IHS Report Light-Emitting Diodes LED silicone encapsulant market to nearly double in size by 2017 compared to 2012 November 2013 ihs.com Richard Son, Senior Analyst(author), +82 31 704 7188, Richard.Son@ihs.com LEDB-S1-O-01-2013
Contents. I Introduction 4. II Production and molding process of packaged LED 6 Overview of packaged LED 7 Categorization of packaged LED 8 Production process of packaged LED 10 Overview of packaged LED molding process 12 Molding type of packaged LED 13 Casting molding 14 Dispensing molding 17 Transfer molding 19 Injection molding 21 Screen printing molding 22 Molding apparatus for packaged LED 23. III LED encapsulants 26 Overview of encapsulants 27 Type of packaged LED encapsulants 31 Concept and characteristics of epoxy encapsulants 32 Concept and characteristics of silicone encapsulants 34. IV Supply chain analysis 38 Overall 39 Supply chain analysis by region 40 South Korea 40 Japan 40 Taiwan/China 41 EMEA/Americas 41 V. LED encapsulant market forecast 42 Overall 43 Volume 43 Value 44 Volume by type (epoxy/silicon) 45 Value by type (epoxy/silicon) 46 Volume by region 47 Value by region 48 LED encapsulant price forecast 49. VI LED silicone encapsulant market forecast 50 Overall 51 Volume 51 Value 52 Volume by type (epoxy/silicon) 53 Value by type (epoxy/silicon) 54 Volume by region 55 Value by region 56 2
Contents South Korea 57 Volume 57 Value 58 Volume by type (phenyl/methyl/others) 59 Value by type (phenyl/methyl/others) 60 Taiwan 61 Volume 61 Value 62 Volume by type (phenyl/methyl/others) 63 Value by type (phenyl/methyl/others) 64 Japan 65 Volume 65 Value 66 Volume by type (phenyl/methyl/others) 67 Value by type (phenyl/methyl/others) 68 China 69 Volume 69 Value 70 Volume by type (phenyl/methyl/others) 71 Value by type (phenyl/methyl/others) 72 EMEA 73 Volume 73 Value 74 Volume by type (phenyl/methyl/others) 75 Value by type (phenyl/methyl/others) 76 Americas 77 Volume 77 Value 78 Volume by type (phenyl/methyl/others) 79 Value by type (phenyl/methyl/others) 80 3
I. Introduction LED Package-use Encapsulation Material Report - 2013
Introduction With the development of the blue light-emitting diode (LED) in 1993, LED has been applied in various fields. With that, consumers are expecting higher performance for even the key components of the LED. The key components that make up packaged LED include the light-emitting GaN chip; the lead frame, which keeps the frame of the LED; the fluorescent substance, which transmits light; and the encapsulant, which protects LED from external thermal environments and helps prolonging its life time. Along with rising demand for high output and high brightness, LED encapsulant s role is ever more important as it is strongly related to LED s life span and transmittance. That is why companies are continuously pursuing technology development. Most of the dome-type LED, used on signals or outdoor displays in the 1990s, employed epoxy resin. As it was later applied to mobile phones and LCD TV backlight units (BLU), the encapsulant started being used to meet the expectations for the refractive index, heat-resistance, and light-resistance. Currently more than 90% of the LED encapsulant market is using silicone encapsulants, and the use of silicone encapsulants in packaged LEDs is forecast to continue. The LED encapsulant market started to see an increase in demand after 2010 with the growth of the LED TV, and currently with the opening of the LED lighting market, the LED encapsulant market is preparing to take another leap. LED silicone encapsulants can largely be divided into phenyl types and methyl types. Phenyl types are used in BLU while methyl types in mobile phones, monitors, and tablet PCs. Both types are used for LED lighting, while the use of methyl types are increasing. IHS researched the outline of encapsulants for packaged LED, as well as their characteristics and function by type. This report also analyzes the current market and provides the market outlook. This should provide informative research to companies dealing with LED encapsulants and/or those related to the LED material industries. Definitions: EMEA: Europe/Middle East/Africa Polycarbonates: Transparent and strong synthetic resins used in windows and lenses Photovoltaics (PV) modules: A panel of multiple solar cells SMD type: Surface mount device type Dome LED: A packaged LED used in signals, electronic displays, and external displays, also known as wire LED. BLU: Backlight unit, the light source of TVs, monitors, and tablet PCs. 5
