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news digest ♦ LEDs


But a softer than expected LED TV market and an increasing sapphire capacity coming from established vendors worked together to rapidly bring supply and demand back into balance this summer. This has triggered a fast drop in wafer prices that have now returned to their pre- shortage levels.


Looking at the back-end of the LED market, the recent Global Semiconductor Packaging Materials Outlook by SEMI and TechSearch Inc. shows very strong growth in LED leadframe shipments. Following the 69 percent unit shipment growth in 2010, LED leadframe shipments are estimated to increase by another 10 percent in 2011. In 2012, shipments are forecasted to reach almost 83 billion units shipped. Data are based on shipments reported by sixteen leadframe suppliers.


The SEMI Opto/LED Fab Forecast tracks over 250 Opto/LED fabs activities worldwide, with detailed information on fab construction and equipment spending, key milestone dates, capacity and ramp up schedule, and more.


Market for sapphire may be dominated by China


In the last 18 months, more than 40 of the 50 new entrants which have announced intentions to enter the sapphire market (applicable to LEDs) are located in China


Following the massive material shortage in 2010, sapphire material and finished wafer prices remained high throughout early 2011 according to Yole Développement’s “Sapphire Market” report.


The situation was aggravated as wafer and LED manufacturers preparing for a massive intake of LED in the LCD TV market started building up sapphire inventory for fear that supply might remain short.


74 www.compoundsemiconductor.net January / February 2012


“Yole Développement forecasts this low pricing to keep on running for the next coming months,” says Eric Virey of Yole Développement.


Coupled with significant volume growth, the sapphire material shortage experienced through 2010 and early 2011 have created a window of opportunity for new entrants. In the last 18 months, more than 50 companies have announced their intention to enter the industry and would bring the total number of potential participants in this market to close to 100. More than 40 of those new entrants are located in China. Looking at midterm, adding up the capacity plans announced by those newcomers leads to a figure corresponding to almost 3x actual demand, a situation unlikely to actually materialise.


While sapphire demand will pick up in late 2011 and early 2012, additional capacity from new entrants is expected to enter the supply chain and keep 2” prices at their historical lows for the foreseeable future.


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