MOUNTAIN VIEW, CA - From 1995 through 2004, the high-brightness LED (HB LED) market exhibited a remarkable growth history, with an average annual growth rate of 46%, resulting in a market size of $3.7 billion in 2004. According to a new report from Strategies Unlimited, this trend was supported by the concomitant growth of the HB LED supply industry, in terms of both the organic growth of existing or “legacy” LED manufacturers and in new entrants to the market, most of which are located in Asia. In 2005, the number of companies supplying HB LEDs at different levels of the vertical supply chain exceeded 100 worldwide.
In “High-Brightness LED Global Supplier Analysis” (November 2005), Strategies Unlimited notes that the HB LED market continues to be dominated by the largest companies, most of which have existed at least from the mid-1990s, if not much earlier. In terms of the $3.7 billion market for packaged HB LEDs in 2004, more than 50% of the market is supplied by just the top five companies, and nearly three-quarters of the market is supplied by the top 10 companies (out of a total of 48 companies identified and profiled as packaged HB LED suppliers).
However, even as new suppliers enter the market, the number of established competitors is beginning to shrink, especially in Asia. Merchant Taiwanese chip suppliers Epitech and South Epitaxy merged in July 2005, and Epistar and UEC are expected to complete their merger by the end of the year. Other mergers and acquisitions are expected in 2006 and beyond. Overall, Asia remains the largest source of HB LED supply, accounting for 76% of the packaged HB LED market and 57% of the merchant epitaxial wafer and chip market in 2004.
“In spite of some industry consolidation, we can expect to see new HB LED suppliers continue to enter the market, with either new packaging concepts or new device structures based on innovative technologies such as photonic crystals,” said Robert Steele, Strategies Unlimited’s Director of Optoelectronics Programs and longtime LED market analyst. “Although it is more than 10 years old, the HB LED industry is far from mature, and new companies with new ideas will continue to help propel the industry to new frontiers in both technology and applications.”