GaN-on-silicon LEDs forecast to increase market share to 40% by 2020

The penetration of gallium nitride-on-silicon (GaN-on-Si) wafers into the light-emitting diode (LED) market is forecast to increase at a compound annual growth rate (CAGR) of 69 percent from 2013 to 2020, by which time they will account for 40 percent of all GaN LEDs manufactured, according to a new report from IHS Inc.

In 2013, 95 percent of GaN LEDs will be manufactured on sapphire wafers, while only 1 percent will be manufactured on silicon wafers. The growth in the manufacturing of GaN-on-Si LEDs between 2013 and 2020 will take market share from both sapphire and silicon carbide wafers.

The figure below shows the GaN-on-Si LED market share outlook in terms of revenue for the packaged LED market.

Screen Shot 2013-12-12 at 3.56.00 PM

“Manufacturing large ingots made from sapphire is difficult, whereas silicon wafers are available from 8 inches up to 12 inches and are generally cheaper and more abundant,” said Dkins Cho, senior analyst for lighting and LEDs at IHS. “There is a large pre-existing industry for silicon-based manufacturing that is leveraged to create economies of scale and reduce the cost of an LED.”

Repurposing manufacturing facilities to accommodate the shift toward GaN-on-Si LEDs is generally accepted to require minimal investment. Companies that previously manufactured CMOS semiconductors already own legacy 8-inch CMOS fabrication units that can be converted for LED production with a small modification. These companies already have in-house expertise and technology associated with silicon-based processes.

“Many of the CMOS semiconductor manufacturers already have excellent inspection tools, unlike traditional LED companies,” Cho said. “This could help increase their process yield through in-situ monitoring. However, it is unlikely the repurposing will happen overnight; instead we forecast a shift during the coming years.”


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2 thoughts on “GaN-on-silicon LEDs forecast to increase market share to 40% by 2020

  1. Tom Morrow

    Why this probably won’t happen:
    1. Significant price reduction in sapphire wafers and continued investment in SiC production by Cree
    2. LED die have dropped dramatically in price to the extent that the die or wafer is no longer the critical cost component; its the package
    3. Significant investment in 6″ sapphire and SiC LED production infrastructure by industry leaders
    4. No significant market success by any GaN on Si products on the market today
    5. Strong efforts to reduce suppliers and parts in the SSL supply chain. The costs are in large bill of materials, not on the individual die.
    6. Continued strength of vertical integrated SSL players with captive LED manufacturing; reduced attractiveness of the LED market due to revised market grwoth expectations
    7. Continued penetration of mid-power LEDs in traditionally high-power LED applications
    8. Growing technology investments in sapphire and SiC wafer inspection and production
    9. No demonstrated significant cost advantage of GaN on Si over sapphire and SiC, beyond the potential of partially amortized production infrastructure
    Now, this could all change if Apple adopts sapphire for the iPhone faceplate (consuming all the capacity), or a major acquisition occurs with guaranteed supply arrangements, but the economics have not demonstrated, as yet, the expectation of rapid penetration for new GaN on Si products.

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