SAN JOSE, Calif. -- Earlier this year, analog, memory, logic and other IC vendors began to see huge demand, prompting shortages for select parts and extended lead times.
Now, LEDs are in short supply, some say. Still others believe that LED supply and demand are in balance.
Others see LED equipment and materials shortages.
''Component lead times remain tight. A number of component vendors have told us that lead times remain fairly tight at 8-12 weeks,'' said Daniel Amir, an analyst at Lazard Capital Markets, who just returned from the recent LightFair International event, in New York.
''The supply situation is tight due to increasing demand from backlighting for TVs and general lighting markets,'' he said. ''Vendors expect this situation to persist until the end of the year at least.''
On the other hand, ASPs are dropping for LEDs. ''We have learned that prices have declined about 30 percent year-on-year on a lumen basis and should continue to drop as more supply comes to the market and performance improves,'' he said.
As a result, there are a plethora of LED projects. ''Many vendors at the show estimated that 200-plus large commercial projects were out for bids during 2010, up from (about) 50 or so last year,'' he said. ''Commercial lighting projects include warehouses, retail stores, hotels, restaurants and outside area or architectural lighting. Companies that are seeking LED solutions include Walmart, Albertson’s, Fedex, UPS, and others. Project sizes range from $2-to-$10 million and reflect ROIs in the range of 1-3 years for many installations.''
Others have a different viewpoint. ''In terms of the overall LED market environment, supply demand is roughly in balance with leadtimes in the 3-10 weeks range and with pricing declining at what we would view as 5-10 percent quarterly (normal),'' said Hans Mosesmann, an analyst with Raymond James & Associates Inc. ''Power LED pricing may be coming down at 20 percent plus levels recently (quarterly), however, consistent with historical norms at the highend
of the LED component segment in order stimulate demand.''
In any case, the fast-growing market for high-brightness LEDs in LCD TVs will be restricted by a shortage of key semiconductor materials in the second half of 2010, according to Strategy Analytics.
The rapid penetration of LED backlighting modules in LCD TVs has already seen demand soar, for capital equipment, particularly for the metal-organic chemical vapor deposition (MOCVD) reactors. A similar trend is now evident in the supply of consumables, specifically the metal-organic material trimethylgallium (TMG) and sapphire wafers.
Demand for TMG already exceeds the available supply; thus manufacturers need to absorb a 20 percent price increase in the near term. A shortage of sapphire wafers -- upon which most blue and white LEDs are produced --is also likely in the second half of 2010, according to the firm.
“Concerns have previously been raised over the ability of MOCVD equipment vendors to meet rapidly increasing demand,” noted Asif Anwar, an analyst at Strategy Analytics. “The concern for short supply of materials will create a bottleneck for LED market growth over the short term.”