LED Supply

LED Supply/Demand Outlook
October 25 - 27, 2010 San Diego Convention Center, San Diego, CA, US Pira Intertech
Copyright 2010 YMR, All Worldwide Rights Reserved Confidential
Outline
State of LED Supply
Regional LED Manufacturer LED Tool Maker
LED Demand
Small/Medium Displays Large Area Displays Lighting Automotive/Signaling Others
Supply/Demand Reactor Forecast Forecast Deviations

LED Supply
Supply Model
Methodology
Survey Tool Makers and LED Producers by: Tool Model
Capacity Install Dates Bookings
Results
Fab/Wafer Capacity Epi Yield Binned Die Capability Production by
Tool Maker LED Producer Region Wafer
Model the production based on:

Average Die Size/application Yields/Application Epi Binning Calculate Runs/day Apply Fab Utilization Packaging Yield
Application
MOCVD Installed Base

MOCVD tool count will grow by 50% from 2009 to 2010
3500 80% 70% 60% 50% 40% 1500 30% 1000 20% 10% 0% Q1'09 Q2'09 Q3'09 Q4'09 Q1'10 Q2'10 Q3'10 Q4'10 Growth 2000 Reactors Y/Y Growth Q/Q Growth 3000
2500 Installed Reactors
500
Source: YMR
MOCVD Installed Base by Region

Chinese government supporting tool purchases:
13 regional industrial bases Land/Tax Abatements US$1.1m to US$1.8M tool subsidies
Taiwan Japan USA 35% 30% 25% 20% 15% 10% 5% 0% Q1'09 Q2'09 Q3'09 Q4'09 Q1'10 Q2'10 Q3'10 Korea China Europe
Share
Source: YMR
MOCVD Supplier Installs

New tool shipments and capacity growing exponentially in 2010
Company Aixtron Veeco Nippon Sanso Other Total Q/Q Growth Y/Y Growth Q2'09 15 7 0 0 22 Q3'09 41 22 75 0 138 Q4'09 70 36 75 0 181 31% Q1'10 101 48 75 0 224 24% Q2'10 130 81 225 7 443 98% 1914% Q3'10e 159 100 225 12 496 12% 259%
Source: YMR
Wafer Capacity (000)

Wafer size shifting from 2 and 3 to 4 6 wafers increase market share in terms of capacity
Wafer (000) Wafer Size 2" 3" 4" 6" Total 2009 45255 5070 11130 356 61812 2010 60751 4378 30257 1710 97096 Growth 34% -14% 172% 380% 57% 2009 Share 73% 8% 18% 1% 100% 2010 Share 63% 5% 31% 2% 100%
sq. m (000) Wafer Size 2" 3" 4" 6" Total 2009 Area 92 23 90 6 212 2010 Area 123 20 245 31 420 Growth 34% -14% 172% 380% 98% 2009 Share 43% 11% 43% 3% 100% 2010 Share 29% 5% 58% 7% 100%
Source: YMR
Die Capacity(m) and Growth

Total Q/Q Growth Y/Y Growth
140% 100000 120% 80000 100% Die(m) Growth
60000
80%
60% 40000 40% 20000 20%
0 Q1'09 Q2'09 Q3'09 Q4'09 Q1'10 Q2'10 Q3'10 Q4'10
0%
Source: YMR
Binned Die(m)and Growth

Includes epi and binned die yields Includes utilization and packaging yields 20000
18000 100% 16000 14000 Binned Die (m) 12000 10000 8000 6000 4000 0% 2000 0 Q1'09 Q2'09 Q3'09 Q4'09 Q1'10 Q2'10 Q3'10 Q4'10 -20% 40% 80% Total Y/Y Growth Q/Q Growth 120%
20%
Source: YMR
10
Growth
60%
Binned Die Regional Share

Taiwan Japan USA
45.0% 40.0% 35.0% 30.0% Share 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% Q1'09 Q2'09 Q3'09 Q4'09 Q1'10 Q2'10 Q3'10
Korea China Europe
Source: YMR
11
Leading Manufacturers of LED Die (m)

