Lite-On Technology is confident that about 15% of new notebooks will feature LED backlights, according to company CEO KC Terng, despite that some industry players believe the penetration rate of LED-backlit notebooks will be lower than previously expected in the short term. Terng noted that panel customers are still urging Lite-On for LED shipments, implying that demand from the notebook segment is still solid. He anticipated that about 15% of new notebooks shipped in 2008 will be LED backlit, adding that substantial market growth should be seen in 2009. Terng revealed that shipments to a single customer averages at about 7-8 million units and the company currently has two customers in the LED-backlit notebook segment, with sales contribution from each exceeding NT$25 million (US$794,050) per month. Terng commented that the aggressive expansion by fellow LED makers in 2008 is a negative factor in the near term, since massive capacity expansion drags down average selling prices (ASPs). But Lite-On is conservative over its own expansion and will not be seriously impacted by the industry trend, he emphasized. However, given that leading player Nichia has taken an aggressive path in its deployment in top-view LEDs, Terng said Lite-On is seeing ASP pressure in this segment and has adjusted its strategy by pursuing other orders. In related news, Lite-On has also approved plans to invest US$10 million at US-based high-performance LED (HPLED) maker SemiLEDs to build a strategic alliance. Terng pointed out that the alliance frees Lite-On from any patent issues related to HPLEDs as the metallo-organic chemical vapor deposition (MOCVD) equipment that SemiLEDs uses is different to that of its rivals.

Taiwan based electric wire and cable maker Walsin Lihwa is going to join the LED market and placed an order for Aixtron AG MOCVD systems in the second quarter this year, with the systems being delivered this quarter. LED industry players indicated that Walsin Lihwa's investment will target both upstream and downstream segments of the LED industry. However, Walsin Lihwa commented that MOCVD systems can be used for various purposes, so the move does not necessary mean it is entering the LED market. The industry players noted that LCD panel maker HannStar Display is a member of the Walsin Lihwa Group so entering the LED business may make sense if the company is looking to produce LEDs in house for use in backlighting applications for HannStar's medium-size panels. HannStar is working to boost its medium size panel shipments, and estimates of its quarterly shipment may reach five million panels in the second half of the year. LEDs used in HannStar's backlighting applications mainly come from Unity Opto and Everlight's light bar, with less than 10% coming from Japan-based Nichia. However, the MOCVD system Walsin Lihwa purchased are for producing GaN-based high-power blue LEDs, which are used in general lighting, market sources indicated, while adding that this is a different market than that for low-power LEDs used in LCD panels. Therefore, the Walsin Lihwa purchased MOCVD systems should have nothing to do with supplying HannStar. Since its original foundation in 1966 as Pacific Electric & Wire, Walsin Lihwa has become a leading optical cable and wire company, and has expanded into successful international enterprises with investments in semiconductor manufacturing, electronic components and the optical industry.

HB Chen, vice-chairman and CEO of AU Optronics (AUO) indicated that the company's goal of adopting LED backlighting for all of its notebook panels by 2011 may be achieved one year earlier in 2010.   Chen also estimates the penetration rate for LED backlit notebook panels in the overall market will exceed 20% for the second half of this year. However, the rising penetration rate of LED backlighting in the second half of the year will have a weaker effect than usual on overall shipments for the entire year, Chen explained that while the breakdown for annual notebook panel shipments between the first and second half of the year is usually on a 4:6 ratio, this year the ratio is expected to be 5:5 due to weakening economic conditions in the US market, rising energy costs and inflation concerns. Chen pointed out that AUO's optimism about the LED industry is a major reason the company established Lextar in April 2008 to develop LEDs for LCD panel backlighting applications. Chen indicated that the revenue contribution from Lextar will not begin until the second half of 2009, but he added that Lextar will begin cooperating with Japan-based LED makers to avoid any patent disputes. As for Lextar targeting other LED applications such as for general lighting, Chen added that AUO will join in such competition at the right time in the future.