LED Front End Equipment Market 2014 Report by Yole Developpement

Copyrights © Yole Développement SA. All rights reserved.
© 2014 1
75 cours Emile Zola, F-69001 Lyon-Villeurbanne, France
Tel : +33 472 83 01 80 - Fax : +33 472 83 01 83
Web: http://www.yole.fr
LED FRONT-END EQUIPMENT MARKET
A Comprehensive Survey of LED Front-End Equipment Business,
Covering Main Trends, Industry / Market Structures and Market
Metrics
SAMPLE VERSION

© 2014 2
About the Author of the Report
Pars MUKISH - Senior Analyst
Pars MUKISH holds a Master of Materials Science & Polymers and a Master of
Innovation & Technology Management (EM Lyon - France).
He works at Yole Développement as a Senior Market and Technology Analyst in the
fields of LED, Lighting Technologies, Compound Semiconductors and OLED to carry
out technical, economic and marketing analysis.
Previously, he has worked as Marketing and Techno-Economic Analyst for several
years at the CEA.
Pars MUKISH is also author / co-author of the following reports:
• LED Packaging
• Status of the LED Industry
• LED in Road and Street Lighting
• OLED for Lighting
• UV LED Technology and Application Trends

© 2014 3
Objectives of the Report
• To better understand LED Front End manufacturing
technological trends.
• To better understand equipment industry for each
process step.
• To better understand who is doing what, and
specificities of each market.
• To provide market metrics both at LED and material
/ equipment levels.

© 2014 4
Company Index
Advanced System Technology, Advantools Semiconductor, Aixtron, Akzo Nobel HPMO, Albemarle, Altatech,
AMEC, AMO GMBH, Annealsys, ASM Pacific Technology, ASML, AST, Aurora Sapphire, Aurotek, Beta Squared,
Bridgelux, Cambridge Chemicals, Canon, Cascade Microtech, CETC, Chemtura and UP Chemicals, Chroma,
Corial, Crystal Applied Technology Inc., Crystaland, Crystalwise, C-Sun, DK Aztec, Dow Chemical, Elmos,
Eplustek, Eulitha, Evatec, EVG, First Nano, Fulintec, GR-Litho, GTAT, Guangdon Real Faith Semiconductor
Equipment, Hansol Technics, Iljin display, InVacuo, Japan Science Enginneering (Dai Nippon Kaken), JT
Corporation, KLA Tencor, Lattice Power, Leybold, LG, Lumileds, Maxis, MC-Lithography, Molecular Imprints,
Monocrystal, Namiki, Nanonex, NATA, Neutronix-Quintel, Nikkon, NMC, North Microelectronics, Novellus,
Nuflare, Obducat, Oerlikon, Orbotech, Osram, Oxford Instruments, Panasonic, Plasma-Therm, Plessey
Semiconducors, Plustek, Procrystal, Qingdao Jason Electronic, QMC, Rubicon, Rudolph Technologies, SAFC
Hitech, Samco, Samsung, Sapphire Technology, Screen, Seoul Semiconductor, Sharp, Sheng Optical
Equipment, Silian Sapphire Corporation, Sky Technology Development, SmaTeK, SNTEK, Soraa, SPTS, StarArc,
Structured Materials Industries, SUSS Microtec, SVTA, Tainics, Tamarack Scientific, Taiyo Nippon Sanso,
Technology & Science Enabler, TEL NEXX, Temescal, Tera Xtal Technology, Ultratech, ULVAC, Ushio, USI
Optronics Corporation, Valence Process Equipment, Veeco, Yongsheng Semiconductor Equipment (…).

