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LED Industry Won't Keep Up with Demand in 2010

Large-size LCDs, especially LCD TVs will feel the worst impact

Mar 6, 2010 11:48 GMT  ·  By
LED industry faced with undersupply
   LED industry faced with undersupply

Adoption of LED backlighting has been on a rapid rise over the past few years and iSupply predicts a very high chance that the LED industry won't be able to keep up with demand in 2010. In 2009, LED consumption reached 63 billion, up from the 57 million in 2008. This is very close to the actual current maximum capacity of the LED industry itself (75 million) and, if production capacity is not increased, most popular LED devices, particularly large-size LCDs, will be faced with serious undersupply.

These marketing conditions have arisen because LEDs are no longer being used only in large LCD monitors, but also in TVs and most flat-panel computer screens. Such displays are present in a variety of devices, including photo frames, digital cameras and notebooks, Out of all these, TVs are the ones that use most LEDs per unit, around 300 to 500. Not only that, but LED lightning has also started appearing in other areas, such as the general illumination market, which, although in its infancy, should become mainstream in about two years.

"It is clear that demand is outstripping supply," said Jagdish Rebello, senior director and principal analyst for wireless research at iSuppli. "With LED market growth forecasted to rise by double-digit percentages for at least the next three years, including 2010, a drastic undersupply situation could occur this year unless additional capacity is brought online to meet the increased demand."

"The shortage predicted in 2010 applies to LEDs used for the backlighting of large-size LCD TVs," stated Sweta Dash, senior director for LCD research at iSuppli. "On the demand side, the shortage is being spurred by strong consumer desire, given the growing popularity of LED-backlit LCD TVs due to their super-slim form factors and improvements in picture quality. On the supply side, TV manufacturers are striving to increase their sales of LED-backlit sets."

The LED industry has already started to put effort into ramping up production, but this will take time and may not keep up with the actual demand.