Sapphire Industry Watch – April 3

  • International Youth Culture Centre glows with colorful LED lighting – Gizmag: With 700,000 high-efficiency LED nodes, LED linear lighting and LED flood lighting, the International Youth Culture Centre in Nanjing, China is a colorful addition to the city’s skyline. The LED system’s palette of 16 million colors beautifully illuminates the development, while being more energy efficient than traditional LED lights. The system, which was designed by Philips, is reported to save up to 60 percent in electricity used compared to normal LED lights.
  • Seattle Mariners first team to use LED lights, last 97,000 more hours – UPI: Safeco Field, the home of the Seattle Mariners, is the first Major League Baseball stadium to fully illuminate its playing field with LED lights. In addition to reducing glares and shadows on the field, the LED lights turn on instantly and have reduced energy consumption for field lighting by up to 70 percent.
  • Rubicon appoints GTAT’s former VP of crystal growth systems development as CTO – Semiconductor Today: Dr. Christine Richardson has been appointed as Chief Technology Officer of Rubicon Technology. Formerly the Vice President of Crystal Growth Systems Development & Engineering at GT Advanced Technologies, Richardson will take responsibility for the ongoing development of Rubicon’s technology platforms and also lead R&D activities.
  • Solar flower trees to power up alternative lighting solutions – The Times of India: The Kerala State Electricity Board (KSEB) has installed two solar flower trees in front of its headquarters as part of the state’s initiative to promote alternative lighting solutions in public spaces. The geometrically-cut flower-shaped solar panels generate power throughout the day and, if it’s sunny enough, LED lights attached to the petals can remain lit continuously for up to 12 hours.

LED Lighting – Crossing the Chasm

The lighting industry has been eagerly waiting for LED lighting to take off.  After taking a look at coverage of this spring’s industry shows, it is clear that LED lighting for consumers is poised for mass adoption.  Industry observers have been picking up on some positive signals from industry trade shows worldwide and even your local home improvement store shelves. Here’s a look at the LED lighting market at three shows from three continents.

Light Fair 2012 — According to LED Magazine, the big news at the Las Vegas-based show was 100W retrofit lamps.  At least three industry leaders had 100W-equivalent light bulb announcements for the show including Philips Lighting, Osram Sylvania and GE Lighting.  Osram Sylvania may be first to market with their 100W-equivalet lamp with plans to ship this summer.  They also have a 3-way lamp in development making consumers who love their 3-way bulbs happy.  The show moves to Philadelphia in 2013.

Light & Building 2012 — Industry Analyst Philip Smallwood wrote up the show for the IMS Research Analyst Blog.  Smallwood mentioned that he was, “first impressed, then overwhelmed by the sheer number of LED lamps on display at the show.”  His big take-away for the show held in Frankfurt, Germany:  consumers are going to have a difficult time selecting the right LED replacement for a 60W bulb.  He further covered the types of buyers (with a nod to Geoffrey Moore and Crossing the Chasm):  early adopters and general consumers. Visit Philip’s blog post for more.

Guangzhou International Lighting Exhibition 2012— A report from LEDinside indicates that the LED market in Asia is making moves towards maturity.  The show floor at the Guangzhou International Lighting Exhibition in China was full of companies focused on LED lighting with only a few vendors focused on incandescent.  “LEDinside believes the little amount of attention traditional lighting received at (the show) marked the beginning of LED’s wide adoption. Given LED technology’s ongoing improvement, the dipping cost and the increasing market acceptance, it may not be long before LED popularity sees a sharp surge,” concluded the author.

For Further Reading:

Light & Building 2012 – LEDs Need to Evolve from the Next Greatest Gadget into a Light Bulb, Philip Smallwood, IMS Research

LEDs Magazine, Lamp form remains important, SSL takes new shape at LFI, Guangzhou International Lighting Exhibition 2012 Report II: Exhibition Space Increase Marked LED Market’s Climbing Maturity

Barriers to Entry 2: Yole Developpement Talks Sapphire, New Market Entrants Unlikely to Match Yields of Industry Leaders

In Part 2 in our Barriers to Entry posts (Part 1 is here), we’re focusing on a recent report from the industry experts at Yole Developpement.  Yole analysts have been keeping a keen eye on worldwide capacity for sapphire crystal growth.  According to Yole’s Eric Virey, more than 50 companies have announced their intention to enter the sapphire growth market, with more than 40 located in China.  While the capacity plans announced by all of the new companies collectively would add up to triple world demand, Yole believes it is “a situation unlikely to actually materialize.”

Why?  These new market players have little or no prior experience in sapphire crystal growth and wafer manufacturing.  And, while there are some “turn-key” solutions to lower the barrier to entry, “reaching and sustaining high quality and high yields in sapphire crystal growth still requires significant expertise.”  Indeed the learning curve is steep to reach yield levels on par with established Tier 1 manufacturers.

Yole’s report also said that margins in 2010 were favorable to new entrants allowing them to achieve comfortable margins “despite low yields and sub-par technology.”  However, with 2 inch pricing at historic lows, Yole calculates that they will lose money at the current market prices while “established vendors with higher yields, large volumes, and a more favorable product mix, including large-diameter wafers, can achieve production cost <$5 that will allow them to maintain positive margins and weather the storm.”

For Further Reading: Yole Developpement web site


Barriers to Entry 1: China’s Appetite for MOCVD Reactors & How Easy Is It to Make Sapphire?

Questions about the barriers to entry and new market entrants from China have been dogging the LED industry.  A few industry experts have been taking a look at China and what it means to the industry.  Strategies Unlimited analyst Tom Hausken recently wrote a piece for LEDs Magazine about the Chinese LED manufacturing industry. China has been throwing a lot of capital at its nascent LED industry and the world is watching.  Tom’s article put some of the talk about the Chinese LED industry into perspective.

According to Hausken, research on the Chinese LED industry by Strategies Unlimited partner GG-LED shows that the Chinese effort goes far beyond MOCVD equipment.  The report further calls into question whether the Chinese can match world-class competitors.  “The report points out that the real shortage in expertise is not only designing LEDs and operating epitaxy reactors in general research, but particularly in planning and leading enterprises that can match world-class competitors,” wrote Hausken.

According to the report, Chinese investment is overly concentrated in LED epitaxy and chip production due to an outdated perception that the distribution of profit margins in the supply chain were concentrated at the epitaxy and chip layer. 

Only time will tell if the Chinese LED industry can get up to speed and become competitive on the world stage.  Hausken commented, “There is over-investment in LED manufacturing in China, but what will be the impact? At the very least, it makes the market less certain. A glut will accelerate the trend toward cheaper LEDs and LED lighting, which has been a goal of national policy makers. It may hurt chip makers and vendors of fab equipment along the way,if only by spoiling an otherwise rational market.”

Look for Part 2, Barriers to Entry 2 in a future post.

For Further Reading:  LEDs Magazine