January 18, 2012 — Consumers are adopting LED-backlit LCD TVs more slowly than expected, prompting TV makers to design lower-power, lower-cost LED backlights using fewer LEDs per TV set, shows the NPD DisplaySearch Quarterly LED Backlight Report. Fewer LEDs means lower brightness, thicker designs, and a hit to picture quality.
These new LED backlights use about half as many LEDs, and replace light guide plates, optical film, and other materials with lower cost diffuser plates and lens structures on the LEDs. TV makers have been adopting 2-chip LED packages to reduce the number of packages and to reduce optical film use. The number of LED packages used per set with direct backlights is expected to be less than that of sets with edge backlights.
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| Figure 1. Backlight cost forecasts for 32” HD 60 Hz LCD TV Panel. Source: NPD DisplaySearch Quarterly LED & CCFL Backlight Cost Report. |
The reduction in LEDs and other materials lowers power consumption, but requires a thicker profile. Brightness is lowered to 300 nits as opposed to 450 nits for edge-lit LED or CCFL, and lack of dimming reduces the contrast ratio and image quality.
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| Figure 2. Forecast of LED packages per TV set. Source: NPD DisplaySearch Quarterly LED Backlight Report. |
"LED penetration in LCD TV was 7 points lower than our forecast a year ago, mainly due to high LED premiums. The premium for a LED backlight in a 32" LCD TV was 42% in Q4 2011, although it had been expected to fall to 27%," said Yoshio Tamura, SVP, NPD DisplaySearch.
Lowering power consumption and price brings LED-backlit TVs into the cost-competitive range with CCFL-backlit LCD TVs, and even CRT TVs. The materials cost for direct LED backlights comes closer to that of CCFL backlights. NPD DisplaySearch estimates that for 32” LCD TVs, direct LED backlights cost 1.3-1.4x CCFL backlights, as opposed to edge-lit LED backlights (2x+ CCFL cost). For 40” LCD TVs, the savings could be even greater.
LED backlight penetration is likely to continue to ramp, added Barclays Capital, reporting on what the firm saw at 2012 International CES in Las Vegas this month. Direct-lit TVs are likely to remain in the premium niche of the market, Barclays warns, adding that "LED industry overcapacity is unlikely to stabilize in 2012, suggesting another year of 25+% Y/Y ASP declines."
Companies at CES:
Samsung’s non-organic LED TV line-up for 2012 highlights strong focus on LED-lit models, suggesting potential upside to our LED TV penetration forecast of ~68% in 2012, with management indicating the LED TVs are likely to be "mainstream" for the industry in 2013, Barclays reports.
Sony’s newly introduced Crystal LED display technology has the potential to meaningfully expand LED chip units per screen (~6M tiny LEDs for a 55" screen vs. 100-200 for an edge-lit model) but the technology remains in prototype phase. New display technologies like Sony’s CrystalLED display have the longer-term potential to boost unit demand, Barclays predicts.
The NPD DisplaySearch Quarterly LED Backlight Report is a quarterly update of the entire value chain for large-sized TFT LCD backlight units: technological developments, industry news, price trends, supply/demand, cost structures and more. For more information on these reports, please contact Charles Camaroto at 1.888.436.7673 or 1.516.625.2452, or [email protected] or contact your regional DisplaySearch office in China, Japan, Korea or Taiwan. NPD DisplaySearch is a global market research and consulting firm specializing in the display supply chain, as well as the emerging photovoltaic/solar cell industries. Visit http://www.displaysearch.com/.