© 2014 5
LED Industry is Entering its 3rd Growth Cycle
1st Cycle
• Growth of the LED industry came initially from the small LCD displays and keypad backlighting for cell
phones.
2nd Cycle
• And was driven forward by the LCD display application.
– LED TV was expected to be the LED industry driver for 2011, but the reality was quite different due to: lower sales of
LCD TVs, lower than expected adoption rate of LED, and lower number of LEDs per TV set.
– This situation, mixed with the entry of several new players (mostly from Asia), created a climate of overcapacity,
price pressure, and strong competition. As a consequence, packaged LED volumes were about 30% lower than
expected and revenue shrank due to strong ASP pressure.
3rd Cycle
• In 2012, most companies have started to move to the new “El Dorado” of the LED business: General
Lighting, which represents the next killer application. In 2013, LED technology has really spread beyond
general lighting with the LED penetration rate > 4% in some applications - such as residential lighting,
commercial lighting, and road and street lighting. However, to enable massive adoption of the
technology, LED-products still require a cost decrease.

© 2014 6
General Lighting
Drivers for Adoption - Upfront Cost
Currently, upfront cost of LED-based lighting is still too high to fully compete with incumbent
technologies.
→ Real need to reduce the $/lumen!
1. Depending on geographical region and availability of subsidies/rebates- Price listed is worldwide average
Incandescent
< $1
Fluorescent
~ $3-$5
LED
~ $10 - $501
Comparison of Average Selling Price of Different Lamp Technologies
All sources are ~ 800 lumens, warm, white and tier-1 brand only

© 2014 7
Cost Structure of Lighting Products
Analysis
• LED packages represents 25% to 45% off the total cost of LED-based lighting products (lamp, luminaire,
tube…) depending on the application, the performance required, the type of product (…).
– In our 2011 analysis, LED packages represented 30% to 60% of the total cost of LED-based lighting products.
– This decrease is due to reduction of LED ASP, increase of LED performance (lm/W), and wider use of middle power
LEDs in General Lighting applications (mostly for residential and commercial applications).
Packaged LED still represents a large opportunity for cost reduction!

© 2014 8
Front End Cost Aspects
1W Packaged LED Cost Analysis
• Front-end manufacturing represents 48% of the cost of the 1W packaged LED analyzed in this example.
• At 33% of the total Front-End cost, epitaxial layers (grown by MOCVD) represents the single largest cost
reduction opportunity.
• However, substrates (in this case sapphire + a carrier wafer on which the epiwafer is subsequently
bonded to) also represent a significant fraction (25%).

© 2014 9
Front-End Manufacturing Process Flow
Example - MESA Structure (1/2)
• Multiple variations are possible for the structure, the contact and pad materials, thicknesses (…). Actual
process flow can also vary based on manufacturer’s engineering preferences, available equipment (….).
• The next slide illustrates the process flow for the generic MESA structure presented below:
1. Not to scale
Transversal view1 3D view (passivation layer not shown)1
n-GaN
(3-5 µm)
p-GaN (0.1-0.5 µm)
MQW (15-80 nm)
Passivation
(SiO2 : 300 nm)
Anode Pad
(Ti:30 nm / AuSn: 2µm)
Transparent contact
(ITO: 245 nm)
Cathode Pad
(Ti:100nm / Au:2µm)
Sapphire Substrate
(80 µm after back thinning)
n-GaN
Active layers
(MQW)
p- GaN
Contact layer

© 2014 10
Technology Highlights
LED Substrates - GaN and Si (1/2)
• GaN-on-Si LEDs aims at improving solid-state lighting Cost of Ownership (COO) by reducing the
component manufacturing cost.
– The success of GaN-on-Si LEDs will depend on development of associated LEDs performance (which should at least
be equal to GaN-on-Sapphire LEDs) and development of manufacturing techniques (allowing to capitalize on
depreciated CMOS fab).
• GaN-on-GaN LEDs purports to reduce COO by improving the quantity of light per die area, and therefore
allow cost reduction at the system level through reduction of the number of packages.
– The success of GaN-on-GaN LEDs will depend on the availability of 2” and 4” GaN substrates in large volumes and at
a lower cost than currently available.
COST =
$
LUMEN
Manufacturing Efficiency
• Higher equipment throughput and
yields
• Economy of scale
LED Performance
• Higher efficiency (lumen/W)
• More light per chip (driving current)
GaN-on-Si LEDs
→ Reduce component
cost
GaN-on-GaN LEDs
→ Improve performance
by reducing the number
of packages per System

