LED Industry: China leaps as India sleeps

[Raj30]

LED Industry: China leaps as India sleeps - Moneylife Personal Finance site and magazine

Out of India's total use of electrical power, over 60% in domestic and commercial area is for lighting. As India continues to sleep, China is today lighting up many Indian homes and commercial premises through Indian LED trading businesses

While the Indian government is busy with non-issues, globally the light emitting diode or LED industry is rapidly growing and China leads the pack claiming huge share in global production. Having started with downstream end of the LED industry that handles packaging, testing and application, it is now fast gaining grounds in the middle stream industry like chip processing and also in the upstream of the industry that includes producing mono-crystalline LED chips and epitaxial wafers. In India, development of this industry is left to small players in the private sector with little initiative from the government. We seem to be just ignoring the future.

Why is LED important for India?
LED or Light Emitting Diode turns electrical energy into luminous energy and does it so efficiently that it gives nine times the light than the filament bulbs we use. Compared to CFL lights its light output is three times! LED can emit visible light in various colours such as super bright white, yellow, green, blue, etc, as well as invisible light, such as infrared and ultraviolet light. In other words, for the same light output, it consumes just one-ninth the power compared with a small incandescent bulb and one-third of a CFL lamp, LED light sources also have a very long life and possess far higher reliability. That means today's 11W LED light will give same light output in Lumen as 100W conventional filament bulb. See the table below for the comparison and merits.

Thus LEDs will help us reduce our power demand tremendously. Our power needs will sharply reduce since 60% of the electrical energy used in India is for lighting. This will eliminate the need for us to turn to dangerous and expensive nuclear energy and enrich the western multinationals like those in France or the US. LED prices are continuously dropping. As the volume goes up they will drop further. It is predicted that in the next 10 years, one might see LED prices as low as or cheaper than the conventional light sources. Unfortunately the Indian government and industry has so far ignored to make it our priority.

LED lighting business in India has grown 50% each year since 2008. It was about Rs850 crore in 2011 and is likely to reach Rs1200 crore in 2012 according to the LED companies in India. Most of these products are imported from China!

China LED Industry gallops to Rs 25,000 crore in 2011

Taking full advantage of the government support, China's LED industry has logged over Rs25,000 crore in sales by offering a wide range of innovative products. This is 23% more than in 2010. (NYSE: IHS). They are poised to grow almost double to Rs46,000 crore by 2015. India could have taken a big share in this had we taken the initiative in 2007 when the author send his first alert to the government.

The LED market covers LED bulbs, LED displays, traffic signals, LED for automotive use, LCD backlighting, handset key pads, digital still camera flashlights, decorative lighting, street lighting and general illumination. A new demand driver for LEDs in the medium to long-term will be the general lighting market. Given the global trend to reduce carbon emissions, China's demand in the general lighting segment will be strong for LEDs, which offer low-power consumption and are environmentally safe. The Chinese, however, are not happy since most of LED wafers are to be imported which indeed have the largest value addition. China trails due to the lack of technological and research and development (R&D) capabilities but its government is liberally financing local R&D as well as encouraging foreigners to set up plants in China. China's LED players enjoy ample funding from the government. It subsidises at least 70% of the purchase price for metal organic chemical vapour deposition equipment employed in LED manufacturing. Furthermore, tax and utility payment benefits are offered to encourage investments in the domestic LED industry, proving to be an additional boon for local players.

In 2012, the Chinese LED industry has formed the basically complete industrial chains, covering the LED inside, epitaxial wafer, chip package and application. At present, China has over 1,100 LED enterprises specializing in the downstream packaging and application. But the development of the epitaxial wafer and chip in China is comparatively backward. There are only about 10 enterprises engaged in the production of the epitaxial wafer for LED, as well as few chip manufacturers.

There is yet another important reason why the Chinese are keen to go upstream. In the industrial chain of light emitting diode, epitaxial wafer and chip account for about 70% of profits and the packaging accounts for just 10% to 20% of profits, with 10% to 20% held by application field.

Indian Scene:

In spite of the availability of cheaper technical manpower than China, India has little manufacturing of LEDs; none at the mono-crystalline chip level, none at packaging chips into sources for lighting in various forms and very small application level, mostly from kits from China. India's LED product sources are just traders of (mostly) Chinese end products.

The Government of India is too busy with politics of one-up-man-ship that it is not even thinking of any plan. The investor community has sheep-herd mentality and that's why we see so much unwise investment in downstream levels of PV Solar. There would soon be bankruptcies in that sector. Even the PV cell manufacturers in India are today trading products from China and Taiwan. China too will see even more serious crash.

No one seems to look at basics. Out of India's total use of electrical power, over 60% in domestic and commercial area is for lighting. LEDs are basically just like sand so its prices will continue to fall as the high initial investments get depreciated and competition drives down the prices. Notice that there is 70% value addition today at the chip level in LEDs.

As India continues to sleep, China is today lighting up many Indian homes and commercial premises through Indian trading businesses. Well-known Indian and foreign brands sold in India get their branded Indian products from China. What a pity Dr Manmohan Singh!