Binned Die Production
Die (m) Rank 1 2 3 4 5 6 7 8 9 10 Nichia LG Group Epistar HUGA Tekcore Samsung LED Epivalley Seoul Opto Forepi Genesis Photonics Others Total Company Q1'09 1099 259 609 326 382 328 525 92 369 391 4037 8417 Q2'09 1099 261 623 339 382 337 528 97 369 391 4050 8478 Q3'09 1099 281 629 351 382 351 533 105 369 391 4094 8586 Q4'09 1099 373 714 430 397 390 533 123 385 391 4211 9046 Q1'10 1118 399 636 467 421 399 502 133 392 369 3926 8762 Q2'10 1279 619 730 641 535 516 521 348 445 411 4686 10731 Q3'10 1636 836 773 749 713 625 620 554 487 427 5726 13148
Source: YMR
12
Taiwan LED Revenues (TWD)

Taiwan LED m/m revenues down in Oct/Sept. 2010 due to LED (LCD) TV inventories
2009 2010 2009 Growth 2010 Growth 5000 40% 4000 TWD (m) 30% 20% 3000 10% 2000 0% -10% 1000 -20% 0
Au gu st Se pt em be r O ct ob er N ov em be r De ce m be r Ja nu ar y Fe br ua ry M ar ch Ju ne Ap ril M ay Ju ly
50%
-30%
Source: Company Reports

13
LED Demand
Demand Model
Demand Sources
Backlights
LCD TVs Notebooks Monitors Small/Medium Displays
Camera Flashes Illumination Products

Residential Commercial Industrial Outdoor
Automotive/Display/Others
15
Small/Medium Display Demand

Panel Shipments LED Shipments Shipment Growth LED Growth 30000 35%
25000
30%
25% Panels (m)/LED (m) 20000 Growth 20% 15000 15% 10000 10% 5000
5%
0 2009 2010 2011 2012 2013 2014 2015
0%
Source: YMR
16
Large Area Displays

Notebook CRT 1200 LCD (LED) Other Monitors LCD (CCFL) PDP LED 80,000 1000 70,000 800 Panels (m) 60,000 50,000 600 40,000 400 30,000 20,000 200 10,000 0 2009 2010 2011 2012 2013 2014 2015 0 LEDs (m) 90,000
Source: YMR/IMS
17
LED Backlit L/A Panels & LED Growth

L/A LED Displays L/A LED Display Growth LED Growth 1200 70%
1000
60%
50% 800 Panels (m) Growth 40% 600 30% 400 20% 200
10%
0 2009 2010 2011 2012 2013 2014 2015
0%
Source: YMR/IMS
18
Converting from Traditional to SSL

Output (lm) Power (W) Electrical Efficiency Thermal Efficiency Optical Efficiency LED Degradation Luminaire Efficiency Cost per LED 2010 80 1.0 90% 90% 90% 6% 69% $1.50 2011 88 1.0 91% 91% 91% 6% 71% $1.35 2012 97 1.0 92% 92% 92% 6% 73% $1.22 2013 106 1.0 93% 93% 93% 6% 76% $1.09 2014 117 1.0 94% 94% 94% 6% 78% $0.98 2015 129 1.0 95% 95% 95% 6% 81% $0.89
$250.00 2010 Price Differential $200.00 $150.00 $100.00 $50.00 $Incandescent CFL Fluorescent HID 2011 2012 2013 2014 2015
Source: YMR
19
Lighting Shipments(m) by Application

Outdoor Outdoor
Luminaires
700 600 500 400 300
Industrial Commercial Residential
Lamps
80000 70000 60000 50000 40000 30000
Industrial Commercial Residential
200 20000 100 0 2010 2011 2012 2013 2014 2015 10000 0 2010 2011 2012 2013 2014 2015
Source: YMR
20
Lighting Shipment Share by Technology

Luminaires
Incandescent Fluorescent
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2010 2011 2012 2013 2014 2015
Lamps
CFL High Intensity
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2010 2011 2012 2013 2014 2015
Incandescent Fluorescent
CFL High Intensity
Source: YMR
21
Conversion from Traditional to SSL

Luminaires (m)
450 400 350 300
2500
Lamps (m)
4000
Residential Industrial
Commercial Outdoor
Commercial Outdoor
3500
3000
250
2000
200
1500
150 100 50 0 2010 2011 2012 2013 2014 2015

1000
500
0 2010 2011 2012 2013 2014 2015
Source: YMR
22
LED Shipments (m) and Share

