Supply chain shortage is a tricky problem for LED

Since Samsung Electronics introduced the Edge-Lit LED (Light Emitting Diode) TV in 2009, LED TV solves the problems of high price and high specification in the past, with more reasonable price, thin design, power saving and environmental protection. Consciousness and other characteristics have attracted consumers. At the same time, this has led many TV brands, panel manufacturers and backlight suppliers to believe that LED TV has a bright future.

However, as everyone rushed into the market, many problems with the LED TV supply chain were exposed, especially when the technology was not fully mature, and many LED backlight solutions emerged, making the entire supply chain more complicated.


LED is a must for CCFL

Our research found that since 2004, it has been the first stage of the growth of flat-panel TVs in the world, the so-called flat-panel TV (liquid crystal and plasma) to replace the traditional CRT (CPT) TV stage. The increase in production capacity of LCD panels, the rapid evolution of technology, and the rapid reduction of materials and manufacturing costs are the main drivers of the rapid spread of flat-panel TVs.

In 2004, LCD (liquid crystal) TV shipments were less than 10 million units. In 2008, it has grown to 100 million units (more than traditional CPT TV), and reached 145 million units in 2009. CRT TV has been around for half a century, but it has been overtaken by LCD TVs in less than five years, showing the amazing explosive power of the panel industry. With the application of LED technology to panels, we believe that the second phase of global flat-panel TV growth will be the transition from cold cathode tube (CCFL) LCD TVs to LED-backlit LCD TVs. As for the third wave of growth, we believe that it is the popularity of 3D TV (3D TV), but currently 3D TV is still in the stage of early development and market exploration, and the growth momentum is far behind LED TV, under the condition that the software and hardware are not mature. Whether 3D TV can be fully popular remains to be seen.

In 2009, the global LED-backlit LCD TV shipments were 3.6 million units, which can be said to be the first year of LED TV. However, in terms of shipments, 145 million LCD TVs were sold worldwide last year, and LED-backlit TVs accounted for only 4%, and the penetration rate was quite low. However, in 2010, with the successive launch of LED products by various brands, LED backlight panel technology and mass production of terminal TVs are developing rapidly. It is expected that the penetration rate in 2010 will approach 30%. We believe that by 2012 LED backlight LCD TVs will surpass cold cathode backlight LCD TVs.


LED backlight technology is not perfect

From CCFL backlit LCD TVs to LED-backlit LCD TVs, both in terms of technology and market development are inevitable evolution. After all, consumers are increasingly demanding visuals, and manufacturers' technology research and development and production capacity are also constantly improving. LED backlighting has many advantages, but current LED-backlit LCD TV technology is not perfect.

From an advantageous point of view, LEDs have the following advantages.

First, thinning. The current LEDs are mainly Edge-Lit. In other words, the LEDs are mounted on the side of the backlight or the panel in a package and combined into a LightBar, thereby reducing the space required for backlighting. Lightweight and thin.

Second, energy saving. LEDs do not require a larger driving voltage and tube current than cold cathode tubes, and even direct-lit LED backlights that use more LEDs are more power efficient than CCFL backlights.

Third, the average selling price of the panel can be increased. For panel makers, TFTLCD is a capital-intensive, high-tech-intensive industry that faces the dilemma of falling average selling prices and falling prices when oversupply, so how to increase the added value of panels is critical. LED backlights have added value such as thinness, light weight, power saving, and compliance with environmental regulations, which allows panel makers to increase their average sales unit price and speed up investment recovery.

Fourth, product differentiation. For brand manufacturers, the competitive advantage of products is nothing more than the advantages of cost and differentiation. Cost competition is a race of blood flow, depending on assembly efficiency and assembly scale, it is easy to produce losses after a little backward, so we have seen many international TV brands have begun to reduce their own production plants, and outsource to larger scale, management More professional manufacturers (OEM/ODM). In the differentiated part, LED allows LCD TV brands to successfully shape the brand's image.

Of course, LED TVs also have some drawbacks.

First, its cost is still much higher than that of traditional CCFL backlights. This is due to the continuous development of technology and the continued expansion of production scale.

Second, the supply capacity of the LED backlight supply chain is not as mature as the traditional CCFL backlight, so it is easy to produce a phenomenon that the connection is not good and the delivery is not smooth.

Third, edge-lit LED backlights are less bright and uniform than traditional CCFL backlights, so technology developers must add many optical materials and components, which increases product design and supply chain complexity.

Fourth, the edge-lit LED backlight cannot fully exploit the advantages of LED point source light source dynamic control. Since the LED is a point light source, each of the LED dies mounted in the backlight panel can be individually turned on or off, so that it can adjust the brightness and darkness of the LED in the picture area with different brightness and darkness requirements on the screen, so that the dark The darker and brighter parts of the picture are brighter. The biggest advantage of this kind of light and dark dynamic control is to greatly increase the contrast of the panel. The direct-lit LED backlight technology achieves bright and dark dynamic control by evenly spreading the LEDs on the surface of the backlight. However, the LCD backlight of the edge-lit architecture cannot achieve bright and dark dynamic control.


Supply chain challenges

DisplaySearch research found that the current supply of LED TV backlights is not smooth, many new LED-backlit LCD TVs have been delayed, and panel manufacturers have even increased the price difference between LED and CCFL backlights. Since April 2010, major LED panel suppliers Samsung, LG Display, Sharp, AUO and New Chimei have requested to increase the price of LED-backlit LCD TV panels while maintaining or reducing the price of CCFL-backlit LCD TV panels. For now, panel buyers may not have any choices and can only accept higher LED panel spreads, as brands' aggressive shipment targets for LED models force them to get more LED-backlit LCD TV panels. Since April 2010, the price of 32-inch, 40-inch, 42-inch, 46-inch, 47-inch and 55-inch LED-backlit LCD TV panels has increased by an average of $5.

There are many reasons for the current LED backlight supply chain tension, one of which is because the TV brand is too aggressive for the LED backlight LCD TV shipment target in 2010, causing the supply chain to react less. Our supply chain research shows that the LED supply chain may take two to three months of lead time to catch up with the increase in demand. In addition, due to insufficient production experience, LED backlight production yield is not good, so polarizers, mirrors, optical films and light guides (LGPs) are also facing tension and shortage. However, we believe that the increase in LED backlight price difference will not be long-term, otherwise the price of soaring LED-backlit LCD TVs may hurt consumers' willingness to purchase LED products.

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