II. Production and molding process of packaged LED LED Package-use Encapsulation Material Report - 2013
Overview of packaged LED Major functions of packaged LED are allowing the input of electrical signals, and protecting the bare chip from external environments. In addition, packaged LED should be designed to have maximum light extraction efficiency and to have minimum heat-resistance so that it emits heat easily. It should also be reliable. To meet such needs, it is important to have the right package structure, materials, and process. The general package structure and materials are shown in the diagram below. A packaged LED is composed of the lead frame (or substrate), which is the backbone of the package, LED chip, die paste, Au wire, and encapsulant. (Fluorescent substance is also included for white light LED.) Structure of packaged LED and the materials Die Paste LED Chip Encapsulant + Phosphors Gold Wire PPA, LCP Lead Leadframe 7
Categorization of packaged LED Categorization Package Details Note Dome(Radial) type Shell type, Throughhole Chip LED Small package of PCB substrate Categorization by form (mounting) SMD LED Topview PLCC, Power Package Sideview Side emitting LED Array COB, COM type Categorization by output power Small Power Middle Power High Power <0.1W level 0.3~0.5W level >0.5W Plastic Package PLCC Ceramic Package Alumina, AlN sub. Categorization by material (substrate) Metal Package PCB type Package Cu, Al-Based sub. BT or FR-4 Resin WLP Si wafer-based sub. 8
Package production process LED package process can be divided into six stages: Die bonding, in which the chip is mounted on the substrate (or lead frame); wire bonding where the chip and the lead frame is electrically connected; molding, in which the chip is covered with an encapsulant to protect the chip; trimming and forming stage where individual package devices are separated from the substrate (or lead frame) array; test and sorting, which test the performance and sort by performance; and taping, in which the product is taped on a reel tape to facilitate the automation of postprocess (surface mount technology). The raw materials and processing conditions affect not only optical performance of packaged LEDs but also its reliability, so the raw materials must be selected with caution and the production process must be under an optimal condition. In particular, the substrate (lead frame) must be optically designed so that it can have maximum light extraction efficiency, and it must also have right thermal design and materials so that the substrate has low heat resistance. Selecting raw materials (encapsulants (silicone, epoxy)/fluorescent substances) and creating optimal processing conditions are essential in the molding process, which greatly affects the reliability/defects/yields of packaged LED. As for defects, there can be flaking as a result of the different thermal expansion index between encapsulant/chip/substrate; wire open; cracks of the encapsulant; and oxidization of the plated area of the substrate. In the die bonding process, substrate (lead frame) materials can greatly affect the performance and reliability of packaged LED, and the adhesion of the die paste is important. The condition of chip s electrode pad is important under the wire bonding process. If there is a wire open, it can cause detrimental defects. Especially if the wire ball is not created because of pollution or foreign substances, or if the ball shear test (BST) value is low, then there is a high chance that there will be defects. 9
III. LED encapsulant LED Package-use Encapsulation Material Report - 2013
Overview of encapsulant Molding refers to closing off the surrounding areas of a semiconductor and mounted circuit to protect them from the detrimental air. Molding is also called sealing or encapsulation. The main purpose of LED molding is to protect a chip (die) from the outside environment such as moisture or pollution, and to control the directivity of light by mold it in the form of a lens. Other purposes include electrical insulation, reinforced strength, heat resistance enhancement, mitigation of stress, concealment of a circuit, enhancement of light blocking, covering of alpha rays, and heat dissipation improvement. Areas encapsulants are used Solar Celll Semiconductor Packaged LED 11
