LED industry: Alight with challenges and opportunities

By Maureen Aylward

Zintro is seeing an increasing interest from the LED industry, so we asked experts in this area what are the challenges and opportunities that the LED industry faces right now and where is the technology headed. Here is what several experts had to say.

Paul Brunemeier, PhD, a compound semiconductor device expert with more than 20 years of related experience, says that there are many distinct commercial markets for LEDs at present, but possibly the one drawing the most attention is illumination. “Worldwide, the illumination market is between $60 billion and $100 billion per year and is highly fragmented—meaning that it is a collection of many smaller businesses,” explains Brunemeir. Brunemeir says that illumination is driven by cost and performance. White LEDs, predominantly used in illumination, require expensive substrates for gallium nitride epitaxy (sapphire or silicon carbide) and have a large built-in cost component. The equipment required to make the materials is very expensive: about $2 million per epitaxy system with most companies requiring dozens of systems, keeping capital costs for manufacturing substantial.

“With time and innovation, the costs will come down,” says Brunemeir. “A 60W incandescent bulb, which has a limited lifetime, costs about 50 cents to one dollar. A 60W LED retrofit bulb with a lifetime exceeding 20 years costs about $30 to $40. Prices for LED bulbs that register below $10 are probable in the next several years as improved volumes and manufacturing methods arrive.”

Brunemeir says that technical challenges involve maintaining good color quality (> 80 CRI) with good efficiency and developing low cost ways to extract LED heat. “Ultimately, inorganic LED technology is not far from theoretical best performance,” he says. “Manufacturers continue to wring more efficiency and color quality out of the devices. A new technology needs to come along to create a large change in efficiency or provide a near-term path for reducing unit costs to the equivalent of an incandescent bulb.”

Lorraine Calcott, a lighting and energy consultant with 18 years experience in all types of lighting, says that the challenges for the LED industry are continuity of how the output of luminaries are measured and the life of the LEDs under those conditions. “Currently there is not enough clear direction or regulation as to how LEDs are measured and the end-users/clients are easily confused,” Calcott points out. However, she sees the opportunities of this light source as vast. “With such a small source, and so many new and exciting ways to utilize LEDs, the industry is primed for even more development over the coming months and years, Calcott says. “The technology is heading for global domination of the lighting industry. Combined with organic light emitting diodes (OLED) and perhaps even plasma, we may see a shift in how we light our world and what kinds of diversity these technologies can bring,” she says.

James Creveling, an expert in the marketing and distribution of LED components, says that from a market perspective the LED industry is projected to see from 2012 to 2015 a historic level of metal-organic chemical vapor deposition (MOCVD) machines installed inKorea,Japan, andChina. “This represents about half of the current production. It positionsChina to be nearly 35 percent of the market supply. In addition, companies with existing reactors are moving from two inch to six inch (or higher) substrates, yielding a higher level of product per pass and adding to the supply,” says Creveling. “Demand has not risen to the level of supply, so for the short term, we are looking at an overcapacity model where numerous companies vie for a limited client base.”

Creveling sees the lighting industry as poised to deliver lower cost/high quality illumination products. Current payback (prior to oversupply) place LEDs in a one year return on investment for commercial incandescent replacement and five year for commercial CFLs. “The next logical steps for LED illumination is to further improve system efficacy, reduce lamp cost and content, and deliver digital lighting control,” says Creveling.

Bertrand Dussert, PhD, president of the International Ultraviolet Association and an expert in the UV industry for over 15 years, says that he sees the question on the market potential of UV LEDs for water treatment applications (disinfection) often come up. “The current state-of-the-art technology has major drawbacks when compared to commercially available UV lamps that are mercury-based, either low- or medium-pressure,” Dussert points out. Disadvantages include lower UVC efficiency (conversion of input power into germicidal UV energy), higher lamp cost, lower power per lamp, and shorter lifetime. However, UV LEDs have some significant advantages, such as the fact the lamps are mercury-free and electrodeless and can be operated in an instant on/off mode. “At this stage, I see significant potential for small water disinfection applications, such as point-of-use/point-of-entry applications,” says Dussert. “The market potential could grow exponentially if technology improvements are made, successfully addressing the limitations.”

By Maureen Aylward

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