The LED sector is on the cusp of becoming the third of Taiwan’s industries to see annual production value of over a trillion NT dollars, the first two having been semiconductors and thin-film-transistor liquid-crystal-display panels. “The local LED industry has been expecting a boom for quite a while. We are seeing large-volume orders coming in this year, especially from mainland China,” said Murphy Lin, director of the Industrial Research Division at the Taiwan-based Photonics Industry & Technology Development Association. “The time has finally come for the industry to shine,” he added.
Anticipating accelerated growth in the years to come, industry representatives from Taiwan and mainland China, Taiwan’s Bureau of Energy (a department of the Ministry of Economic Affairs) and the mainland’s Ministry of Science and Technology participated in the Photonics Festival in Taiwan and a series of conferences in early June to share their experiences in technology development and market promotion.
“Taiwan is a global leader in LED production, with output valued at NT$10 billion (US$305 billion) in 2008. Given the country’s superior manufacturing capabilities and the tremendous market potential of the mainland, the two can and should work together to make inroads into the global market,” said BOE Director-General Yeh Huey-ching. “The synergies resulting from their collaboration will enhance the competitiveness of LED makers in both Taiwan and the mainland,” he stressed.
Peter Shih, PIDA founder and chairman, urged parties on both sides to establish a set of industry standards as well as product testing platforms to facilitate the development of more applications. “Taiwan’s LED firms should take a long-term approach to the mainland China market,” he said.
Three promising applications will converge to provide momentum for the industry, namely LED streetlights, outdoor displays and backlights for flat panel displays. Among the three segments, backlights for medium- and large-size flat panel displays are expected to register the strongest growth in the short term, while LED lighting possesses the most potential in the long run, according to a research report released by the Topology Research Institute in June.
Awareness of sustainability has led governments around the world to start introducing clean energy policies, including the phasing out of incandescent light bulbs. By 2012, Australia, New Zealand, Japan, Taiwan, Canada, Argentina and the EU will ban the production and sale of such products, using instead energy-saving substitutes, the TRI report said.
Given their long life, high energy efficiency and environment- friendly features, LEDs are poised to become the preferred choice for streetlamps. MOEA Minister Yiin Chii-ming said May 19 that in an effort to save energy and reduce the country’s emissions of carbon dioxide, the government would spend nearly NT$1.24 billion over the next three years to replace the island’s 260,000 incandescent traffic signals and streetlamps with LED lights.
The agency expects the new system to reduce associated power consumption by 85 percent. Meanwhile, lower maintenance costs and less resultant environmental pollution will translate into a savings of NT$86 million a year.
According to TRI, global demand for LED streetlights should reach 2.5 million units this year, or 178 percent of 2008 sales. The research firm is painting a very rosy picture for the future as well, estimating 75-percent annual growth in production value for 2010.
Demand from the mainland alone—where 1.4 million lamps are expected to be sold—will account for 56 percent of global volume this year. At US$600 per set, the mainland’s LED streetlight market may amount to US$1.5 billion in 2010, with the potential for the entire mainland market estimated by TRI to be 29 million lights, valued at roughly US$17.4 billion.
LEDs backlights can help manufacturers reduce the thickness of notebooks by better than 70 percent compared with those using cold cathode fluorescent lamps, the traditional choice. Ultra-low-voltage notebooks are made possible by the use of tiny LED beads as backlights, while all netbooks—notebooks designed primarily for Internet use—utilize LEDs as their light source. This has driven up the penetration rate of LED monitors from 3.5 percent in 2007 to 14 percent in 2008. As the price gap between the two lighting sources continues to narrow, medium and low-end notebooks will start to employ the technology as well. TRI expects 60 percent of all notebooks shipped in 2009 to be equipped with the feature, with the share jumping to nearly 95 percent next year.
With the ability to deliver mesmerizing effects, outdoor displays are another area with tremendous prospects. Taiwan’s Optotech Corp. has reached new heights following its production of the “sky screen” in Beijing prior to the 2008 Olympics. It recently successfully outbid competitors and will supply several large LED display screens used in the China Pavilion at the World Expo 2010 in Shanghai, an occasion primed to be a showcase for the technology.
An Optotech official told TaiwanToday that, despite the industry’s low barriers to entry, Taiwanese firms still hold several advantages over their mainland rivals. “We possess far better core technology, greater cost efficiency and a knack for turning our customers’ ideas into products,” he said. “Quality is still the determining factor in this business,” he stressed.
Eileen Huang, a TRI research analyst, concurred. She also mentioned the importance of building a distribution network in the mainland. Taking streetlights as an example, she said, “Since opportunities in this area will come in the form of public construction projects, finding the right contacts and channels will be extremely important.”
Huang noted that of the reasons Optotech has been able to make inroads into the mainland is that the company has been trying to do so for a long time. “Taiwan still holds a technological edge over the mainland, but local firms’ first priority must be to localize their distribution channels in order to establish a firm foothold in the mainland,” she concluded.
Write to Meg Chang at meg.chang@mail.gio.gov.tw