Market researcher: Phosphors, Rare Earths supply remains crucial for LED production

February 08, 2013 // By Christoph Hammerschmidt
In the LED industry, the availability of phosphors is a critical and potentially limiting factor - phosphors are needed to build white LEDs. In the beginning of the millennium, the bulk of the LED phosphor and the associated IP was under the control of the major LED manufacturers, but today many alternatives are available. In a report, market research company Yole Développement shades light to this puzzling industry.

The Yole report "LED phosphors -Independent phosphor companies free the market from IP blocking by market leaders" details more than 50 companies involved in the LED phosphor business. More of them are located in China, and Yole observes the emergence of vendors with improved quality there. The market watchers expect the phosphor market to grow significantly over the five years ahead - they see the potential to pass the $1 billion mark as early as 2015 mark.

Key findings are

  • The combination of YAG phosphor and blue LED remains the solution of choice for applications where high CRI and warm color temperature are not required. Nichia however still disposes of strong IP which limits the access to YAG to a few selected partners.
  • Nitrides and Oxynitrides offer excellent performance for LED applications requiring warm colors and saturated reds. But these materials are controlled by Denka and Mitsubishi Chamicals. Market price for these materials is five to ten times higher than that of yellow phosphors.
  • Remote phosphors offer significant benefits in terms of system performance and efficiency. However they increase the amount of phosphor material and thus of associated costs by orders of magnitude. In selected applications these additional costs can be offset by improving overall performance and reduced component count.
  • A Rare Earth shortage could impact the LED industry in the mid-term. In particular, elements such as Yttrium, Terbium and Europium tension will persist. The major application competing with LED for these resources is fluorescent lamps. The end of incandescent bulbs will lead to significant demand increase for fluorescent lamps, putting additional strain on supply.