The mid-power LED lighting trend: Q&A with Philips Lumileds CEO
Julian Ho, Taipei; Adam Hwang, DIGITIMES [Thursday 12 September 2013]
While mid-power LED chips account for only a small proportion of LED lighting currently, the proportion will grow fast over the next few years to reach about 50%, Philips Lumileds Lighting CEO Pirre-Yves Lesaicherre said during a Digitimes interview.
Q: What is the trend of new LED lighting products?
A: LED lighting needs to be controllable in terms of lighting conditions such as color and color rendering. For example, LED street lamps can be digitally adjustable in brightness and color when traffic is much less at midnight.
Q: What are your viewpoints of the global LED lighting market?
A: The global LED lighting market is growing but products vary among regions. LED light bulbs and outdoor LED lighting products dominate the China and North America markets, whereas LED lighting is mostly for indoor office and residential use in the Japan market. The US, China and Japan are LED lighting markets with relatively large demand and growth potential. Use of outdoor LED lighting is just beginning in the Japan market and there is large room for growth for indoor LED lighting in the China and US markets. Governments play an important role in boosting LED lighting; for example, procurements of LED street lamps in the US, China and Taiwan are guided by governments.
Q: As global production capacity is in excess, how do first-tier LED makers cope with competition from China-, Taiwan- and South Korea-based fellow makers?
A: Excess capacity is mostly a concern for mid-power LED chips used for backlighting; the capacity for high-power LED chips is not in excess. Currently, high-power and mid-power LED chips dominate LED lighting and LCD TV backlighting respectively. While most of Taiwan-, China- and South Korea-based makers focus on production of mid-power LED chips, Philips Lumileds, Cree, Osram and Nichia are four main global suppliers of high-power LED chips. High-power LED chips will become a major source of growth in global LED lighting demand in the future.
There are four major LED applicatons: backlighting, lighting, flash lights and automotive use. Excess capacity is mostly hitting the backlighting segment and a small portion of the lighting market. But in the next five years, mid-power LED lighting products will grow very fast. Although currently mid-power LEDS acocunt for only a small portion in the lighting segment, the proportion will grow to 50% in a few years time, and supply-demand balance is expected to be achieved.
Q: Does Philips Lumileds have plans to expand production capacity this year?
A: Philips Lumileds has been expanding its production capacity each year, with the capacity consisting of an LED chip factory in California, a wafer dicing plant in Singapore and two LED packaging factories in Malaysia. The company will further expand capacity in the future depending on market conditions.
Q: What are your opinions about the influence of Ultra HD LCD TVs on the development of TV LED backlighting?
A: Possible influence is shift from edge-type backlight to direct-type backlight because the latter is more efficient for use in large-size, such as 65-inch, Ultra HD TVs. The shift is also a trend for LED backlighting for 50-inch and above LCD TVs, with most backlight units made from mid-power LED chips. Faced with increasing competition in the LCD TV market, Philips Lumileds’ strategy is to develop mid-power LED chips based on the structure of high-power LED chips.
Q: To cope with increasing price competition, will Philips Lumileds procure more Taiwan-made LED devices or increase outsourced production by China-based makers?
A: Philips Lumileds will continue cooperation with makers in Asia, particularly Taiwan-based ones for LED chips. Philips Lumileds has partners in other Asian countries for LED packaging and procures LED chips from China-based makers.
Q: What is the 2013 target performance-cost ratio for LED lighting in your opinion?
A: The performance-cost ratio is expected to reach 1,000lm/US$ by the end of 2013 and 1,500lm/US$ in two years.
Q: What are Philips Lumileds’ target revenues and growth for 2013?
A: Philips Lumileds expects its 2013 revenues to grow by about 20% on year and growth in its sales volume to be higher than 20%.
Q: How does Philips Lumileds think of new technologies such as OLED lighting?
A: Philips Lighting has set up a team specifically responsible for OLED technology R&D. For application of OLED to lighting, I think OLED stands no chance of replacing LED in terms of cost, life and reliability of products over the next five years. But there are many interesting applications, such as decoration and mirror displays. OLED is worth investment and Philips Lighting will continue investment in developing the technology.
Q: How does Philips Lumileds think of Si-based LED?
A: Si (silicon)-based is not mainstream LED technology for the time being. Si-based LED technology was originally expected to be developed to use 8-inch substrates (sapphire wafers are 2-4 inches in size currently), but the 8-inch process has proved to be too expensive. Therefore, Philips Lumileds will not develop Si-based LED for the time being. While Taiwan Semiconductor Manufacturing Company (TSMC), Toshiba and a few Europe-based companies had developed Si-based LED, the technology is unlikely to become mainstream LED technology in five years.
Q: What are Philips Lumileds’ goals of developing LED lighting with high luminous efficiency and progress?
A: Some of competitors claim that their LED lighting products feature luminous efficiency of 180lm/W, but this may be reached in laboratories rather than in actual use. Many China-, Taiwan- and South Korea-based makers have sample products with high luminous efficiency, but their volume production may not attain the efficiency level. Philips Lumileds has maintained a leading market status in high-power LED lighting and will cooperate with Taiwan-based makers for mid-power LED lighting.