1. High-Brightness LED
Applications and Market
Trends
ACEEE 2006 Summit on Emerging
Technologies for Energy Efficiency
October 26, 2006
Robert V. Steele
Strategies Unlimited
rsteele@strategies-u.com

2. Outline
Introduction
High-Brightness LED Markets
Solid-State Lighting
Outlook and Forecast
2

3. Technology Scope
Will focus discussion on semiconductor-
based inorganic LEDs
Organic LEDs (OLEDs) have potential in the
long term to be used for lighting, but they are
still in the R&D stage for this purpose
High-brightness inorganic LEDs have been in
the commercial market for 10 years and
already have a foothold in the lighting market
3

4. LED History
LEDs have been in commercial production for over 35
years (billions and billions sold)
For 25 years mainly used as small indicator lamps and
alphanumeric displays
Because of limitations of materials technology (GaP and
GaAsP):
Did not have full color spectrum (e.g. blue and green)
Could not use in full sunlight outdoor conditions
High-brightness AlGaAs introduced in mid-1980s by HP
and Stanley Electric
High brightness, but limited to 660 nm (deep red)
4

5. LED History (cont.)
LED materials “revolution” occurred in the early-mid 1990s
InGaAlP developed by HP and Toshiba produced high-
brightness red, orange and yellow (ROY)
InGaN developed by Nichia, Toyoda Gosei and Cree
produced high-brightness blue and green (and white, using
blue + phosphor)
Devices fabricated with sophisticated production tools –
metalorganic chemical vapor deposition (MOCVD) - rather
than LPE and VPE used in conventional LEDs
In the past 10 years, performance of HB LEDs has
improved dramatically, and prices have fallen steadily
5

6. LED Performance History
(Red) “Haitz’s Law”
100.000
Flux/Package
10.000
Cost/Lumen
Lumens or 1.000
$/lumen
0.100
-10x/Decade
0.010
+20x/Decade
0.001
1965 1970 1975 1980 1985 1990 1995 2000 2005
Source: Roland Haitz
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7. HB LED Market Drivers
Full color spectrum, including white
High visibility, including full sunlight conditions
Long lifetimes (10s of thousands of hours)
Energy efficient
Compact
Automated assembly
Digital addressing for displays and lighting
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8. Outline
Introduction
High-Brightness LED Markets
Solid-State Lighting
Outlook and Forecast
8

9. HB LED Application Space
Other Mobile Appliances
Indicators, small displays
Illumination
amusement, misc. other
HB LED
Market Signs and Displays
Signals
Automotive
9

10. HB LED Market History
CAGR = 42% (1995-2005)
4,500
4,000
3,500
3,000
Revenue 2,500
($ Million) 2,000
1,500
1,000
500
0
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
10

11. 2005 Market
Market grew by 6% to $3.9 billion
Units grew by 24% to 23.6 billion
Dramatic slowdown from 37% growth in
2004, and 2001-2004 average of 46% per
year
Most applications showed reasonable
growth, but Mobile Appliance market
stagnated
Severe pricing pressure for low-end
products due to excess capacity: e.g.
keypad backlights
11

12. Recent Market History
4,500
4,000
3,500 Other
3,000 Illumination
Revenue 2,500 Signals
($ Million) 2,000 Automotive
1,500 Signs/Displays
1,000 Mobile Appliances
500
0
2001 2002 2003 2004 2005
12

13. 2005 Applications
Breakout
Illumi- Other
nation 12%
6%
Signals
2%
Auto- Mobile
motive Appliances
14% 52%
Signs/
Displays
14%
Total: $3.9 Billion
13

14. Outline
Introduction
High-Brightness LED Markets
Application Trends
Solid-State Lighting
Outlook and Forecast
14

15. LED Illumination or “Solid-
State Lighting”
Illumination includes applications in which LEDs
are used to illuminate an object or surface
Not viewed directly (e.g. signs, signals)
Market is in early growth phase
Highly fragmented
Many companies making lighting products
Niche applications
Many non-standard, off-the-shelf products
Applications range from very small (e.g.
flashlights, reading lamps) to multimillion dollar
projects
15

