Monday, October 22, 2012

Local LED firms riding on innovation

High-brightness LED market to grow by 13.4% this year
BH Electronics workers working on LED prouctsBH Electronics workers working on LED proucts
GEORGE TOWN: Local light-emitting diode (LED) companies are riding on innovation to tap into the high-brightness (HB) LED segment, which is expected to grow at 13.4% this year.
Globetronics Technology Bhd has just released new HB LED modules in a single bin of white colour for the US market, using a special US technology, while Elsoft Research Bhd has come out with the next generation of LED radiation pattern test equipment.
BH Electronics Sdn Bhd, an electronics company with a 26-year old history in Penang, has also released a new range of LED tubes, lamps, and bulbs with cost-effective designs that can better compete in the global market.
Elsoft will ride on its new range of light-emitting diode testing equipment to overcome the mediocre performance of the group in the second quarter.
According to the Taipei-based Digitimes Research report, the global high-brightness LED industry this year will see the value of output rising to US$10.1bil (RM31.1bil).
However, the HB LED industry would not be able to return to the high levels of growth seen in 2010, as there was a huge drop in metal organic chemical vapour deposition (MOCVD) equipment, used for manufacturing LEDs, the report said.
Heng expects a very good financial year for the Globetronics groupHeng expects a very good financial year for the Globetronics group
In 2010, the LED industry grew an impressive 67% to US$10.2bil from US$6.1bil in 2009, according to a TechEye report.
Globetronics managing director Heng Huck Lee said that in order to compete in a challenging global economy, the group used a special US technology to produce HB LED modules.
“The technology we use converts violet light to a single bin of white light, compared to the conventional technology which can convert only blue light to different bins of white light that may have limited usage or are not suitable for the general lighting industry.
“If not all the bins of white light can be used, then there will be a high inventory of LED white lights in the general lighting market.
“This is why we are confident of performing well in the US general lighting market, which is worth US$4bil this year.
“We expect to see contribution from this new range of HB LED modules for the 2013 financial year,” he said.
Heng said the group expected a very good 2012 financial year, driven by the strong demand for HB LED modules of 100-200 lumens for a single module and high-accuracy timing sensors for the US and Asian market.
Elsoft chief executive officer C.E. Tan said the company had released in the second quarter its next generation of LED radiation test equipment with innovative features used for measuring the spatial radiation of 3D light in a high brightness LED module.
“The market for such equipment is growing especially for large display applications and in the automobile's back lighting,” he added.
Elsoft's other new LED test equipment are for testing 110/240 high voltage LEDs used in the illumination, smart phones, and tablet sectors.
“Currently, the volume of 110/240 high voltage LEDs in the market is still very small, but are gradually becoming more popular, as the demand for high brightness LEDs is growing. They have been shipped to customers in Asia Pacific and are expected to drive the growth of the group in the second half,” he said.
Tan said the group would start the development of LED test equipment for customised high brightness LED modules used in branded consumer electronic products such as microwave ovens and refrigerators soon.
“The new RM12mil facility, currently being constructed at the same premise in Bayan Lepas, will cater for the development of new products for the next five years, when completed early next year.”
For 2012, the group expected strong performance compared to 2011, driven by the sales in the third and fourth quarters, Tan said.
“The second quarter was down slightly against last year's corresponding period,” he added.
BH Electronics managing director Khoo Hun Poh said the company had recently introduced for the global market higher-value LED lighting products with cost effective designs and special coating on the casing that reduced over-heating, increasing the products' life-span.
These new LED products, because of the cost-effective designs developed by BH Electronics, used less raw material, enabling them to be priced competitively in the market, Khoo said.
The company's LED products are primarily exported to the Netherlands, Germany, South Africa, Japan, and the United States.
“Europe generates over 50% of the company's revenue. We expect flat growth for the company this year, due to the European economic crisis.
“While Europe is experiencing a slowdown, we expect an increase in orders from the US market, which is currently contributing 10%-15% of our revenue.
“Next year the US LED lighting market, driven by the food, automobile, industrial, and household sectors, is expected to generate about 30% of our revenue,” he said.
Khoo said the pricing of LED lighting had come down significantly since 2011 due to cost-effective production technologies and competition.
The company is now constructing a new RM30mil LED assembly facility in Bayan Lepas, scheduled to start operation in the first quarter of 2013.
“Located on 1.5 acres, the three-storey facility will have over 120,000 sq ft of built-up area,” he said.
The Digitimes Research report also said that Japan, South Korea and Taiwan will together account for some 61.3% of the high-brightness LED market in 2012, as the trend towards Asian dominance of the LED industry is becoming even more pronounced.
In its September report, Digitimes Research said Asia-based firms would take up 90% of market demand for MOCVD equipment in 2012, an increase of 10 basis points compared to 2011.
“In particular, equipment demand is highest in China, with an expected share of 68% out of total global demand in 2012,” the report added.

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