Shipments (m)
80000
Share
100%
Commercial Outdoors
Commercial Outdoors
70000
90%
60000
80%
70% 50000 60% 40000
50%
30000
40%
30% 20000 20% 10000 10%
0 2010 2011 2012 2013 2014 2015
0% 2010 2011 2012 2013 2014 2015
Source: YMR
23
LED/Traditional Lamp Annual Shipments

90000 80000 25% 70000 60000 50000 15% 40000 30000 20000 5% 10000 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 0% 10% 20% Trad. Lamps SSL Share SSL Lamps 30%
Source: YMR
24
LED Demand Automotive/Signals/Other

Other Signals/Automotive Growth 30000 30% 25% 25000 20% 15% 10% 15000 5% 0% 10000 -5% -10% 5000 -15% 0 2009 2010 2011 2012 2013 2014 2015 -20%
20000
Source: YMR
25
LED Supply/Demand
LED Demand and Growth

250,000
Other Lighting Small/Medium Backlights Large Area LCD Backlight Growth 60%
200,000
50%
LED Demand (m)
40% 150,000 30% 100,000 20% 50,000 Growth
10%
0 2008 2009 2010 2011 2012 2013 2014 2015
0%
Source: YMR/IMS
27
LED Supply/Demand
Binned Die (m) Supply Binned Die (m) Demand @105% Die Glut (m) @105% of demand 200,000 150,000 Binned Die (M) 100,000 50,000 0 -50,000 -100,000 -150,000 2009 2010 2011 2012 2013 2014
Supply Fixed at 2010 Levels

Source: YMR
28
Reactor Demand Forecast

Base 3 per. Mov. Avg. (Base)
2500
2000
Reactors
1500
1447
1457
1482
1000 774 500 299 128 0 2009 2010 2011 2012 2013 2014 2015 691
Source: YMR
29
Forecast Deviations
CNT Based Backlight Replacement

Replacement Characteristics Catalyst -- metallic nanoparticles are embedded in a matrix Thin .5 mm glass <1 mm spacers Eliminates color filter Provides local dimming Redundant Emitters Progressive scan capability No gate requirement Cost issues using HFCVD equipment, potential for printing High Voltage Anode (~10-15 kV) High Luminance Forecast
Penetration TVs CNT LEDs (m) 5% 195 10 4875 10% 225 23 10125 15% 250 38 15188
Source: YMR/Motorola
31
AMOLED TVs
Samsung (SMD) expected to announce 8th Gen Fab dedicated to OLED TVs
Timeframe 2012-2013 installation 18 40 panels/substrate Target Capacity
Year 1 -- 30k substrates/month Year 2 -- 60k substrates/month Year 3 -- 90k substrates/month
LG Display, AUO, Panasonic, Chinese likely to follow
Forecast (40 panels/year)

OLED Fab 1 Fab 2 Fab 3 Total (000) LEDs (m) 1593 797 9888 4449 2013 1593 2014 8295 1593 2015 13704 8295 8295 30293 12269
Source: YMR
32
OLED Lighting
Current Status
>15 companies developing prototypes and pilot lines, including Philips Small Molecule --Fluorescent/Phosphorescent Osram Opto -- Small Molecule --Fluorescent/Phosphorescent GE Solution Based Phosphorescent, R-T-R Panasonic -- Small Molecule --Fluorescent/Phosphorescent Konica Minolta -- Solution Based Phosphorescent, R-T-R Lumiotec -- Small Molecule --Fluorescent/Phosphorescent Zumtobel/Thorne Lighting/Ledon/Fraunhofer Polymer Based Mitsubishi/Pioneer -- Small Molecule --Fluorescent/Phosphorescent, 2nd Gen Fab Moser Baer -- Small Molecule Phosphorescent Samsung -- Small Molecule Phosphorescent, 2nd Gen Fab LG -- Small Molecule Phosphorescent ModisTech Polymer, R-T-R NEC Lighting -- Small Molecule --Fluorescent/Phosphorescent
Target Size Substrate

