LED Front End Equipment Market 2014 Report by Yole Developpement


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A comprehensive survey of LED Front-End equipment business, covering main trends and industry per process step, and market metrics.


Driven by the fanfare over (and overestimation of) the LCD display market, the LED Front-End equipment market experienced an unprecedented investment cycle in 2010-2011. The market surge was driven mostly by MOCVD reactor shipments to new Chinese entrants, who benefited from the generous subsidies of the Chinese central and local governments in a bid to stimulate domestic chip production.

Following a 18-24 month digestion period, the market is now slowly recovering and will experience another investment cycle in 2014-2016 driven by demand for general lighting applications.
However, this 2nd cycle will be limited in value due to:
• Improvement in equipment throughput and yields
• Increased competition
• Potential consolidation of the industry
Indeed, LED manufacturers initially relied on old semiconductor systems designed for other applications. Now that the industry has reached a critical size, several LED-dedicated equipment (that take into account the specificities of LED manufacturing) has been commercialized.

As a result, the equipment market will peak at nearly $580M in 2015 with MOCVD reactors representing more than 80% of the business: the bulk of these reactors are still being shipped to Chinese manufacturers or Taiwanese players transitioning to 4” diameters. Lithography, plasma etching, PECVD and PVD equipment will follow a similar trend.

This report presents major equipment used in LED Front-End Manufacturing. It describes market size and volume (2009-2020), trends per process steps (performance, ASP, emerging technologies…), key suppliers, and much more!

More information on that report at http://www.i-micronews.com/reports/LED-Front-End-Equipment-Market/14/429/

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LED Front End Equipment Market 2014 Report by Yole Developpement

  1. 1. Copyrights © Yole Développement SA. All rights reserved. © 2014 1 75 cours Emile Zola, F-69001 Lyon-Villeurbanne, France Tel : +33 472 83 01 80 - Fax : +33 472 83 01 83 Web: http://www.yole.fr LED FRONT-END EQUIPMENT MARKET A Comprehensive Survey of LED Front-End Equipment Business, Covering Main Trends, Industry / Market Structures and Market Metrics SAMPLE VERSION
  2. 2. © 2014 2 Copyrights © Yole Développement SA. All rights reserved. About the Author of the Report Pars MUKISH - Senior Analyst Pars MUKISH holds a Master of Materials Science & Polymers and a Master of Innovation & Technology Management (EM Lyon - France). He works at Yole Développement as a Senior Market and Technology Analyst in the fields of LED, Lighting Technologies, Compound Semiconductors and OLED to carry out technical, economic and marketing analysis. Previously, he has worked as Marketing and Techno-Economic Analyst for several years at the CEA. Pars MUKISH is also author / co-author of the following reports: • LED Packaging • Status of the LED Industry • LED in Road and Street Lighting • OLED for Lighting • UV LED Technology and Application Trends
  3. 3. © 2014 3 Copyrights © Yole Développement SA. All rights reserved. Objectives of the Report • To better understand LED Front End manufacturing technological trends. • To better understand equipment industry for each process step. • To better understand who is doing what, and specificities of each market. • To provide market metrics both at LED and material / equipment levels.
