iLED iLED, October issue : 21
ISSUE N°1 OCT OBER 2011 ANAL YST CORNER LED equipment hits critical mass after Chinese explosion Massive investment is attracting vendors to offer dedicated LED packaging tools, while setting up the industry for aggressive competition, with both promising to make manufacturing processes more ef fi cient. he fi ght for share in the LED market is about to get much more vicious, with 40 or more extra Chinese chipmakers emerging through 2011 and into early 2012. But there is one consolation for those steeling themselves in preparation for the con fl ict: they are set to be better armed to withstand it. That's because the recent rapid growth in the LED market means t hat it has begun to attract attention from back-end tool vendors often focussed at more traditional semiconductor producers. As a result, rather than having to adapt their processes to equipment that already exists, LED producers will have more dedicated equipment offered to them. “Until very recently the LED industry had to rely on legacy equipment from the semiconductor industry that wasn't always fi tted to their need,” commented Yole Développement analyst Eric Virey. “But now the industry has reached critical mass, where equipment makers are really enticed into developing speci fi c tools for the LED industry.” They're being drawn by what Yole Développement estimates was a $625 million market for permanent bonding, die singulation, die attach, substrate separation and testing equipment in 2010. T LEDs are also attracting packaging toolmakers because they promise less drastically cyclic demand than silicon applications. As the essential tool needed to deposit LED semiconductor material, MOCVD equipment has rightly been a major focus for those following the industry's fortunes. The MOCVD market is already subject to cycles of rapid deployment and digestion, but now that is set to affect equipment used later in the process too. “We're going to start seeing those cycles, but because LED manufacturing is much less capital expenditure intensive I'm expecting them to be less deep and brutal than elsewhere in the semiconductor industry,” Virey said. “There, the price tag for a new fab is billions of dollars. In the LED industry you can start setting up a large fab for a couple of hundred million. There is much more fl exibility in managing the capex.” A major factor driving LED manufacturing equipment markets to their 2010 peak was the assistance China has provided its chipmakers. This includes subsidies of up to $1.5 million per MOCVD tool, around three quarters of the overall price tag. “In its fi ve year plan the Chinese government has de fi nitely decided to boost the upstream LED industry,” Virey explained. Before 2010, there Eric Virey, Senior Market and Technology Analyst, Yole Développement LED packaging equipment market (In M$) (LED Packaging Report, Yole Développement, 2011) 700 $ 625M 600 $ 598M $ 666M $ 624M “The Chinese plan is really the survival of the fi ttest,” says Eric Virey, Yole Développement $ 573M $ 491M $ 416M 500 400 300 200 100 0 2010 2011 2012 Permanent Bonding 2013 2014 Die Singulation 2015 Die Attach 2016 LED Testing Substrate separation i LED 21
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