[August 17, 2004] Manufacturing Costs and Distribution Issues Challenge OLED Penetration into Display Market PALO ALTO, Calif. --(Business Wire)-- Aug. 17, 2004 -- Manufacturers of high-brightness light emitting diodes (HBLEDs) have done little to remedy flaws in thermal management and electrostatic discharge (ESD) despite the phenomenal growth of the market. While this restrains the growth of the HBLED market, the absence of a robust supply chain and the low production yields are containing the expansion of the organic LED (OLED) market. New analysis from Frost & Sullivan (www.semiconductors.frost.com), World Emerging LED Markets, reveals that the HBLED market generated revenue of $2.6 billion in 2003 and is expected to reach $5.4 billion in 2007. The OLED market generated $200 million in 2003 and is likely to touch $2.4 billion in 2007. Inefficient thermal management can cause severe heat dissipation, which can create a mismatch between the LED and the lead frame on which it is mounted. Another product reliability issue for HBLED manufacturers is the generation of ESDs in excess of 30-kilo volts, which can cause severe damage to instruments. "To divert attention from the negative effects of faulty product functioning, HBLED manufacturers must educate end users about the products' benefits of higher performance level and lower overall costs," says Frost & Sullivan Research Analyst Ramanan Rajagopalan. Packaging is also an important concern in the HBLED market. Since different packaging techniques are used in the end-user segments there is a lack of standardization in packaging. Efficient packaging can help HBLEDs perform at higher junction temperatures. Some companies that focus on high-power applications use a chip-scale method of packaging, where chips are encapsulated in glass packages. This is expected to resolve some thermal management problems in white LEDs. "Meanwhile, in the HBLED market, technical hurdles involving unregulated current output are resulting in complex operation management, requiring complicated driver circuits," notes Rajagopalan. "The lower impedance offered by these driver circuits over a range of voltages results in unregulated output current, which affects the performance of HBLEDs." The OLED market also has to deal with inadequate processes. The supply chain -- comprising material suppliers, technology developers, and product developers -- is not balanced and this challenges market penetration. However, with the niche market identification and demand strengthening, the supply chain is expected to stabilize. In addition, the OLED market is disadvantaged by exorbitant manufacturing costs, which is a major deterrent to mass production. Moreover, poor production yields do not justify the investments in new manufacturing units. OLED companies must identify cost-effective production methods and innovative manufacturing techniques to scale production lines and meet evolving market demand. "OLED technology has demonstrated the capability to produce displays that are thinner, have better contrast, and a wider viewing angle compared to conventional display technologies. These features evince that OLED displays have a promising future in the small displays portable devices market," notes Senior Research Analyst, Deepa Doraiswamy. The OLED market also has to deal with intellectual property issues as companies focus on improving their product portfolios. While developing patented technology does provide companies prime-mover advantage, it threatens the survival of smaller companies that have not yet proven the potential of their technologies. "With consolidation poised to become a trend in the OLED market, smaller companies are likely to join forces with the bigger enterprises to develop their own technology or product," observes Doraiswamy. World Emerging LED Markets, part of the Total Semiconductors Subscription, discusses the various trends and opportunities in the market. The study tackles the potential and opportunities for HBLEDs and OLEDs. The performance benefits and capability to address market demand are also explained. Interviews and executive summaries are available to the press. If you are interested in an analysis overview which provides manufacturers, end-users and other industry participants an overview, summary, challenges and latest coverage of the World Emerging LED Markets, then send an email to Julia Paulson - North American Corporate Communications at [email protected] with the following information: Full name, Company Name, Title, Contact Tel Number, Contact Fax Number, Email. Upon receipt of the above information, an overview will be emailed to you. Frost & Sullivan, an international growth consultancy, has been supporting clients' expansion for more than four decades. Our market expertise covers a broad spectrum of industries, while our portfolio of advisory competencies includes custom strategic consulting, market intelligence, and management training. Our mission is to forge partnerships with our clients' management teams to deliver market insights and to create value and drive growth through innovative approaches. Frost & Sullivan's network of consultants, industry experts, corporate trainers, and support staff spans the globe with offices in every major country. World Emerging LED Markets A919 [ Back To TMCnet.com's Homepage ]