China’s LED Driver Market Remains on Growth Path

Spurred by government stimulus programs and an increasing number of uses, China’s LED driver market is expected to continue growing during the recessionary year of 2009 and expand at a Compound Annual Growth Rate (CAGR) of 4.4 percent through 2013, according to iSuppli Corp.

Amid the downturn in the global economy and electronics industry, China’s LED driver IC market will rise by only 1 percent in 2009 to reach to $116.5 million, up from $115.3 million in 2008. However, growth will accelerate in 2010 to 9.6 percent, expanding the market to $127.7 billion in size. China’s LED market is forecasted to reach $139 million in 2013.

Moves by China’s central government to stimulate domestic demand and to encourage investment in the LED industry are boosting sales of drivers in the country.

China Gets the LEDs Out
Mobile handsets and portable consumer electronics devices are the dominant applications for LED drivers in China, representing $78 million or 67 percent of the total market in 2009. However, this dominance will weaken during the next five years due the rising use of LEDs for traffic lights and general illumination applications. China’s government had launched dozens of projects to promote the technology, including the LED City initiative. In the first stage of the LED City program, 1 million LED municipal lights will be deployed in more than 20 cities by the end of 2009, including street lamps and lights for public places like tunnels, subways, parks and gas stations, according to the China Ministry of Science and Technology. The ministry predicts the project will save 220 million kilowatt hours worth of energy.

Domestic LEDs
Foreign firms presently dominate China’s LED driver IC market, especially U.S. firms like Texas Instruments Inc., National Semiconductor Corp. and Linear Technology Corp. These suppliers serve a diverse set of markets, each with very specific requirements, including mobile handsets, portable consumer electronics devices, automotive, signage/large displays, traffic lights and general illumination. Taiwanese LED players are also active, including Richtek. Richtek is particularly strong in the mobile handset and consumer electronics markets.

Only a few domestic Chinese semiconductor companies focused on the LED driver market before 2008. However, starting last year an increasing number of Chinese competitors entered the LED driver segment due to China’s efforts to spur domestic supply for the LED City program and other projects.

Companies entering the LED area include Integrated Device Manufacturers (IDMs), such as Shanghai Belling Microelectronics Manufacturing Corp. and Hangzhou Silan Microelectronics Co. Ltd.

However, most of the new market entrants are fabless companies. More than 40 fabless IC design companies have developed LED driver ICs since the start of 2008, and iSuppli believes almost all companies focused on the power management IC market will launch their own LED driver IC products during the next two years.

iSuppli anticipates Chinese firms will make substantial progress in this market as they seek aggressive growth during the next five years, especially in the markets for backlights for mobile handsets and consumer portable devices.