaxial wafer while the middle stream industry is mainly engaged in chip processing and the downstream industry handles packaging, testing and application. The upstream and middle stream industries, most competitive and risky fields on world market, have higher technical contents and require more investments. In the industrial chain of light-emitting diode, epitaxial wafer and chip account for about 70% of profits and the packaging accounts for 10 to 20 percent of profits, with 10 to 20 percent held by application field. Future of LED Under international energy crisis and the gradual improvement of the environmental protection requirements, the semi-conductor lightemitting diode lighting, with long performance, energy saving, safe, green and environmental protection, abundant colours and microminiaturization, has been recognized as the only one and the most important way of energy saving and environmental protection in the world. As said earlier, the semiconductor lights, adopting light-emitting diode as the new lighting source, only run up one tenth of the electricity compared with the ordinary white light lamps and the performance can be postponed 10 folds at the same
brightness. In 2007, the total amount of the global light-emitting diode market exceeded 6 billion USD, up by 13.7 per cent over the previous year. During 2006 to 2009, the annual compound growth rate of the global light-emitting diode market is 10 per cent, most of which will mainly be contributed by the ultra high and high brightness light-emitting diodes. This has grown significantly as prices are falling in 2011; thanks to China. LED light sources are most reliable since just a single chip converts electrical energy into light energy. If its conversion efficiency is the highest,
LED Light sourcEs arE most rELiabLE sincE just a singLE chip convErts ELEctricaL EnErgy into Light EnErgy. if its convErsion EfficiEncy is thE highEst, thE hEat Loss is smaLL anD is wELL managED to protEct thE chip. thE LifE of LED thErEforE is unLimitED anD usuaLLy cLaimED to bE 50,000 hours the heat loss is small and is well managed to protect the chip. The life of LED therefore is unlimited and usually claimed to be 50,000 hours. Against this, Compact Fluorescent Lamps or CFLs, have as many as 40 or more parts and therefore rarely meet its claimed life of 5000 hours. Cheap CFLs from China is indeed a waste of money. Global LED Industry The global light-emitting diode industry is mainly concentrated in Japan, Taiwan, Europe, America, South Korea, China, etc. Japan, the largest producer of the light-emitting diode industry in the world, holds 50 per July 2012 India-China Chronicle |17|
INFOCUS | INDIA-CHINA | TECHNOLOGY
|18| India-China Chronicle July 2012
CHINA LED industry gallops to Rs 25000 crore in 2011 taking full advantage of government support, China's lED industry has logged over 25000 crore rupees in sale by offering a wide range of innovative products. this is 23% more than in 2010. (nYsE: ihs). they are poised to grow almost double to 46000 crores by 2015. the lED market covers lED bulbs, lED displays, traffic signals, automotive use, lCD backlighting, handset key pads, digital still camera flashlights, decorative lighting, street lighting and general illumination. a new demand driver for lEDs in the medium to the long term will be the general lighting market. given the global trend to reduce carbon emissions, China demand in the general lighting segment will be strong for lEDs, which offer lowpower consumption and are environmentally safe. Chinese however are not happy since most of lED wafers are to be imported which indeed have the largest value addition. China trails due to the lack of technological and R & D capabilities. China’s lED players enjoy ample funding from the government. it subsidizes at least 70 percent of the purchase price for metal organic chemical vapour deposition equipment employed in lED manufacturing. Furthermore, tax and utility payment benefits are offered to encourage investments in the domestic lED industry, proving to be an additional boon for local players.
China Light-Emitting Diode Revenue Forecast (Billions of US Dollars)
s12 s10 s8 s6 s4
2015
2014
2013
2012
2011
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2010
s2 2009
packaging and middle stream chip production base. Research firm ‘LEDinside’ says that the industry made about 100 billion LED chips in 2011 for a market that needs only 89 billion. That 12 per cent “oversupply ratio” will worsen to 21 per cent in 2012 after LED makers add manufacturing capacity. This would mean further drop in LED bulbs and tubes. With more than 30-year development, Chinese light-emitting diode industry has formed the basically complete industrial chains, covering the LED inside, epitaxial wafer, chip package and application. At present, China has over 1100 LED enterprises specializing in downstream packaging and application. But the development of the epitaxial wafer and chip in China is comparatively backward. There are only about 10 enterprises engaged in the production of the
While Delhi sleeps Beijing helps the growth of LED industry in China
2008
cent of the market share. Nichia Corporation is the world’s largest provider of the high-brightness light-emitting diodes. Toyoda Gosei Co Ltd is the world’s fourth largest and Japanese is the second largest manufacturer of light-emitting diodes. Osram Opto, located in Europe and America, is the world’s second largest and European is the largest manufacturer of the highbrightness light-emitting diodes. Taiwan, the global production base of consumer electronic products, is mainly engaged in the production of the visible light-emitting diodes. Taiwan is also the world’s largest downstream
source: ihs isuppli Research, august 2011
LED light bridge
epitaxial wafer for LED, as well as few chip manufacturers. With the gradual enhancement of the luminous efficiency and application technologies, the application of the light-emitting diodes has been transferred from the initial indicator lights to screens, such as landscape lighting, backlight, automobile lights, traffic lights, lighting areas, etc. The application of the light-emitting diodes is now in diverse development. It was predicted that the average compound growth rate of sales of the display lightemitting diodes would be above 15 per cent between 2006 and 2010 and the annual average compound growth rate of sales of the landscape lighting will reach over 35 per cent, with the annual average compound growth rate of sales of the backlight light-emitting diodes at more than 30 per cent. In 2010, many patents in the lightemitting diode industry expired. Chinese enterprises took advantage and broke through the shackles of intel-
lectual property rights from European, American and Japanese giants. They will make good use of huge market bases and abundant labour resources in order to occupy a place in the global light-emitting diode market. Indian Scene In spite of the cheaper technical manpower than China, India has little manufacturing of LEDs; none at the mono-crystalline chip level, none at packaging chips into sources for lighting in various forms and very small application level, mostly from kits from China. India’s LED product sources are just traders of (mostly) Chinese end products. The government of India is too busy with politics of one-up-manship that it is not even thinking of any plan. Investor community have sheepherd mentality and that’s why we see so much unwise investment in downstream levels of PV Solar. There will soon be bankruptcy in that sector. Even
the PV cell manufacturers in India are today trading products from China and Taiwan. China too will see an even more serious crash. No one seems to look at the basics. Out of India’s total use of electrical power over 60 per cent in domestic and commercial area is for lighting. LEDs are basically just like sand so its prices will continue to fall as the high initial investments get depreciated and competition drives down prices. Notice that there is 70 per cent value addition today at the chip level in LEDs. In the next 10 years one might see LED prices as low as or cheaper than conventional light sources.
PS Deodhar is President of India-China Economic and Cultural Council. He can be contacted at psdeodhar@icec-council.org
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