PS Deodhar is founder and former chairman of the Aplab Group of companies. He is also the former chairman of the Electronics Commission of the Government of India and was an advisor to late Prime Minister Rajiv Gandhi on electronics. He also was the chairman of the Broadcast Council in 1992-93 that set in motion the privatisation of the electronic media with metro channels

 

[Predator]

so what is the solution? he suggests nothing. would a LED policy be helpful in this regard? and wouldn't these LED's with embedded chips be susceptible to EMP attacks?

 

[Ray]

Crouching Tiger, Hidden Dragon (Wo hu cang long)

 

[balai_c]

Deleted, redundant.

 

[balai_c]

Possible steps to undo the damage already done:

1) Promote the set up of polysilicon wafer fabs, announce tax holidays for atleast 10 to 20 years. Set up large townships, replete with assured 24*7 power , water and good quality world class roads. These should be supplemented with world class ports, for quick and efficient outgoing shipment of finished merchandise.

2) Be ready to dish out big money, and create an investor friendly climate, with low corruption, and quick addresal of applications.

The fact is LED is just one part of the high capital, high tech, business of electronic products. India can be a part of world if she is ready to put her money where her mouth is. Polysilicon wafer is the the heart and soul of the electronic industry. And setting up plants of polysilicon wafer is obscenely expensive to say the least. A standard plant manufacturing LED would need an investment of alteast 800 to an 1000 crore rupees. And that does not include the polysilicon foundry!To offer some perspective, a fab of the caliber of Intel or AMD would require an investment of ateast 1 to 2 billion dollars.There a handful of countries manufacturing polysilicon, and among them making for microchips are even more high tech. India does not have foundrys even for something as low tech as solar panels, where all the polysilicon ingots are imported from taiwan.

India missed the microelectronics bus in the early 1970's. We can be back in the game, but that would require big money and big efforts.

 

[Raj30]

Show bill, buy LEDs at half price from tomorrow - Times Of India

NEW DELHI: Energy efficient but toxic compact fluorescent lamps (CFLs) now have competition in the city. The government is promoting LED ( light emitting diode) lights that are not only more efficient than CFLs but also safe to dispose of as they do not contain mercury. So far, high prices have kept LED lights from becoming popular (they cost nearly five times more than CFLs) but the government is considering tax breaks to make them cheaper.

Chief minister Sheila Dikshit says promoting LEDs, which use a tenth of the power used by incandescent bulbs, has become important in the light of skyrocketing power demand. Delhi's power demand has risen from 2,000 MW in the year 2000 to 5,600 MW at present.


"We would like to promote LED bulbs by granting some concession in VAT. Further, the government will shift from ordinary or CFL lighting to LED lighting for streets in the entire city and also in all government offices," says the CM.

Although they last about five times longer than CFLs, LEDs cost 8-10 times more. In a scheme open to all Delhiites, the discom BSES will sell LEDs at a 50% discount, starting at Rs 399 for a 7W light.

Monday onwards, customers can visit BRPL's customer care centres, show a copy of their electricity bill and purchase up to four LEDs at a time. The lights will come with a three-year replacement warranty.

"LED bulbs and tube lights will fit perfectly in existing sockets. When compared to a CFL, they use 50% less electricity, contain no arsenic and mercury, and are unbreakable. They also have a significantly longer life span than both CFLs and incandescent bulbs. A 7W LED bulb consumes 50% less electricity than an equivalent CFL and 85% less than an equivalent incandescent bulb. The annual cost of running a 7W LED bulb is just Rs 150 against Rs 271 for a CFL and Rs 612 for an incandescent lamp," said a discom representative.

However, LEDs come with their own set of problems. Experts point to studies that have found high levels of copper, nickel and lead in them.

"The government went all out to promote CFLs a few years back without giving a thought to the consequent problems of safe disposal. We should not end up with similar issues with LEDs. Problems have also been raised with the efficiency of LEDs for home lighting. Research has indicated that LEDs function most efficiently at low currents. For home lighting, the current is higher. That means the same amount of light for a higher current, leading to less efficiency," an expert told TOI.

 

[balai_c]

Physics of LED:

Physics

The LED consists of a chip of semiconducting material doped with impurities to create a p-n junction. As in other diodes, current flows easily from the p-side, or anode, to the n-side, or cathode, but not in the reverse direction. Charge-carriers—electrons and holes—flow into the junction from electrodes with different voltages. When an electron meets a hole, it falls into a lower energy level, and releases energy in the form of a photon.

The wavelength of the light emitted, and thus its color depends on the band gap energy of the materials forming the p-n junction. In silicon or germanium diodes, the electrons and holes recombine by a non-radiative transition, which produces no optical emission, because these are indirect band gap materials. The materials used for the LED have a direct band gap with energies corresponding to near-infrared, visible, or near-ultraviolet light.

LED development began with infrared and red devices made with gallium arsenide. Advances in materials science have enabled making devices with ever-shorter wavelengths, emitting light in a variety of colors.