© 2014 11
GaN-on-Si LEDs
Performance and Commercial Status - Overview (1/2)
In development
(no release date)
Dec. 2013
Company F
XX lm/W
Jul. 2013
Plessey LED
PLW111010
36 lm/W30
60
120
150
180
0
Company C
XX lm/w
Apr. 2013
• Low and Middle power
package, cold white
(5000-5500k).
• Best performance
based on company
claims.
Company
A
XX lm/W
Everlight
L62-217D
150 lm/W
Osram
Lab result
104lm/W
Lumileds
Luxeon 3535 2D
150 lm/W
Toshiba
TL1F2
XX lm/W
Sapphire
Silicon
Company
B
XX lm/w
Company
E
XX lm/W
90
Cree
Lab
> 200 lm/w
Company D
XX lm/W
*Available as die. Lm/w of white package LED is extrapolated
March 2014

© 2014 12
GaN-on-GaN LEDs
Status
Many companies are investigating GaN-on-GaN LEDs (Osram, Samsung, TSMC, Lumileds…). Only 3
have entered into real production: Panasonic, Soraa and Seoul Semiconductor.
Panasonic Soraa Seoul Semiconductor
• GaN-on-GaN LEDs since 2007.
• Main applications: cell phone
flash and automotive lighting.
• MR16 LED bulbs based on in-
house manufactured GaN on GaN
LED available
• “n-Pola” LED based actually
based on c-plane GaN substrates
for now;
• Mass production to have started
in April 2013.
• Mitsubishi / Verbatim MR16.

© 2014 13
Toward Larger Diameter Wafers
Incentive - Focus on Manufacturing Cost (3/3)
• This indicates that the transition to 6” can be beneficial for LED makers with strong experience and “world
class” manufacturing practices.
Source: Philips Lumileds (June 2013)
Last 2 Quarters of 3”
Manufacturing (mix)
150mm Manufacturing
Only

© 2014 14
LED MOCVD Reactor Industry
Strategy of New Entrants (2/3)
Focus on heating system:
• Different heating system are developed by new entrants. Companies such as ADP Eng. Or Top Eng. Are
working on resistance heater whereas Jusung Eng. or Wonik focus on induction heater. Kanthal ‘FeCrAl)
heater are also developed -e.g.: Kokusai Electric Korea).
• The objective is to have better temperature ramping (through low temperature mass for example) and so
decrease MQW growth cycle time.
In 2012 and 2013, MOCVD price war was initiated by leaders to increase barrier entry. As a result,
new entrants are working on new reactor design to attract customers.
Parameter A  XX
Parameter B  XX
Automation (…)
Reactor
Design
Parameters
Heating system  To decrease growth time

© 2014 15
LED MOCVD Reactor Market
Revenue Forecast (2009-2020) - GaN vs. InGaAlP
March 2014
SAMPLE - DATA ON THE REPORT

© 2014 16
Other LED Front End Equipment
Market Size
March 2014
SAMPLE - DATA ON THE REPORT

© 2014 17
TMG
ASP - Overview
• TMG price increased in 2010 and 2011 due to the rapidly growing LED market which has led to a shortage
of TMG.
• In 2013, ASP is much more lower: $XX to $XX per gram for large orders (100+ kg).
• And ASP decrease is likely to continue with the growth of production capacity.
TMG ASP has strongly decreased since 2010 due to large overcapacities. It is currently in the range
of $XXto $XX per gram.
2010 2011 / 2012 2013
$2.5
to
$4
$XX
to
$XX
ASP($/g)
3
2
1
5
4

© 2014 18
Lithography for LED Chip Manufacturing
Equipment Suppliers - LED Dedicated Equipment
Main suppliers of dedicated LED lithography systems are presented below:
Company
Contact /
Proximity
Stepper Full Field Comments
COMPANY A X
• Also own “Index Technology” (a JV
with Ball Semiconductor for the
development of maskless systems)
COMPANY B X
• Collaboration with XX on
Displacement Talbot Lithography
(DTL)
COMPANY C X
• “NXQ8006 Sapphire” model for
LED manufacturing
X X • XX
COMPANY D X
• First LED-dedicated system
“Sapphire 100” introduced in late
2009
X • XX