16. Illumination or “Solid-State
Lighting” (cont.)
LEDs are much more expensive than
conventional light sources, but ..
They can provide features not achievable with conventional
light sources
Many applications driven by higher efficiency
and longer lifetimes of LEDs
Most applications are for colored lighting
White light applications are growing
The goal of LED lighting is not just to replace
light bulbs, but to provide additional value
16

17. LED Lighting Applications
(partial list)
Architectural Consumer portable
Retail display (flashlights,
headlamps)
Hospitality (hotels,
restaurants) Signage (channel
letters)
Entertainment
Landscape
Accent and
decorative Outdoor area
lighting
Safety/security
Solar-powered, off-
Machine vision grid
Pool and spa Residential
Museums
17

18. LED Lighting Products
Philips Lighting
Color Kinetics
Optiled
Permlight
18

19. LED Lighting - Hospitality
19

20. LED Lighting – Contour
Lighting and Channel Letters
20

21. LED Lighting - Architectural
21

22. LED Specialty Lighting
Landscape Lighting
Machine Vision
Entertainment
Pool and Spa
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23. LED Residential Lighting
23

24. LED Lighting Market
Development
Market is being developed by lighting
systems companies targeting specific
applications
Both large (e.g. Philips, Osram, GE) and small
companies
Each application requires a unique
approach
Selling points for LEDs include:
High reliability/low maintenance
Long lifetime
Cost competitive on life cycle basis
Esthetics, quality of light
Unique solution to a lighting problem
Satisfies regulatory requirements (e.g. Calif. Title
24) 24

25. White LEDs for Lighting
Vast majority of white LEDs sold today use a
blue LED chip + a “yellowish” phosphor to
achieve white appearance
Addition of red phosphor can improve white
color spectrum (i.e. “warm” white)
Newer, more sophisticated white lighting
products are using RGB color mixing plus
feedback and control to maintain, or change,
white balance
Most efficient way to produce white
25

26. RGB Color Mixing for White
Light
TIR Systems LEXELTM
26

27. Outlook for White LED
Performance*
120
100
Cool W hite
80 W arm W hite Fluorescent
Luminous
Efficacy 60 CFL
(lumen/watt)
40
20 Incandes-
cent
0
2000 2002 2004 2006 2008 2010
*Commercially available LEDs
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28. Hurdles to be Overcome
for Penetration of General
Illumination
Lower cost, higher efficiency white LEDs
Standards (e.g. definition of lifetime)
Binning and color consistency issues
Lighting industry understanding of unique properties
of LEDs; customer acceptance
Establish sales channels into traditional lighting
applications
Integration of drivers, thermal management, optics,
controls for “plug-and-play” solutions
28

29. LED Lighting Market
Evolution
100
10
Total quot;Lampquot;
Market Size General Market
1 LED Lighting
($ Billion) Illumination
Broader
Adoption
0.1
Specialty
Niches
0.01
2000 2005 2010 2015 2020
29

30. National Solid-State
Lighting Programs
US Next Generation Lighting Initiative (NGLI) passed by
Congress in 2005; funded at $20 M/yr
Japan national program since 1998, continuing
National SSL initiatives underway in:
Taiwan
South Korea
China
Combination of government plus private efforts could
make China the largest market for solid state lighting
30

31. National Drivers for Solid-
State Lighting
Huge potential for energy savings
Typically 20-25% of electricity is used for lighting
Potential annual energy cost savings is $10s-
100s billion per country
Reduced oil imports
Reduced CO2 emissions
Technological leadership in a new industry
31

32. Outline
Introduction
High-Brightness LED Markets
Solid-State Lighting
Outlook and Forecast
32

33. Outlook for HB LEDs
Overall outlook for HB LEDs continues to be
highly positive, in spite of recent slowdown
due to Mobile Appliance saturation
Market will advance across a wide range of
applications, including newer ones such as
backlighting for LCD monitors and TVs, and
automobile headlamps
Illumination will be a major market driver
Projecting ~$1 billion in 2010
33

34. HB LED Market
Forecast
9,000
8,000
7,000 Other
6,000 Illumination
Revenue 5,000 Signals
($ Million) 4,000 Automotive
3,000 Signs/Displays
2,000 Mobile Appliances
1,000
0
2005 2006 2007 2008 2009 2010
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35. Thanks for your attention.
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