LEDs are usually built on an n-type substrate, with an electrode attached to the p-type layer deposited on its surface. P-type substrates, while less common, occur as well. Many commercial LEDs, especially GaN/InGaN, also use sapphire substrate.

Most materials used for LED production have very high refractive indices. This means that much light will be reflected back into the material at the material/air surface interface. Thus, light extraction in LEDs is an important aspect of LED production, subject to much research and development.

Bare uncoated semiconductors such as silicon exhibit a very high refractive index relative to open air, which prevents passage of photons at sharp angles relative to the air-contacting surface of the semiconductor. This property affects both the light-emission efficiency of LEDs as well as the light-absorption efficiency of photovoltaic cells. The refractive index of silicon is 3.96 (590 nm)[35], while air is 1.0002926.[36]

In general, a flat-surface uncoated LED semiconductor chip will emit light only perpendicular to the semiconductor's surface, and a few degrees to the side, in a cone shape referred to as the light cone, cone of light,[37] or the escape cone.[38] The maximum angle of incidence is referred to as the critical angle. When this angle is exceeded, photons no longer penetrate the semiconductor but are instead reflected both internally inside the semiconductor crystal and externally off the surface of the crystal as if it were a mirror.[38]

Internal reflections can escape through other crystalline faces, if the incidence angle is low enough and the crystal is sufficiently transparent to not re-absorb the photon emission. But for a simple square LED with 90-degree angled surfaces on all sides, the faces all act as equal angle mirrors. In this case the light can not escape and is lost as waste heat in the crystal.[38]

A convoluted chip surface with angled facets similar to a jewel or fresnel lens can increase light output by allowing light to be emitted perpendicular to the chip surface while far to the sides of the photon emission point.[39]

The ideal shape of a semiconductor with maximum light output would be a microsphere with the photon emission occurring at the exact center, with electrodes penetrating to the center to contact at the emission point. All light rays emanating from the center would be perpendicular to the entire surface of the sphere, resulting in no internal reflections. A hemispherical semiconductor would also work, with the flat back-surface serving as a mirror to back-scattered photons.

Source: Wikipedia-LED

 

[balai_c]

India can manufacture limited quantities of Gallium Arsenide, which is used in the radar programmes, has most possibly set up a fab, but I do not know about the foundry. They are possibly trying to create plants for GaN too, I doubt if their technology can be scaled up to meet commercial demands. But the even more pertinent doubt is if the miserly Indian business establishment be ready to shell out really big cash in a field where return is not assured?

 

[ani82v]

Possible steps to undo the damage already done:

1) Promote the set up of polysilicon wafer fabs, announce tax holidays for atleast 10 to 20 years. Set up large townships, replete with assured 24*7 power , water and good quality world class roads. These should be supplemented with world class ports, for quick and efficient outgoing shipment of finished merchandise.

2) Be ready to dish out big money, and create an investor friendly climate, with low corruption, and quick addresal of applications.

The fact is LED is just one part of the high capital, high tech, business of electronic products. India can be a part of world if she is ready to put her money where her mouth is. Polysilicon wafer is the the heart and soul of the electronic industry. And setting up plants of polysilicon wafer is obscenely expensive to say the least. A standard plant manufacturing LED would need an investment of alteast 800 to an 1000 crore rupees. And that does not include the polysilicon foundry!To offer some perspective, a fab of the caliber of Intel or AMD would require an investment of ateast 1 to 2 billion dollars.There a handful of countries manufacturing polysilicon, and among them making for microchips are even more high tech. India does not have foundrys even for something as low tech as solar panels, where all the polysilicon ingots are imported from taiwan.

India missed the microelectronics bus in the early 1970's. We can be back in the game, but that would require big money and big efforts.

If there is half chance of this happening in India it would be only because of Narendra Modi. Though I am not a big fan of personality cults but sadly there are not many choices.

 

[tony4562]

This is a lame-duck article. What for? That China has a huge leg up on India in terms of manufacuring capabilities, is an established fact. Neither is the LED industry the only kind manufacuring where China has a huge presence internationally and India has none of it. Why not lament about shipbuilding, precision-machinery, solar panel, consumer electronics, construction materials, etc, etc. The author could even lament on why Boeing and Airbus dominate the sky while India can't even produce the smallest passenger plane.

You don't need to scratch the head for an answer because the answer is already there: that's the way it is.

 

[Sea Eagle]

Not only LED but also in semi conductores and microprocessers china is years ahead of us

 

[cobra commando]

^ You like LED lights Fo Real ?!? I like LED lights too ! LED lights i use in ma car ma bike ma kitchen, hell, even in ma toilet Yo ! LED lights saves teh day

 

[t_co]

What's really puzzling is why the author keeps harping on 'China does this' as a justification for India to do something, rather than a more straightforward argument that the LED industry can bring much-needed high-skill manufacturing jobs to India...

 

[no smoking]

What's really puzzling is why the author keeps harping on 'China does this' as a justification for India to do something, rather than a more straightforward argument that the LED industry can bring much-needed high-skill manufacturing jobs to India...

Because putting the word "China" into his article would bring far more attentions from readers.