LED Costs Drop Faster than Roadmap, but Not Fast Enough

DOE SSL Manufacturing R&D Workshop:

 

LED Costs Drop Faster than Roadmap, but Not Fast Enough
More Aggressive Effort Needed to Enable Lighting Market by 2013-2015

By Paula Doe, SEMI Adjacent Markets

The LED sector has improved its lumens-per-dollar performance faster than original roadmap goals set two years ago — but experts gathered at the recent U.S. Department of Energy Solid State Lighting Manufacturing R&D Workshop in Boston concluded the industry now needs to reduce cost per lumen even more aggressively to enable a real market for general LED lighting within the next three to five years. Companies reported significant progress towards more efficient manufacturing, and lots of ideas for more improvements.

Faster than expected growth in the booming LED backlight market means demand may be approaching saturation sooner than originally expected, while the crowd of new market entrants continues to increase supply. The LED market jumped by 55 percent in 2010 to $9.9 billion, reported IMS Research analyst Ross Young, forecasting an $18 billion market by 2015. But growth for the TV segment that accounts for about 70 percent of the total market started to flatten out in the second half of 2010, as over-supply pressured prices, and new technologies allowed set makers to reduce the number of die per set. But the good news, says Young, is that the trend is now to use more LEDs per unit at the high end of the TV market, for direct backlights as well as new hybrid backlight technology which offers a thin form factor as well as segmented dimming translating to higher contrast. With the TV market also moving towards 3D and 3D approaches blocking 60-80% of the light, higher brightness will be required resulting in more LEDs. In addition, as tablets move to higher resolution displays which is expected in the iPad 3, the number of LEDs is also expected to increase contributing to growth in backlighting through 2013.

Workshop photo

“For 2011-2012, supply is growing twice as fast as demand,” argued Young, noting the over-investment by Chinese government entities in tool subsidies, free land and tax breaks. “This supply is coming in place before the lighting market is ready.” With merchant sales reaching around 800 in 2010 and expected to exceed 1000 in 2011, significantly larger than intrinsic demand of 450 tools in 2010 and 700 between 2011 and 2012, the LED market is facing a significant oversupply which should result in a significant reduction in MOCVD tools in 2012 when much of the MOCVD subsidies in China are expected to expire.  Once significant bans on incandescent lighting start to phase in around 2013-2014, the lighting market for LEDs should take off — if costs have come down enough to compete with fluorescents. Between now and then, expect strong pressure on margins, lots of consolidation and domestic content requirements in China, and a collapse in the market for off-spec die.

If LED makers turn their capacity from displays to light bulbs, there’s currently enough LED capacity already installed to make 1 billion 60W light bulbs a year, noted B.J. Lee, chairman of Epistar.  Quality of these backlight chips is a little lower than that required for lighting – somewhat colder light, lower power, red and green phosphors instead of yellow — and a wider range of chips from a run can be used by mixing the different wave lengths in lightbars. But Lee estimated that current prices of these volume devices would translate to about 300 lumens per dollar for lighting, when adjusted for the necessary changes in phosphor and loss in the lighting system. So to sell an 800 lumen LED light bulb, equivalent to a 60W incandescent, for a reasonable $8 to $10, he figured the packaged LED itself will need to reach 500lm/$ by 2015. “We have to solve this problem,” argued Lee. “If we don’t get to this price, we have a problem.  Can we get there by 2012-2013?”

Bringing Down Manufacturing Costs: Progress on New Approaches and Dedicated LED Production Equipment

Epistar’s approach is to use higher voltage chips, and to mix red LEDs, instead of phosphors, with the usual blue LEDs. The company is currently providing 20-50V devices to the market, to see if users can design better systems around them that improve cost per performance. The company reports 180 lm/W for a lab device using the red and blue LEDs, and Lee said customers are developing products with better performance. Main problem so far is some color shift when the device is first turned on, but the color appears stable after both the red and blue dice warm up. “This approach may get to 500lm/$ by 2013,” he suggested.

Equipment makers Applied Materials, Veeco Instrument, KLA-Tencor and Ultratech, who received funding from the first round of DOE manufacturing research awards, reported encouraging results from developing equipment targeted directly to the needs of this still relatively small market.