  4. 4. © 2014 4 Copyrights © Yole Développement SA. All rights reserved. Company Index Advanced System Technology, Advantools Semiconductor, Aixtron, Akzo Nobel HPMO, Albemarle, Altatech, AMEC, AMO GMBH, Annealsys, ASM Pacific Technology, ASML, AST, Aurora Sapphire, Aurotek, Beta Squared, Bridgelux, Cambridge Chemicals, Canon, Cascade Microtech, CETC, Chemtura and UP Chemicals, Chroma, Corial, Crystal Applied Technology Inc., Crystaland, Crystalwise, C-Sun, DK Aztec, Dow Chemical, Elmos, Eplustek, Eulitha, Evatec, EVG, First Nano, Fulintec, GR-Litho, GTAT, Guangdon Real Faith Semiconductor Equipment, Hansol Technics, Iljin display, InVacuo, Japan Science Enginneering (Dai Nippon Kaken), JT Corporation, KLA Tencor, Lattice Power, Leybold, LG, Lumileds, Maxis, MC-Lithography, Molecular Imprints, Monocrystal, Namiki, Nanonex, NATA, Neutronix-Quintel, Nikkon, NMC, North Microelectronics, Novellus, Nuflare, Obducat, Oerlikon, Orbotech, Osram, Oxford Instruments, Panasonic, Plasma-Therm, Plessey Semiconducors, Plustek, Procrystal, Qingdao Jason Electronic, QMC, Rubicon, Rudolph Technologies, SAFC Hitech, Samco, Samsung, Sapphire Technology, Screen, Seoul Semiconductor, Sharp, Sheng Optical Equipment, Silian Sapphire Corporation, Sky Technology Development, SmaTeK, SNTEK, Soraa, SPTS, StarArc, Structured Materials Industries, SUSS Microtec, SVTA, Tainics, Tamarack Scientific, Taiyo Nippon Sanso, Technology & Science Enabler, TEL NEXX, Temescal, Tera Xtal Technology, Ultratech, ULVAC, Ushio, USI Optronics Corporation, Valence Process Equipment, Veeco, Yongsheng Semiconductor Equipment (…).
  5. 5. © 2014 5 Copyrights © Yole Développement SA. All rights reserved. LED Industry is Entering its 3rd Growth Cycle 1st Cycle • Growth of the LED industry came initially from the small LCD displays and keypad backlighting for cell phones. 2nd Cycle • And was driven forward by the LCD display application. – LED TV was expected to be the LED industry driver for 2011, but the reality was quite different due to: lower sales of LCD TVs, lower than expected adoption rate of LED, and lower number of LEDs per TV set. – This situation, mixed with the entry of several new players (mostly from Asia), created a climate of overcapacity, price pressure, and strong competition. As a consequence, packaged LED volumes were about 30% lower than expected and revenue shrank due to strong ASP pressure. 3rd Cycle • In 2012, most companies have started to move to the new “El Dorado” of the LED business: General Lighting, which represents the next killer application. In 2013, LED technology has really spread beyond general lighting with the LED penetration rate > 4% in some applications - such as residential lighting, commercial lighting, and road and street lighting. However, to enable massive adoption of the technology, LED-products still require a cost decrease.
  6. 6. © 2014 6 Copyrights © Yole Développement SA. All rights reserved. General Lighting Drivers for Adoption - Upfront Cost Currently, upfront cost of LED-based lighting is still too high to fully compete with incumbent technologies. → Real need to reduce the $/lumen! 1. Depending on geographical region and availability of subsidies/rebates- Price listed is worldwide average Incandescent < $1 Fluorescent ~ $3-$5 LED ~ $10 - $501 Comparison of Average Selling Price of Different Lamp Technologies All sources are ~ 800 lumens, warm, white and tier-1 brand only
  7. 7. © 2014 7 Copyrights © Yole Développement SA. All rights reserved. Cost Structure of Lighting Products Analysis • LED packages represents 25% to 45% off the total cost of LED-based lighting products (lamp, luminaire, tube…) depending on the application, the performance required, the type of product (…). – In our 2011 analysis, LED packages represented 30% to 60% of the total cost of LED-based lighting products. – This decrease is due to reduction of LED ASP, increase of LED performance (lm/W), and wider use of middle power LEDs in General Lighting applications (mostly for residential and commercial applications). Packaged LED still represents a large opportunity for cost reduction!
