The use of LED backlights for liquid crystal display (LCD) television panels is accelerating at a breathtaking pace and motivating panel manufacturers to innovate and optimise supply chains. In its latest quarterly report, market research group DisplaySearch (Austin, Texas / USA; www.displaysearch.com) notes that in Q2 2010 global shipments of LCD television panels with LED backlights soared 110% against Q1 to 9.5m units. By Q4, it expects some 40% of global shipments of LCD panels to have LED backlights – up from 18.5% in the second quarter. By the second quarter of 2011, market penetration is thought likely to exceed 50%.

The four leading manufacturers accounted for 96% of total shipments of LCD TV panels with LED backlights in the second quarter of 2010, the report says. Samsung and Sharp each shipped 2.8m LED panels, giving them a 29% market share respectively. LG Display shipped 2.4m units (25% market share) and AUO shipped 1.2m units (13% market share).

Market penetration is highest among the leading LCD panel makers, which in addition to Sharp, Samsung and AUO include LG Display and Chimei Innolux. Notably, Sharp and Samsung aim to ship more LED displays than the less sophisticated cold cathode fluorescent lamp (CCFL) panels in Q4 2010. Increased penetration is leading prices for the LED panels to tumble, providing another boost to demand. After the tight supply situation in Q2 2010, suppliers ramped up their deliveries to meet producers’ schedules, resulting in an oversupply situation in Q3.

Prices began to fall quickly in Q3, due to the oversupply as well as inventory adjustments downstream, says David Hsieh, large-area leader and vice president for Greater China at DisplaySearch LCD research team, adding that LED panel prices fell faster than CCFL prices. As Hsieh observes, panel makers expect to grow their shipments through the end of the year as LED panel prices and end-market prices of LED LCD TVs fall rapidly.

Manufacturers are setting their sights on developing lower cost LED backlights with enhanced performance. New developments include "single-sided two light bars" edge-lit LED backlights, the use of alternative optical films for higher brightness and lower cost, and the enlargement of LED chip packages for better luminous efficiency.