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POWER MONITOR: LEDs make headlines, CFLs and CCFLs generate revenue

The recent announcement that Ireland may ban incandescent light bulbs is the latest move by members of the European Union to accelerate the adoption of more efficient lighting technologies and follows similar actions in Australia. Australia is leading a global charge against the incandescent light bulb that could have major implications for makers of CFLs (compact fluorescent lamps), LEDs (lightemitting diodes) and other lighting equipment that uses electronic ballasts. Legislation in Australia would gradually restrict the sale of incandescent bulbs—or any bulbs that do not comply with energy-efficiency targets—by 2009 or 2010.

Exemptions could apply for special needs, such as medical lighting and oven lights.

Following closely on this news was the announcement of an initially largely US-based coalition of industrialists, environmentalists and energy specialists, who want to eliminate the incandescent bulb in about 10 years. The Alliance to Save Energy (www.ase.org) includes Philips Lighting, the Natural Resources Defense Council, and two efficiency organisations. The group is pressing for efficiency standards at the local, state and federal levels to phase out incandescent bulbs and replace them with CFLs, LEDs, halogen devices and other technologies by 2016.

Royal Philips Electronics would lead this initiative in Europe, where the switch-over could happen in 10 years. The company wants the discussions to be part of the new European Union eco-design directive for EUPs (energyusing products). Manufacturers would not be expected to stop manufacturing incandescent bulbs overnight; the shift would happen “collectively” and “be backed by legislation that sets minimum performance criteria.”

Philips recently acquired Color Kinetics, a Boston-based company that makes LED lighting systems for professionals. This is Philips’ third targeting of the LED market, indicating that the company is betting heavily on the future of this technology. In 2005, it bought Agilent Technologies out of their Lumileds LED-component joint venture, and purchased Canada’s TIR Systems, which specialises in white-light-producing LED modules, in March 2007.

These moves look positive for the prospects of solid-state lighting in general, which makes big demands on power conversion. Philips expects the market for LEDs to grow at more than 20% per year and reach $20 to 30 billion in 2025. Financial analysts believe that “LED adoption is happening now,” citing commercial and consumer acceptance of products such as Cree’s XLamp LED. Currently, LED lamps, according to the same sources, “are at least two orders of magnitude more expensive than traditional light sources,” making them several years away from significant market penetration for general illumination. Aggressive price erosion is occurring in the HB (high-brightness)- LED market, which is occurring. Darnell projects that the overall worldwide LED electronic-ballast market will grow around 10.6% by value annually, reaching $3 billion within 2 to 3 years.

In line with developments in Australia and Europe, the US Department of Energy has finalised a new EnergyStar specification for solid-state lighting luminaires; the criteria will go into effect September 30, 2008. Under normal circumstances, DOE would establish an effective date 270 days after public release of the final criteria, although this date may slip due to delayed testing procedures.

The EnergyStar Program Requirements for Solid State Lighting (SSL) Luminaires target general illumination. No EnergyStar product category previously covered any SSL general-illumination devices, although there are other product categories using LEDs for non-illumination purposes, including indication and decoration. Growing use of LEDs as backlight for flat-panel displays—migrating from media players, cellular phones and digital cameras to medium- and large-sized screens and notebook PC monitors—is driving up production volumes of the devices and reducing costs, thus contributing to the adoption potential of LEDs in general- illumination applications. It also increases demand for ICs that are associated with LED drivers as well as for ambient-light sensors.

While the CCFL (cold-cathode fluorescent lamp) market will undoubtedly stall, manufacturers are likely to develop improved products and add continued price pressure to keep their market alive. Possibly in the form of collaborative innovations such as a hybrid backlighting, this will likely incorporate both CCFL and LED technology. Trends in CCFL pricing could delay LED market growth in larger LCD panels. CCFLs and CCFLbacklight inverters have been in oversupply during 2007 as expansion of production capacity in Asia has outpaced demand, according to Delta Electronics. In the long run, however, backlight-inverter makers will continue to see an increasing threat from LED backlighting. Given that LED backlighting in flat-panel TVs and notebook PCs is expected to begin to see growing market adoption, it is somewhat surprising that CCFLproduction expansion is particularly large. In any case, the increased price pressure in the CCFL market will slow LED backlighting’s growth by making the solution less price-competitive. As such, this price pressure is a threat for both backlight inverters and LEDbacklighting drivers.

Jeff Shepard is president of Darnell Group. You can contact him at jshepard@darnell.com.