Main application in industrial encapsulation Semiconductor Packaged LED Solar cell Semiconductor Semiconductor encapsulant is a material that covers the outer part of a semiconductor. The material must have the characteristic of a thermosetting polymer material that creates a three-dimensional curing structure from external heat, as well as that of an organic-inorganic compound material that enhances the material s performance. The encapsulant s curing characteristics are obtained from organic materials such as epoxy, which has superior molding and mechanical characteristics, and price benefits. So the encapsulant used for semiconductor packaging is called the epoxy molding compound. LED LED encapsulant protects an LED chip, and also protects the device from external conditions through stable adhesion with a lead frame. Epoxy and silicone are used for LED encapsulants. Dome types use epoxy resin, while the surface mount device (SMD) types use silicone resin. With the release of blue LED, demand for encapsulants that have superior xanthochromic traits to light and heat has increased, leading to constant technology development of LED encapsulants. Solar cell Encapsulant for solar cell is an important material for the photovoltaic module as it has various functions such as sticking the glass, solar cell, and the back sheet together in the PV module, and protecting the cell from all moisture and dust. Among others, the bridge-type ethylene vinyl acetate sheet (cross-linkable EVA sheet; XL EVA sheet) has proved to be superior in terms of its economic efficiency and performance, and is recognized as a main encapsulation material. The characteristics of the EVA sheet are affected by resin, and may change according to the vinyl acetate (VA) content and molecular weight. Ones that have 7~60% VA content are labeled EVA resin and those under 7% are called PE products. Ones that have more than 60% VA are not considered as plastic. The transmittance and adhesiveness must be great, and only when the crosslink is good, the life time of the PV module can be extended to the max. 12
Types of LED encapsulant Types of packaged LED encapsulant LED encapsulants LED encapsulant types by LED application Epoxy Silicone Type Silicone methyl Major applications Tablet and monitor BLU, high power LED lighting Silicone phenyl TV LED BLU, lighting Epoxy Liquid Epoxy EMC Silicone Hybrid Silicone Phenyl Silicone Methyl Silicone hybrid Epoxy BLU, LED lighting Traffic lighting, signage display, dome LED Encapsulants for packaged LED can be divided into two Epoxy and silicone. According to each characteristic, silicone can be categorized into three types, while epoxy into two. Epoxy had been mainly used in low-brightness LED before 2010, but as LED BLUs started being applied to TV panels, now silicone encapsulants with good thermal properties are mostly used. Silicone hybrid types have a characteristic between the methyl and the phenyl. Some companies are aggressively developing the hybrid types to meet demands for high-functional packaged LEDs. 13
Concept and characteristics of silicone encapsulant The name silicone was first coined by Frederick Stanley Kipping. Silicone is a compound of silicon-oxygen-silicon. Silicone that we commonly refer to is polymer compounds that include Si, such as polysilylene, polycarbosilane, and polysiloxane ((R 2 SiO)n). They can be in a form of oil, resin, and rubber. Thanks to the unique chemical structure of silicone that has both organic and inorganic characteristics, silicone is an essential high functional material for the industrial sectors that evolve into high function and high performance. The main component of silicone is silicon oxide (SiO 2 ), the chief component of sand. It does not exist under natural state, but only as SiO 2 (silica) that is combined with oxygen, or in the form of silicate. Silicon makes up 27.6% of Earth crust. Concept of silicone Automic number Automic weight Melting point ( C) Boiling point ( C) Covalent radius (10-10 m) Electro negativity R S i R R R Si Si R R [Polysilylene] [Polycarbosilane] [Structure of general silicone] CH 2 R R R Si O Si R R R [Polysiloxane] [Structure of LED silicone] 14