KLA-Tencor has increased the sensitivity of its Candela automated inspection tools to be able to detect and map the submicron pits and cracks on transparent sapphire wafers of concern to the LED makers, and developed software to distinguish the killer defects from the nuisance ones and to distinguish more of the root causes of these defects. The tool allows full wafer surface inspection and generates defect maps. The associated defect spatial patterns clearly distinguish MOCVD epi defect sources allowing root cause analysis — as an example, micropits generated from wafer bow problems versus those from particles in the MOVCD pocket – which operators now visually inspecting a limited number of points across a wafer just can’t see. The tool is also used for incoming wafer quality assessment for micro-cracks and other sapphire process defects. “Flagging just the electrical defects in the front end processes could bring 50% total cost savings from process control by 2015, argued Srini Vedula,  GEM/Candela director of marketing, noting as increased income of $1-2 million per month from faster ramp to volume and earlier ROI. The tools are now at customer sites for initial evaluation in high volume production.

Ultratech figures a projection lithography tool designed specifically for the needs of the LED makers can cut lithography costs by 2X. CTO Andy Hawryluk reported on a long list of changes to make an IC tool base into a dedicated LED production tool optimized for better performance at lower cost for that sector’s needs.  Beyond the key feature of adjusting the projection for the warped wafer, other changes include an LED illumination source that’s brighter and lower cost than current mercury arc lamps to improve throughput;  longer infrared wavelength light with greater depth of focus to be able to clearly see the alignment target marks on the rough wafer surface; a new robotic loader for more flexible automation and quick changeover from 2” to 6” wafers for research and production runs; a modified shutter for faster resists; an enclosure to protect the tool from the less stringent cleanroom room conditions of the LED industry. “At half way through the project we’re nearly at the target of 50 percent cost reduction,” said Hawryluk, noting that lithography cost reduction is becoming more important as more complex devices now require up to seven litho steps, up from two a few years ago. He noted that projection lithography gets about 5 percent better yield than proximity tools, which with 5000 die per 4-inch wafer could mean 100 million more die per year, while saving 50 percent on 5-7 litho steps at $1 each at 60 wafers per hour adds up to $250,000 savings per year per tool.

Veeco Instruments reported the near UV pyrometer developed with Sandia can measure GaN temperature directly on the transparent sapphire wafer instead of just in the wafer pocket.   The wafer temperature correlates directly with device wavelength, allowing better control and potentially higher yields. Veeco is working to apply Sandia’s reaction kinetics and Veeco’s fluid dynamics to reactor models to reduce design times.  Senior scientist Jay Montgomery said they found that heating the flow flange to 200°C increased the growth rate and reduced particulate formation, leading to a 30 percent increase in metal organic efficiency and a 40 percent decrease in total flow.

Philips Lumileds reported that its work on GaN on silicon was now getting about the same results as other research groups, with about the same 40 percent wall plug efficiency at 448nm emission wavelength on 3-inch wafers. The project aims to achieve >120 lm/W hot test, single bin warm white LED results on 150mm one year from now, or to match the production results Lumileds achieves on sapphire which continue to improve. Mike Craven, director of strategic materials and devices, technology R&D, reported that GaN on silicon requires a different roughening process, an improved template process, and improved handling requirements.

Cost Reduction Key Areas: Phosphors, Advanced Process Control and Streamlined Systems Integration

Best next options for cost reduction are phosphors, test and inspection equipment, and more streamlined package/module/luminaire manufacturing, according to industry input to DOE and discussions at the workshop.

Intematix EVP and CTO Yi-Qun Li noted that was much room for improving the efficiency of phosphor manufacture. LED phosphors are currently made in small batches with a largely manual process, but volumes are doubling almost every year, and the weighing, mixing, feedling, sintering, milling and washing steps could be automated. Better understanding of the particle formation mechanisms could also improve production and performance. Quantum dots production could also be improved with in situ monitoring for better temperature and process control.

Aixtron’s Rainer Beccard, VP of marketing, argued that in situ and inline metrology for advanced process control remained the key area for to improve epi, though standards would be key to defining and making these measurements precisely. “The most important metrology for MOCVD is wafer temperature measurement resolved in real time,” he said, noting that the metrology tools were available, but they needed to be integrated with the process tools, and made really simple to use. “But there really is low hanging fruit,” he asserted.

Lighting makers tended to see more potential in rethinking the entire system, ideally even   eventually putting the die directly on the heat sink. “The ultimate solution is to get rid of the package, to reduce the number of interfaces and the thermal resistance,” said Steve Paolini, CTO of Lunera. Others similarly stressed the need for fewer parts, automated assembly, and hybrid integration. Gerry Negley, chief technologist at Cree LED Lighting Solutions, noted that Cree had reduced the cost of its second generation CR6 downlight 30 percent from the first version four years before, with all of the bill-of-materials buckets coming down about proportionally. The LED remains about 30 percent of the total cost.

DOE plans to make these topics the priority for its upcoming third round of manufacturing research grants. Winning submissions from the second round have been selected, but the agency is still awaiting the government’s final FY 2011 budget details before it can announce or fund them.  Budget for the program is likely to be reduced.