  8. 8. © 2014 8 Copyrights © Yole Développement SA. All rights reserved. Front End Cost Aspects 1W Packaged LED Cost Analysis • Front-end manufacturing represents 48% of the cost of the 1W packaged LED analyzed in this example. • At 33% of the total Front-End cost, epitaxial layers (grown by MOCVD) represents the single largest cost reduction opportunity. • However, substrates (in this case sapphire + a carrier wafer on which the epiwafer is subsequently bonded to) also represent a significant fraction (25%).
  9. 9. © 2014 9 Copyrights © Yole Développement SA. All rights reserved. Front-End Manufacturing Process Flow Example - MESA Structure (1/2) • Multiple variations are possible for the structure, the contact and pad materials, thicknesses (…). Actual process flow can also vary based on manufacturer’s engineering preferences, available equipment (….). • The next slide illustrates the process flow for the generic MESA structure presented below: 1. Not to scale Transversal view1 3D view (passivation layer not shown)1 n-GaN (3-5 µm) p-GaN (0.1-0.5 µm) MQW (15-80 nm) Passivation (SiO2 : 300 nm) Anode Pad (Ti:30 nm / AuSn: 2µm) Transparent contact (ITO: 245 nm) Cathode Pad (Ti:100nm / Au:2µm) Sapphire Substrate (80 µm after back thinning) n-GaN Active layers (MQW) p- GaN Contact layer
  10. 10. © 2014 10 Copyrights © Yole Développement SA. All rights reserved. Technology Highlights LED Substrates - GaN and Si (1/2) • GaN-on-Si LEDs aims at improving solid-state lighting Cost of Ownership (COO) by reducing the component manufacturing cost. – The success of GaN-on-Si LEDs will depend on development of associated LEDs performance (which should at least be equal to GaN-on-Sapphire LEDs) and development of manufacturing techniques (allowing to capitalize on depreciated CMOS fab). • GaN-on-GaN LEDs purports to reduce COO by improving the quantity of light per die area, and therefore allow cost reduction at the system level through reduction of the number of packages. – The success of GaN-on-GaN LEDs will depend on the availability of 2” and 4” GaN substrates in large volumes and at a lower cost than currently available. COST = $ LUMEN Manufacturing Efficiency • Higher equipment throughput and yields • Economy of scale LED Performance • Higher efficiency (lumen/W) • More light per chip (driving current) GaN-on-Si LEDs → Reduce component cost GaN-on-GaN LEDs → Improve performance by reducing the number of packages per System
  11. 11. © 2014 11 Copyrights © Yole Développement SA. All rights reserved. GaN-on-Si LEDs Performance and Commercial Status - Overview (1/2) In development (no release date) Dec. 2013 Company F XX lm/W Jul. 2013 Plessey LED PLW111010 36 lm/W30 60 120 150 180 0 Company C XX lm/w Apr. 2013 • Low and Middle power package, cold white (5000-5500k). • Best performance based on company claims. Company A XX lm/W Everlight L62-217D 150 lm/W Osram Lab result 104lm/W Lumileds Luxeon 3535 2D 150 lm/W Toshiba TL1F2 XX lm/W Sapphire Silicon Company B XX lm/w Company E XX lm/W 90 Cree Lab > 200 lm/w Company D XX lm/W *Available as die. Lm/w of white package LED is extrapolated March 2014
  12. 12. © 2014 12 Copyrights © Yole Développement SA. All rights reserved. GaN-on-GaN LEDs Status Many companies are investigating GaN-on-GaN LEDs (Osram, Samsung, TSMC, Lumileds…). Only 3 have entered into real production: Panasonic, Soraa and Seoul Semiconductor. Panasonic Soraa Seoul Semiconductor • GaN-on-GaN LEDs since 2007. • Main applications: cell phone flash and automotive lighting. • MR16 LED bulbs based on in- house manufactured GaN on GaN LED available • “n-Pola” LED based actually based on c-plane GaN substrates for now; • Mass production to have started in April 2013. • Mitsubishi / Verbatim MR16.
