growth, rising 67 percent and now accounting for 79 percent of the LED market. LED backlighting for LCD television screens is now the leading market for LEDs, accounting for 27 percent of the inorganic LED sales, and is the fastest growing LED market today. Total revenues from sales of backlighting rose 84 percent in 2010 and accounted for 70 percent of inorganic LED sales (Young, 2011). Lighting, automotive, and signage applications of LEDs enjoyed a greater than 20 percent growth in the past year to slightly less than $2 billion (Young, 2011; Bhandarkar, 2011). IMS Research estimates that the North American lighting market has close to 4 billion incandescent lamps, 1.6 billion CFLs,3 1.65 billion fluorescent lamps, 200 million HID lamps, and just over 500 million halogen lamps (Young, 2011). McKinsey (2011) studied the global market for lighting in all applications and found that in 2010 LEDs for general illumination captured 7 percent (roughly €3 billion) of the market for new installations and 5 percent (€0.3 billion) of replacements.

U.S. participation in SSL research and development (R&D), manufacturing, and sales is currently well behind other developed countries. Japan is a leader in the LED industry in production and in public funding for R&D. Suppliers such as Nichia, Toyoda Gosei, Sharp, Rohm, Panasonic, Toshiba, and Citizen reside in Japan. More than 20 national universities in Japan have strong R&D efforts, which surpass the number in the United States. Currently, LED lighting is being subsidized by the Japanese government in order to reduce electricity use, in part in response to the devastation to the country’s electricity supply (25 percent reduction) caused by the Sendai earthquake and tsunami of 2011. LED lighting sales in Japan are estimated to top $1 billion in 2011, making Japan the largest market for LED lighting products. The LED adoption rate for new lamp purchases has already reached 40 percent and is projected to exceed 50 percent in Japan by 2012.

In June 2011, a new national energy-saving program was launched by the South Korean government aimed at achieving a 100 percent conversion rate to LED lighting in buildings owned by the South Korean government, as well as a 60 percent penetration of all lighting applications nationwide by 2020. To support this initiative, the Korean government will provide $185 million in funding support in 2012 and 2013 for LED point-of-purchase rebates. Samsung, LG, and Seoul Semiconductor are crucial players in helping reach these goals. These companies already offer a broad range of LED products for the domestic market. Samsung announced a 60 watt (W) equivalent LED lamp at less than $20 in 2011. Seoul Semiconductor was the fourth largest LED manufacturer in 2010 (Bhandarkar, 2011). China is currently a net importer of LED lighting for notebook backlights and automobile headlights. However, China intends to be a major producer of LEDs by 2015, and large capital investments by LED makers are now being heavily subsidized by the Chinese government (Young, 2011). Until July 2011, metal organic chemical vapor deposition (MOCVD) equipment was subsidized 50 percent by the Chinese government. More than 200 MOCVD systems were purchased under this subsidization program. However, it is now being discontinued until further demand for LED lighting is demonstrated. Motivated by the potential for large energy savings using SSL, LEDs are a targeted technology in China’s 5-year plan. Started in 2009, the plan is focused on the development of a sustainable LED industry. The Chinese central government’s objective is to consolidate the industry with five or six major players, all of which would be able to compete globally with the intention of becoming low-cost manufacturers by 2015; with China being the largest consumer of LEDs with a market reaching $74 billion by that same year. China has announced its intent to phase out incandescent lamps by 2016 starting with those over 100 watts in October 2012 (Reuters, 2011).

Mobile OLED displays are now being manufactured almost exclusively in Korea and the Far East for handheld electronic device applications such as smart phones. It is expected that display manufacturers in Japan, Korea, and China will move to larger displays, where OLEDs are very attractive alternatives to liquid crystal displays (LCDs). Although displays are a highly commoditized product, their relative price elasticity compared to general lighting makes displays the ideal first application for OLEDs. Larger companies like GE, Philips, Osram Sylvania, and Samsung are all developing OLED technology for lighting applications, with Moser-Baer, located in New York, being the first commercial entry into OLED lighting manufacturing.

Several large U.S.-based corporations and numerous medium-size lighting and start-up companies participate in the SSL market. These companies hold world-class positions and employ tens of thousands of people in the United States. In the LED chip market, Cree Inc., and Philips-Lumiled are among the top 10, based on worldwide revenue. Both companies still manufacture in the United States and produce revenues of the order of $1 billion annually. Some of the world’s leading LED manufacturing equipment suppliers reside in the United States, with VEECO and Applied Materials being leading MOCVD reactor suppliers. Numerous substrate equipment suppliers and fabrication and test companies play a critical role in the SSL supply chain. The LED lamp and luminaire markets have numerous medium and small companies providing LED lamps and luminaries.

OLEDs have also been the subject of a growing manufacturing base over the past decade in the commercialization of color mobile displays. Mobile display production in 2011 was estimated at approximately 3 million displays per month for Samsung alone (Wall Street Journal Asia, 2011). Leveraging this early manufacturing experience, several

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3 The term CFL applies to not only the twisted fluorescent replacement for incandescent A-lamps, but also “folded” fluorescent lamps, e.g., GE’s Biax lamp. These do not share the problems associated with the twisted CFL.



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