IV. Supply chain analysis LED Package-use Encapsulation Material Report - 2013
Overall Dow Corning Corporation and Shin-Etsu Chemical Co. represent more than 90% of the global LED silicone supply, with Dow Corning accounting for 65%. Dow Corning has fundamental patents regarding silicone production and manufacturing capabilities. Most packaged LED makers use Dow Corning products. Japan s packaged LED companies are mainly using the products of Shin-Etsu, which specializes in in methyl silicone products. Cheil Industries Inc. and LG Chem Ltd. are supplying LED silicone to their affiliates, Samsung Electronics Co. and LG Innotek Co., respectively. Cheil Industries is also promoting its products to a number of packaged LED makers. Wacker Chemie AG, a German brand, participates in LED exhibitions around the world to promote its LED silicone encapsulants. Global LED encapsulant suppliers Major suppliers 65% 25% 5% 16
Supply chain analysis by region South Korea LED encapsulant supply chain in South Korea Japan LED encapsulant supply chain in Japan Suppliers Samsung Electronics (Former. Samsung LED) Nichia LG Innotek Toyoda Gosei Seoul Semiconductor Stanley Electric Lumens Lumimicro Sharp Rohm 17
V. LED encapsulant market forecast LED Package-use Encapsulation Material Report - 2013
Overall Volume LED encapsulant market forecast (Kg) 4,000,000 10.0% 3,500,000 9.0% 3,000,000 8.0% 7.0% 2,500,000 2,000,000 1,500,000 6.0% 5.0% 4.0% 1,000,000 3.0% 2.0% 500,000 1.0% 0 2012 2013 2014 2015 2016 2017 Demand 2,485,899 2,704,716 2,937,145 3,138,880 3,306,601 3,370,879 Growth Rate 8.8% 8.6% 6.9% 5.3% 1.9% 0.0% 19
Volume by type Epoxy encapsulants are expected to be used mostly in low-priced packaged LED, and its demand is way greater than that of the silicone type. Demand for the silicone type has increased from the LED lighting market since the beginning of 2013. The silicone encapsulant market will grow to 856 tons in 2017 from 536 tons in 2013. LED encapsulant market forecast by type (Kg) LED encapsulant market forecast by type (%) 4,000,000 100.0% 3,500,000 3,000,000 2,500,000 90.0% 80.0% 70.0% 60.0% 2,000,000 50.0% 1,500,000 1,000,000 500,000 40.0% 30.0% 20.0% 10.0% 0 2012 2013 2014 2015 2016 2017 epoxy 2,043,716 2,168,289 2,294,132 2,396,112 2,491,142 2,515,015 silicone 442,183 536,428 643,013 742,768 815,459 855,864 0.0% 2012 2013 2014 2015 2016 2017 epoxy 82.2% 80.2% 78.1% 76.3% 75.3% 74.6% silicone 17.8% 19.8% 21.9% 23.7% 24.7% 25.4% 20
Volume by region The region is determined by the location of packaged LED makers headquarters. China, which uses greater volume of epoxy encapsulants than other countries, makes up 40% of the total consumption, followed by Taiwan. As demand for BLU, which mostly uses silicone encapsulants, is great in South Korea, the country consumes relatively small volume of epoxy. LED encapsulant market forecast by region (Kg) LED encapsulant market forecast by region (%) 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 100.0% 90.0% 80.0% 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0 2012 2013 2014 2015 2016 2017 Taiwan 560,681 565,556 560,598 601,176 686,098 694,750 Korea 231,910 192,690 177,970 183,413 192,627 181,940 Japan 194,730 219,974 227,171 223,909 213,196 225,893 EMEA 206,821 235,786 274,119 287,543 291,117 295,417 China 857,710 971,359 1,093,262 1,195,133 1,275,343 1,356,784 Americas 217,694 259,966 309,461 324,551 293,606 253,106 0.0% 2012 2013 2014 2015 2016 2017 Taiwan 24.7% 23.1% 21.2% 21.4% 23.2% 23.1% Korea 10.2% 7.9% 6.7% 6.5% 6.5% 6.0% Japan 8.6% 9.0% 8.6% 8.0% 7.2% 7.5% EMEA 9.1% 9.6% 10.4% 10.2% 9.9% 9.8% China 37.8% 39.7% 41.4% 42.4% 43.2% 45.1% Americas 9.6% 10.6% 11.7% 11.5% 9.9% 8.4% 21
LED encapsulant price forecast The supply price of encapsulants falls every year, and it is expected to continue to drop for the cost competitiveness of LED lighting products. The average selling price of phenyl silicone is forecast to fall by more than $200 to $425 in 2017 from $656 in 2012. The average selling price of epoxy encapsulants are already stabilized on a lower level, so decreasing rates will not be great. LED encapsulant average selling price by type ($) 700.0 600.0 500.0 400.0 300.0 200.0 100.0 0.0 2012 2013 2014 2015 2016 2017 silicone phenyl 656.9 584.3 539.0 497.6 460.3 425.2 silicone methyl 506.6 429.1 395.2 364.7 336.5 310.6 silicone Others 240.3 216.4 193.7 174.6 157.4 140.6 epoxy 13.3 12.1 11.4 10.6 10.1 9.7 22