  13. 13. © 2014 13 Copyrights © Yole Développement SA. All rights reserved. Toward Larger Diameter Wafers Incentive - Focus on Manufacturing Cost (3/3) • This indicates that the transition to 6” can be beneficial for LED makers with strong experience and “world class” manufacturing practices. Source: Philips Lumileds (June 2013) Last 2 Quarters of 3” Manufacturing (mix) 150mm Manufacturing Only
  14. 14. © 2014 14 Copyrights © Yole Développement SA. All rights reserved. LED MOCVD Reactor Industry Strategy of New Entrants (2/3) Focus on heating system: • Different heating system are developed by new entrants. Companies such as ADP Eng. Or Top Eng. Are working on resistance heater whereas Jusung Eng. or Wonik focus on induction heater. Kanthal ‘FeCrAl) heater are also developed -e.g.: Kokusai Electric Korea). • The objective is to have better temperature ramping (through low temperature mass for example) and so decrease MQW growth cycle time. In 2012 and 2013, MOCVD price war was initiated by leaders to increase barrier entry. As a result, new entrants are working on new reactor design to attract customers. Parameter A  XX Parameter B  XX Automation (…) Reactor Design Parameters Heating system  To decrease growth time
  15. 15. © 2014 15 Copyrights © Yole Développement SA. All rights reserved. LED MOCVD Reactor Market Revenue Forecast (2009-2020) - GaN vs. InGaAlP March 2014 SAMPLE - DATA ON THE REPORT
  16. 16. © 2014 16 Copyrights © Yole Développement SA. All rights reserved. Other LED Front End Equipment Market Size March 2014 SAMPLE - DATA ON THE REPORT
  17. 17. © 2014 17 Copyrights © Yole Développement SA. All rights reserved. TMG ASP - Overview • TMG price increased in 2010 and 2011 due to the rapidly growing LED market which has led to a shortage of TMG. • In 2013, ASP is much more lower: $XX to $XX per gram for large orders (100+ kg). • And ASP decrease is likely to continue with the growth of production capacity. TMG ASP has strongly decreased since 2010 due to large overcapacities. It is currently in the range of $XXto $XX per gram. 2010 2011 / 2012 2013 $2.5 to $4 $XX to $XX ASP($/g) 3 2 1 5 4
  18. 18. © 2014 18 Copyrights © Yole Développement SA. All rights reserved. Lithography for LED Chip Manufacturing Equipment Suppliers - LED Dedicated Equipment Main suppliers of dedicated LED lithography systems are presented below: Company Contact / Proximity Stepper Full Field Comments COMPANY A X • Also own “Index Technology” (a JV with Ball Semiconductor for the development of maskless systems) COMPANY B X • Collaboration with XX on Displacement Talbot Lithography (DTL) COMPANY C X • “NXQ8006 Sapphire” model for LED manufacturing X X • XX COMPANY D X • First LED-dedicated system “Sapphire 100” introduced in late 2009 X • XX
  19. 19. © 2014 19 Copyrights © Yole Développement SA. All rights reserved. Physical Vapor Deposition for TCLs and Metals Synthesis (2/3) • Intra-batch homogeneity and batch-to-batch repeatability are critical, and often require to be within +/- 3%. • Due to the low thickness of most of the layers, deposition time is fairly quick. Cycle times are therefore driven by pumping, heating, cooling and handling (loading / unloading). This creates a strong incentive for low temperature processes as well as for higher automation in loading and transferring wafers. • Pumping time can vary from 15 to 30 minutes depending on chamber size and pumping equipment. Temperature ramp- up depends on process. • Loading time can be reduced by using multiple sets of wafer carriers that are preloaded outside the machine and swapped. • Misc. includes rough reactor cleaning, changing deposition monitor quartz, replenishing the source material crucible (…). T0 Deposition 10 min 40 min 46 min 60 min 70 min 80 min Example for a 250 nm metal layer deposition. Reactor Loading Pumping + Temperature ramp up Cooling / Venting Unloading Misc.
