Traditional phosphors on the verge of commoditization due to expected strong push from China after YAG patents fall into public domain. But Quantum Dots are finally ready for prime time.
Strong price pressure stalls revenue growth and pressures margins but masks a more complex picture
While volumes are expected to more than double between 2015 and 2020, LED Phosphor prices have declined dramatically, leading to a flat revenue outlook. Low technology barriers of entrance on the most mature compositions have prompted companies to procure turnkey manufacturing equipment and enter the market. With little to no quality control and R&D expenses, some have achieved low cost comparable to that of the tri-phosphors used in fluorescent lamps. In a bid to capture market shares, they triggered an intense price war. With major YAG IP expiring from 2017, leading domestic vendors such as Yuji, Grirem, YT Shield, Illuma or Sunfor will finally access overseas markets, further increasing YAG commoditization. Phosphor makers are therefore shifting their efforts toward higher added value materials such as nitrides, which, while price have also decreased significantly during the period, have maintained better margins.