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GaN chip & LED lighting market growth forecasts

GaN HEMT-LED chip device.
GaN HEMT-LED chip device.

Boosted by increasing demand from the lighting, tablet and cellphone backlighting segments, global revenue for gallium nitride (GaN) light-emitting diodes (LEDs) rose 10.6 percent from $11.2 billion in 2012 to $12.4 billion in 2013, but growth is dramatically slowing down according a recent report by IHS Technology that will be offset partially for growth in power chips. This market research firm has forecasted GaN LED revenue to grow just 4 percent to $12.9 billion in 2014. Even though unit shipments are expected to rise over this period, the market will enter a multi-year trend of flat growth starting in 2015, based on data from the new IHS report. Unit shipments are predicted to increase only 3-4 percent from 2015 through 2018, following significantly higher growth of 17.3 percent in 2013 and 7.3 percent in 2014.

LEDs are commonly-used as backlights for liquid-crystal display (LCD) panels. However, backlighting applications including TVs and monitors are expected to reach 100 percent LED saturation in the next couple years. What’s more, the average selling price of the LEDs in TVs and PC monitors shipped has begun to decline, leading to falling revenue. In addition, the rapid rise of LEDs for backlighting in tablet computers is slowing, while shipments of tablets are also not growing as rapidly as past years. Moreover, consumers tend to retain tablet mobile devices over smartphone mobile devices as well, making for less turnover and thus positive spillover effects. Overall, the GaN LED backlighting segment is projected to fall from $4.3 billion in 2013 to $3.7 bilion in 2018.

The total GaN LED lighting segment will rise from $4.2 billion in 2013 to $5.9 billion in 2018, according to the IHS report. While all GaN LED backlighting applications combined still exceeded the general lighting segment, including highly energy-efficient residential and commercial building applications, in 2013, at $5.5 billion compared to $4.2 billion, general lighting is expected to eclipse backlighting in 2016. General lighting has the greatest total market potential of most areas of electronic devices due to the fundamental nature that lighting plays in human society, while LEDs offer the clearest path at energy-efficiency, which are becoming more attractive as they become more affordable.

The GaN material market will continue to benefit from diversification in usage due to its additional application beyond LEDs for high-power and high-frequency chips, since this material system has an inherent competitive advantage over GaAs, SiC and Si. Analysts at Technavio forecast the global power discrete market to grow at a compound annual growth rate of 8.43 percent from 2013-2018, which elevates prospects for GaN. One of the top contributors is the high expected demand for discrete IGBTs, which are a type of high-power chip. Discrete IGBTs enable increased efficiency in high-power electronic devices for consumer, industrial and defense-related applications. Increased growth of various customer segments such as electric vehicles and hybrids, renewable energy, and industrial motor devices are all critical for these chips.

GaN market prospects look bright amid the future growth expected not only in LED lighting but high-power and high-frequency chips as well.

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