  20. 20. Copyrights © Yole Développement SA. All rights reserved. © 2014 20 75 cours Emile Zola, F-69001 Lyon-Villeurbanne, France Tel : +33 472 83 01 80 - Fax : +33 472 83 01 83 Web: http://www.yole.fr Yole Développement and LED Activity
  21. 21. © 2014 21 Copyrights © Yole Développement SA. All rights reserved. Yole Développement Field of Research Activity • Yole Développement is a market research and strategy consulting company founded in 1998. • We are involved in the following areas: • Our research is performed by in-house personnel conducting open-ended discussions based on interviews. – 30 full time analysts with technical and marketing degrees. – Primary research including over 3,500 interviews per year. Photovoltaic Microfluidic & Medical Technologies MEMS & Image Sensors Wafer & Substrates Power Electronics LED, OLED and Laser Diode Advanced Packaging
  22. 22. © 2014 22 Copyrights © Yole Développement SA. All rights reserved. Yole Développement 4 Business Models Custom Analysis: • Largest part of Yole Développement’s activities. • Covered by NDA agreement. • A few days to several months of work, depending on objectives. Published Reports: • An average of 40 reports published every year. • Available individually or through annual subscription program. • Market and technology reports, patent analysis, reverse engineering / costing reports and reverse costing tools. i-Micronews Media: • Magazines and webcasts on 3D, MEMS, Compound Semiconductors, Power electronics, LED and imaging. • Communication services providing access to our network including +45,000 subscribers to be visible and diffuse information on your company and products. Yole Finance Services: • M&A (buying and selling) / Due diligence / Fundraising / Technology brokerage. Custom Analysis Breadth of the Analysis DepthoftheAnalysis Standard Reports Workshops Q&A Services Research products - Content comparison
  23. 23. © 2014 23 Copyrights © Yole Développement SA. All rights reserved. LED Activity Yole is Active All Over the LED Value Chain We are active all over the value chain! And we interview industrial / R&D players from each level! Substrate Front-end Level 0 - Epitaxy • Nucleation layer • N-type layer • Active layers (MQW) • P-type layer SiC / Sapphire / Silicon / Bulk GaN / Composite substrate LED epi-wafer Mesa LED structure Flip Chip LED structure Vertical LED structure LED dies-on-waferLED dies Back-End level 1 - Packaging • Die Attach & Interconnections • Phosphors • Encapsulation & optics • Testing & Binning Packaged LEDs Front-end Level 1 - Device Making • Inspection • Masking / Lithography • Etching • Metallization / Contacts / Mirrors Back-End Level 0 - Packaging • Substrate separation & Bonding • Die singulation • Testing & Binning LED systems and applications
  24. 24. © 2014 24 Copyrights © Yole Développement SA. All rights reserved. LED Activity About Yole’s LED Analyst Team Dr. Philippe ROUSSEL - Business Unit Manager Philippe ROUSSEL holds a Ph-D in Integrated Electronics Systems from the National Institute of Applied Sciences of Lyon (INSA - France). He joined Yole Développement in 1998 and is Business Unit Manager of the Compound Semiconductors, Photovoltaic, LED and Power Electronics department. Dr. Eric VIREY - Senior Analyst Eric VIREY holds a Ph-D in Optoelectronics from the National Polytechnic Institute of Grenoble (INPG - France). In the last 12 years, he has held various R&D, engineering, manufacturing and marketing positions with Saint-Gobain. Most recently, he was Market Manager at Saint-Gobain Crystals, in charge of Sapphire and Optoelectronic products. Pars MUKISH - Senior Analyst Pars MUKISH holds a master degree in Materials Science & Polymers and a master degree in Innovation & Technology Management (EM Lyon - France). He works at Yole Développement as Market and Technology Analyst in the fields of LED and Lighting Technologies to carry out technical, economic and marketing analysis. Previously, he has worked as Marketing and Techno-Economic Analyst for several years at the CEA.