2nd Gen 2010 4th Gen 2012
33
OLED Lighting
Primary Market
Currently, OLED lighting is limited to demonstration programs and decorative/architectural lighting. Future 3 to 5 years away Fluorescent Luminaire Replacements Integrated into acoustic ceiling tiles Compete with LEDs
Source: Osram Opto
Source: Lumiotec
Source: Acuity Brands Source: Lumiotec
Source: General Electric
Source: Philips
34
OLED Lighting
Assumptions
Production Capacity
250x250 mm Substrates (000) Utilization Yields Production (m) 2013 16 360 70% 50% 2 730x920 2014 16 720 80% 75% 7 2015 16 1080 85% 85% 12
Performance
10" 12" 14" sq. m 0.063 0.093 0.126 cd/m2 3000 4000 5000 lumens 589 1167 1986 Lm/W 100 110 120 W 5.9 10.6 16.6 $/klm 255 171 126
LED/OLED Replacement LEDs

per Luminaire Luminaires (m) Lamps (m) Total (m) Total LEDs (m) OLED Share (m) Total LEDs (m) OLED Fabs
2013 26 9 126 135 3522 7 176 4
2014 23 9 327 336 7730 34 773 5
2015 20 11 666 677 13535 102 2030 9
Source: YMR
35
Impact of CNT & OLEDs on MOCVD Installs

Plan Difference Deviation % Change
1,500
-50%
1,000 -100% Reactors 500 -150% 0 Change -200% 2010 2011 2012 2013 2014 2015
-500
Source: YMR
36
Questions barry@oled-a.org
YMR Produces: Quarterly High Brightness LED Supply and Supply/Demand Report Available from IMS Research Quarterly Model for Solid State Lighting (SSL) Adoption LED Material Report (under construction) OLED Lighting & Display Report (under construction)

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LED Supply

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LED Supply/Demand Outlook

Supply/Demand Reactor Forecast Forecast Deviations

Copyright 2010 YMR, All Worldwide Rights Reserved Confidential

Model the production based on:

Copyright 2010 YMR, All Worldwide Rights Reserved Confidential

MOCVD Installed Base

2500 Installed Reactors

MOCVD Installed Base by Region

Copyright 2010 YMR, All Worldwide Rights Reserved Confidential

MOCVD Supplier Installs

Wafer Capacity (000)

Die Capacity(m) and Growth

60% 40000 40% 20000 20%

0 Q1'09 Q2'09 Q3'09 Q4'09 Q1'10 Q2'10 Q3'10 Q4'10

Binned Die(m)and Growth

Binned Die Regional Share

Korea China Europe

Leading Manufacturers of LED Die (m)

Taiwan LED Revenues (TWD)

Source: Company Reports

Copyright 2010 YMR, All Worldwide Rights Reserved Confidential

Camera Flashes Illumination Products

Copyright 2010 YMR, All Worldwide Rights Reserved Confidential

Small/Medium Display Demand

0 2009 2010 2011 2012 2013 2014 2015

Large Area Displays

LED Backlit L/A Panels & LED Growth

0 2009 2010 2011 2012 2013 2014 2015

Converting from Traditional to SSL

Lighting Shipments(m) by Application

Industrial Commercial Residential

Industrial Commercial Residential

Lighting Shipment Share by Technology

CFL High Intensity

Conversion from Traditional to SSL

150 100 50 0 2010 2011 2012 2013 2014 2015

0 2010 2011 2012 2013 2014 2015

LED Shipments (m) and Share

70% 50000 60% 40000

30% 20000 20% 10000 10%

0 2010 2011 2012 2013 2014 2015

0% 2010 2011 2012 2013 2014 2015

LED/Traditional Lamp Annual Shipments

LED Demand Automotive/Signals/Other

Copyright 2010 YMR, All Worldwide Rights Reserved Confidential

LED Demand and Growth

LED Demand (m)

40% 150,000 30% 100,000 20% 50,000 Growth

0 2008 2009 2010 2011 2012 2013 2014 2015

Supply Fixed at 2010 Levels

Reactor Demand Forecast

Copyright 2010 YMR, All Worldwide Rights Reserved Confidential

CNT Based Backlight Replacement

LG Display, AUO, Panasonic, Chinese likely to follow

Forecast (40 panels/year)

Target Size Substrate

Copyright 2010 YMR, All Worldwide Rights Reserved Confidential

Source: Osram Opto

Source: Acuity Brands Source: Lumiotec

Source: General Electric

Copyright 2010 YMR, All Worldwide Rights Reserved Confidential

LED/OLED Replacement LEDs

2013 26 9 126 135 3522 7 176 4