Lack of supply threatens LED market

Sep 7, 2009 The lack of supply has been extending widely in the LED market. It began in wafer, chips and equipment. Now, it extends to packaging businesses. Such a phenomenon stems from the drastic increase of demand for backlight units used in LCD TV sets and laptop computers as well as LED lighting.

On September 6, industry insiders said that many LED packaging companies are raising their operation rate in order to meet the flooding orders. At the same time, they are trying to expand manufacturing facilities. Lumens constructed a new facility in Suzhou, China, to begin the mass production of backlight units used in laptop computers. Also, it will add a packaging line near the facility within the second half. Seoul Semiconductors also made a short-term leverage of KRW 30 billion to add additional facilities to meet the growing demands for LED.

LEDs Magazine published letter from Michael Wang, Manager of Kingbright Electronics Co., Ltd., which says that "Cree, one of Kingbright's major LED die suppliers for blue, green, and white colors, has recently pushed out the delivery lead-times for their LED chips to six months or more.” Kingbright is suggesting that its customers should explore alternative part numbers for new designs, because “unexpected upsides for Cree-related parts may require more time to fulfill.”

Despite the additional effort to increase the output, the lack of supply is not resolved in the market. LCD BLU makers and light makers are suffering from the security of LED chips and packaging. An insider of an LED packaging company said, “Everything ranging from materials to supply is out of stock. The delayed orders are the equivalent to the volume of 4 months. Many light companies are trying to maintain the level of inventory to a month volume.”

Author:  Yaroslav Oleksenko

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