  25. 25. ORDER FORM LED Front-End Equipment Market SHIPPING CONTACT First Name: Email: Last Name: Phone: PAYMENT BY CREDIT CARD Visa Mastercard Amex Name of the Card Holder: Credit Card Number: Card Verification Value (3 digits except AMEX: 4 digits): Expiration date: BY BANK TRANSFER BANK INFO: HSBC, 1 place de la Bourse, F-69002 Lyon, France, Bank code: 30056, Branch code : 00170 Account No: 0170 200 1565  87, SWIFT or BIC code: CCFRFRPP, IBAN: FR76 3005 6001 7001 7020 0156 587 RETURN ORDER BY • FAX: +33 (0)472 83 01 83 • MAIL: YOLE DÉVELOPPEMENT, Le Quartz, 75 Cours Emile Zola, 69100 Villeurbanne/Lyon - France SALES CONTACTS • North America: Michael McLaughlin - mclaughlin@yole.fr • Asia: Takashi Onozawa - onozawa@yole.fr • Europe RoW: Jean-Christophe Eloy - eloy@yole.fr • Korea: Hailey Yang - yang@yole.fr • General: info@yole.fr (1) Our Terms and Conditions of Sale are available at www.yole.fr/Terms_and_Conditions_of_Sale.aspx The present document is valid 24 months after its publishing date: April 7st , 2014 / ABOUT YOLE DEVELOPPEMENT BILL TO Name (Mr/Ms/Dr/Pr): Job Title: Company: Address: City: State: Postcode/Zip: Country*: *VAT ID Number for EU members: Tel: Email: Date: PRODUCT ORDER Please enter my order for above named report : One user license*: Euro 3,990 Multi user license: Euro 5,990 For price in dollars, please use the day’s exchange rate. All reports are delivered electronically at payment reception. For French customers, add 20% for VAT I hereby accept Yole Développement’s Terms and Conditions of Sale(1) Signature: *One user license means only one person at the company can use the report. Please be aware that our publication will be watermarked on each page with the name of the recipient and of the organization (the name mentioned on the PO). This watermark will also mention that the report sharing is not allowed. Founded in 1998, Yole Développement has grown to become a group of companies providing marketing, technology and strategy consulting, media in addition to corporate finance services. With a strong focus on emerging applications using silicon and/or micro manufacturing (technology or process), Yole Développement group has expanded to include more than 50 associates worldwide covering MEMS, Compound Semiconductors, LED, Image Sensors, Optoelectronics, Microfluidics Medical, Photovoltaics, Advanced Packaging, Manufacturing, Nanomaterials and Power Electronics. The group supports industrial companies, investors and RD organizations worldwide to help them understand markets and follow technology trends to develop their business. MEDIA EVENTS • i-Micronews.com, online disruptive technologies website • @Micronews, weekly e-newsletter • Technology Magazines dedicated to MEMS, Advanced Packaging, LED and Power Electronics • Communication webcasts services • Events: Yole Seminars, Market Briefings… More information on www.i-micronews.com CONTACTS For more information about : • Consulting Services: Jean-Christophe Eloy (eloy@yole.fr) • Financial Services: Géraldine Andrieux-Gustin (andrieux@yole.fr) • Report Business: David Jourdan (jourdan@yole.fr) • Corporate Communication: Sandrine Leroy (leroy@yole.fr) CONSULTING • Market data research, marketing analysis • Technology analysis • Reverse engineering costing services • Strategy consulting • Patent analysis More information on www.yole.fr REPORTS • Collection of technology market reports • Manufacturing cost simulation tools • Component reverse engineering costing analysis • Patent investigation More information on www.i-micronews.com/reports FINANCIAL SERVICES • Mergers Acquisitions • Due diligence • Fundraising • Coaching of emerging companies • IP portfolio management optimization More information on www.yolefinance.com