VI. LED silicone encapsulant market forecast LED Package-use Encapsulation Material Report - 2013
Overall Volume Volume of LED silicone encapsulants is forecast to nearly double to 856 tons in 2017 from 442 tons in 2012. With the growth of the LED lighting market, the demand for lighting-use packaged LED will likely rise. As the size of packaged LED increases, demand for encapsulation will also rise. LED silicone encapsulant market forecast (Kg) 900,000 25.0% 800,000 700,000 600,000 500,000 20.0% 15.0% 400,000 300,000 10.0% 200,000 5.0% 100,000 0 2012 2013 2014 2015 2016 2017 silicone 442,183 536,428 643,013 742,768 815,459 855,864 Growth Rate 21.3% 19.9% 15.5% 9.8% 5.0% 0.0% 24
Volume by type With the stagnation in the BLU market, in which phenyl silicone is mostly used, and the growth of the LED lighting market, it is expected that the portion of methyl silicone will gradually increase. The portion of methyl silicone is forecast to grow to 47.6% in 2017 from 37% in 2012. LED silicone encapsulant market forecast by type (Kg) LED silicone encapsulant market forecast by type (%) 900,000 100.0% 800,000 700,000 600,000 500,000 400,000 300,000 200,000 100,000 90.0% 80.0% 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0 2012 2013 2014 2015 2016 2017 Others 21,434 22,870 38,019 51,939 61,560 73,894 methyl 163,440 206,726 259,537 305,676 351,428 407,095 phenyl 257,309 306,832 345,457 385,153 402,471 374,874 0.0% 2012 2013 2014 2015 2016 2017 Others 4.8% 4.3% 5.9% 7.0% 7.5% 8.6% methyl 37.0% 38.5% 40.4% 41.2% 43.1% 47.6% phenyl 58.2% 57.2% 53.7% 51.9% 49.4% 43.8% 25
Volume by region Demand for silicone encapsulants from South Korea and Taiwan, which have large productions of TV, monitor, and tablet PC, is much higher. But with the increasing demand for LED lighting products, it is expected that demand for the encapsulants will jump from China after 2013, as the country has ample productions of packaged LED. The consumption of silicone encapsulation in China is forecast to grow to 241 tons in 2017 from 88 tons in 2012. LED silicone encapsulant market forecast by region (Kg) LED silicone encapsulant market forecast by type (%) 900,000.0 800,000.0 700,000.0 600,000.0 500,000.0 400,000.0 300,000.0 200,000.0 100,000.0 100.0% 90.0% 80.0% 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0 2012 2013 2014 2015 2016 2017 Taiwan 104,628 121,772 145,013 167,319 192,870 201,060 Korea 111,725 137,614 149,550 155,838 161,745 161,929 Japan 61,415 71,738 78,112 83,117 82,957 77,906 EMEA 38,781 48,514 63,644 76,117 80,472 83,198 China 88,126 109,526 145,595 184,840 211,542 241,501 Americas 37,508 47,264 61,097 75,538 85,874 90,270 0.0% 2012 2013 2014 2015 2016 2017 Taiwan 23.7% 22.7% 22.6% 22.5% 23.7% 23.5% Korea 25.3% 25.7% 23.3% 21.0% 19.8% 18.9% Japan 13.9% 13.4% 12.1% 11.2% 10.2% 9.1% EMEA 8.8% 9.0% 9.9% 10.2% 9.9% 9.7% China 19.9% 20.4% 22.6% 24.9% 25.9% 28.2% Americas 8.5% 8.8% 9.5% 10.2% 10.5% 10.5% 26
Taiwan Volume As packaged LED demand for lighting devices started increasing in 2013, the market is forecast to grow by two digits until 2015. LED silicone encapsulant market forecast in Taiwan (Kg) 250,000 25.0% 200,000 150,000 20.0% 15.0% 100,000 10.0% 50,000 5.0% 0 2012 2013 2014 2015 2016 2017 Demand 104,628 121,772 145,013 167,319 192,870 201,060 Growth rate 16.4% 19.1% 15.4% 15.3% 4.2% 0.0% 27
Volume by type With the rising demand for LED lighting products, demand for methyl silicone encapsulants will steadily increase to make up 50% of the total encapsulant market in 2017. Volume of methyl silicone encapsulants is forecast to more than double to 92 tons in 2016 from 45 tons in 2012. LED silicone encapsulant market forecast by type in Taiwan (Kg) LED silicone encapsulant market forecast by type in Taiwan (%) 250,000 100.0% 90.0% 200,000 150,000 80.0% 70.0% 60.0% 50.0% 100,000 40.0% 30.0% 50,000 20.0% 10.0% 0 2012 2013 2014 2015 2016 2017 Others 739 968 4,187 5,505 9,624 12,046 methyl 45,474 55,671 67,852 76,359 92,147 98,511 phenyl 58,415 65,134 72,975 85,455 91,098 90,503 0.0% 2012 2013 2014 2015 2016 2017 Others 0.7% 0.8% 2.9% 3.3% 5.0% 6.0% methyl 43.5% 45.7% 46.8% 45.6% 47.8% 49.0% phenyl 55.8% 53.5% 50.3% 51.1% 47.2% 45.0% 28
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