Cost Reduction also Requires Improved Industry Collaboration, Supply Chain Performance, and Industry Standards

R&D breakthroughs were not the only path toward the new aggressive cost per lumen targets that were discussed at the workshop. Improved industry collaboration, supply chain performance and industry standards were cited as critical contributors to the new roadmap.  Tom Morrow, emerging technologies EVP at SEMI, provided an update on global capital investment trends in LEDs and a progress update in SEMI standards for the LED industry.  Since the inauguration of the SEMI LED Standards Committee in November of last year, three standards task forces have been formed to explore and address cost reduction opportunities in sapphire wafers, automation, and assembly.  Several standards, especially in wafer geometries, communications protocols and carriers have gained solid industry support and appear headed to successful conclusions.  Additional manufacturing standards opportunities are likely to follow.

Roadmapping Costs towards More Aggressive Targets: $2.20/klm by 2015

Current estimations from DOE’s SSL cost- of- ownership committee and the roundtable meeting was that packaging is now down to about 35 percent of the packaged die cost, having dropped more quickly than originally anticipated, and likely to continue to do so.  Epitaxy is about 20 percent of the cost, other wafer processing 20 percent, phosphor 10-15 percent and substrate 10 percent.

Feedback on last year’s DOE cost reduction roadmap called for making it more aggressive, with participants suggesting that the 10X reduction from 2009 packaged LED cost was now needed by 2015, not 2020.  The more aggressive price targets suggested for a warm white LED, in the more appropriate metric of $/klm, are tentatively $18/klm in 2010, $7.50/klm in 2012, and $2.20/klm in 2015.  All these figures may be revised by the final version of the roadmap to be published by DOE in June or July.

DOE continues to work on a cost model for LED manufacturing, to guide the agency and the companies in the sector to most effectively focus their investment for best results. The aim is to make a simple tool for quick analysis, by simplifying a much more detailed cost model from Yole Développement.  “We’re trying for the fewest possible steps to get sensible results,” says Steve Bland, SB Consulting, who oversees the DOE effort.  He and his industry committee have taken out all components that have minor impact on final cost, combined connected steps,  set fixed figures for as many global parameters (like substrate cost, die area, factory overhead) as possible, but added metrology input, to get down to about 20 main steps for the packaged die.  The goal is to eventually make the model widely available for free, and to next extend it to luminaire costs.

HB-LED Program at SEMICON West 2011

The HB-LED program at SEMICON West, July 13 in San Francisco, continues this discussion with a wider range of expert presentations on LED manufacturing technology issues and solutions to bring down costs to create a viable solid state lighting market. Confirmed speakers to date include:  

  • Cree on packaging and systems issues
  • Philips Lumileds on key technology issues
  • Fraunhofer IZM on packaging technology
  • Redwood Systems on intelligent lighting
  • Yole Développement on overall recent progress and next best options for cost per lumen improvement
  • UCSB on mechanisms of droop
  • Veeco Instruments on epi issues for lighting
  • KLA-Tencor on advanced process control
  • Cascade Microsystems on testing issues
  • Intematix on phosphor issues
  • NNCrystal on quantum dot progress 

We’re still juggling the final pieces to balance invited experts with selections from the big stack of excellent submitted abstracts to cover the significant new technical developments across the value chain.

For more information on SEMICON West 2011, visit www.semiconwest.org

Exhibiting Opportunities Available for LED

SEMICON West 2011: Companies with innovative technologies and solutions for LED manufacturing are invited to exhibit at SEMICON West within the Extreme Electronics TechZONE (South Hall). Close proximity to the Extreme Electronics TechXPOT presentation stage plus focused attendee marketing ensures high visibility with visitors focused on and interested in LED technologies. Great opportunities are still available – learn more about exhibiting at SEMICON West and Extreme Electronics!

SEMICON Taiwan 2011: For companies who want to present their technologies and solutions for  LED manufacturing wafer, IC, applications and manufacturing equipment and materials SEMICON Taiwan (September 7-9) will offer a special exhibition area called the  "LED Pavilion. So far, industry players such as Brewer Science, EAG, Force Precision Instrument, MDI, MEC-K, Mitsuboshi Diamond, Newport, SEMCRO, TECDIA and Ying Lyu Technology are all confirmed to exhibit at the pavilion; plus an LED international Forum will also be held during the show. For an ideal platform for equipment suppliers to meet customers and build business partnerships in the Greater China Region, visit www.semicontaiwan.org for more informationand call SEMI Taiwan (Tel: 886.3.573.3399 ext.,214) to exhibit.

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May 3, 2011