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LED Backlight Prices Falling

February 22, 2010 | Author: Ibex Marketing

Is the glass half full or half empty? DisplaySearch released a report last week that forecasts a rapid drop in LED backlight prices for HDTVs. According to the company’s press release, the current price for an LED backlight for a 40″ LCD HDTV is about $118, and this should fall to $100 by the end of this year. The forecast calls for LED backlights to cost just $50 more than a CCFL (cold cathode fluorescent lamp) backlight by the end of 2011.

DisplaySearch predicts that LED backlights for a 40

Backlight Cost Comparison for 40″ LCD HDTV Panel (DisplaySearch)

This is an aggressive price drop for LEDs, but it looks reasonable because worldwide LED production is exploding. LEDs are being used for solid state lighting replacements for incandescent and fluorescent lights, which is causing an enormous increase in demand. LEDs save energy and space, which is why they are a standard feature for notebook computer screens. And steady improvements in their efficiency only make them more attractive.

But there’s another side to this story. Right now, HDTVs with LED backlights cost a lot more than their CCFL backlight competitors. Using DisplaySearch’s numbers, there is about a $75 premium over the cost of the fluorescent alternative. This is at the bill-of-materials cost, which means that premium gets multiplied before it shows up on the retail price tag. And even by the end of the forecast — the last quarter of 2013 — LED backlights for a 40″ LCD HDTV are expected to cost more than twice as much as CCFL.

My guess is that the improved color performance, thinner screen design, energy efficiency, and solid state reliability of LEDs will likely trump the cost savings of CCFL, and they will become standard just as they have with notebooks. This will act as a small drag on the falling retail prices for LCD HDTVs, but there will be enough other downward forces that we will probably still see prices continue to decline over the next couple of years.