© 2014 19
Physical Vapor Deposition for TCLs and Metals
Synthesis (2/3)
• Intra-batch homogeneity and batch-to-batch repeatability are critical, and often require to be within
+/- 3%.
• Due to the low thickness of most of the layers, deposition time is fairly quick. Cycle times are therefore
driven by pumping, heating, cooling and handling (loading / unloading). This creates a strong incentive for
low temperature processes as well as for higher automation in loading and transferring wafers.
• Pumping time can vary from 15 to 30 minutes depending on chamber size and pumping equipment. Temperature ramp-
up depends on process.
• Loading time can be reduced by using multiple sets of wafer carriers that are preloaded outside the machine and
swapped.
• Misc. includes rough reactor cleaning, changing deposition monitor quartz, replenishing the source material crucible (…).
T0
Deposition
10 min 40 min 46 min 60 min 70 min 80 min
Example for a 250 nm metal layer deposition.
Reactor
Loading
Pumping + Temperature ramp up Cooling / Venting Unloading Misc.

© 2014 20
75 cours Emile Zola, F-69001 Lyon-Villeurbanne, France
Tel : +33 472 83 01 80 - Fax : +33 472 83 01 83
Web: http://www.yole.fr
Yole Développement and LED Activity

© 2014 21
Yole Développement
Field of Research Activity
• Yole Développement is a market research and strategy consulting company founded in 1998.
• We are involved in the following areas:
• Our research is performed by in-house personnel conducting open-ended discussions based on
interviews.
– 30 full time analysts with technical and marketing degrees.
– Primary research including over 3,500 interviews per year.
Photovoltaic
Microfluidic & Medical Technologies
MEMS & Image
Sensors
Wafer & Substrates
Power Electronics
LED, OLED and Laser Diode
Advanced
Packaging

© 2014 22
Yole Développement
4 Business Models
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© 2014 23
LED Activity
Yole is Active All Over the LED Value Chain
We are active all over the value chain! And we interview industrial / R&D players from each level!
Substrate Front-end Level 0 - Epitaxy
• Nucleation layer
• N-type layer
• Active layers (MQW)
• P-type layer
SiC / Sapphire / Silicon /
Bulk GaN / Composite
substrate
LED epi-wafer
Mesa LED structure
Flip Chip LED structure
Vertical LED structure
LED dies-on-waferLED dies
Back-End level 1 - Packaging
• Die Attach & Interconnections
• Phosphors
• Encapsulation & optics
• Testing & Binning
Packaged LEDs
Front-end Level 1 - Device Making
• Inspection
• Masking / Lithography
• Etching
• Metallization / Contacts / Mirrors
Back-End Level 0 - Packaging
• Substrate separation & Bonding
• Die singulation
• Testing & Binning
LED systems and applications

© 2014 24
LED Activity
About Yole’s LED Analyst Team
Dr. Philippe ROUSSEL - Business Unit Manager
Philippe ROUSSEL holds a Ph-D in Integrated Electronics Systems from the National
Institute of Applied Sciences of Lyon (INSA - France). He joined Yole Développement
in 1998 and is Business Unit Manager of the Compound Semiconductors, Photovoltaic,
LED and Power Electronics department.
Dr. Eric VIREY - Senior Analyst
Eric VIREY holds a Ph-D in Optoelectronics from the National Polytechnic Institute of
Grenoble (INPG - France). In the last 12 years, he has held various R&D, engineering,
manufacturing and marketing positions with Saint-Gobain. Most recently, he was
Market Manager at Saint-Gobain Crystals, in charge of Sapphire and Optoelectronic
products.
Pars MUKISH - Senior Analyst
Pars MUKISH holds a master degree in Materials Science & Polymers and a master
degree in Innovation & Technology Management (EM Lyon - France). He works at Yole
Développement as Market and Technology Analyst in the fields of LED and Lighting
Technologies to carry out technical, economic and marketing analysis. Previously, he
has worked as Marketing and Techno-Economic Analyst for several years at the CEA.

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