“Packaging cost reduction is driving new technology and design adoption”, announces Yole Développement

Emergence of new design and technologies
Depending on the device type, packaging can represent 40% to 60% of LED total cost. As such, packaging represents the single-largest opportunity for cost reduction, which is required in order for the industry to access the “Holy Grail” that is General Lighting. However, if you’re expecting this cost reduction to come from standardization, you can abandon all hope. The creativity of LED engineers and specificities of each application have led to an infinite number of package type and formats:
Single or multiple chips, low and middle-power Plastic Leaded Chip Carrier (PLCC), ceramic-based high-power LED, small and large arrays, Chip On Board (COB), etc. This profusion of styles is inhibiting LED manufacturing cost reduction by multiplying the Stock Keeping Unit (SKU), thus preventing standardization of the manufacturing process and the associated economies of scale.

In this context, LED manufacturers are reacting by developing new manufacturing philosophies/concepts, such as:
- “Design for manufacturing”, which consists of trying to simplify and standardize elements whenever possible, and push differentiation as far downstream as possible in the manufacturing process.
- “Design for cost”, which consists of favoring cost of ownership or cost per lumen over end-performance.

“Technological developments are also impacted by the quest for cost reduction, and LED manufacturers are now searching for equipment and/or materials with the right mix between cost and performance”, explains Pars Mukish, Technology & Market Analyst, LED at Yole Développement. As a matter of fact, equipment and materials suppliers are proposing more and more equipment and materials that fit these requirements, i.e. laser-based dicer, low-cost ceramic package substrate, etc.

In the end, LEDs are going mainstream but are still not a mature commodity! This is good news for the entire industry, since design and materials innovation still provides opportunity for differentiation. All of this benefits the consumer, who receives budget-friendly, environmentally-friendly and increasingly credible LED-based alternatives for replacing traditional light sources.

Yole Développement’s report represents a comprehensive overview of all technological aspects of LED packaging. It describes each step of the packaging process flow, discusses the associated technological breakthroughs, provides a summary of key players, and much more!

The LED packaging materials market will enjoy a 20% CAGR during the period 2012 - 2017, driven primarily by package substrate and phosphors.

The package substrate market will attain a CAGR of 20% over the aforementioned period, growing to
nearly $900M by 2017. Concerning LED phosphors - despite strong price pressure, the associated market will also enjoy double-digit growth, with a CAGR of 20% during the period 2012 - 2017.