Large international brands including Nichia, Osram, and Toyoda Gosei have begun to work more closely together in exchanging authorized patents to increase market control, noted Fan Bing, technical director of the software and integrated circuit promotion center under China’s Ministry of Industry and Information Technology (MIIT). Big brands patent partnership strategies aim to monopolize high-end technologies and markets, and to acquire higher profits before the semiconductor lighting market matures. At the same time, rapid technological advancements are also forcing companies to abandon solo tech developments and turn towards multilateral technological corporation.
Japanese manufacturers are way ahead of competition in LED lighting patent applications. Nine Japanese companies have become major patentee in the LED industry, with Samsung as the sole Korean patent holder. Japanese companies have absolute advantages in the semiconductor lighting field.
Out of the top 10 global LED patentees, the industry recognizes Toyoda Gosei and Nichia as main patent holders in core LED chip manufacturing technology, said Fan. While top three electronic and display manufacturers are Panasonic, Sharp and Samsung.
Usually, companies will apply for new technology patents in their own country. Since the Japanese companies are the major leaders in the semiconductor lighting industry, the country’s number of semiconductor lighting patent applications is far ahead of other countries.
In comparison, Chinese LED patents have mostly been in package applications, Fan noted. Package alone accounted for 42 percent, applications 41 percent, drivers nine percent, epitaxal wafer three percent, white light two percent, die two percent, and only one percent was for substrates.
LED patents first appeared in 1960s and the the number of semiconductor lighting patents applications exceeded 100 by late 1970s. The number of patent applications has been rapidly growing since 2000. The increase of patents was mostly caused by soaring global high-power LED market since 2002, which achieved historical highs, Fan analyzed. The growth of high-power LEDs has been mostly driven by smartphone backlight applications that use GaN based white LEDs.
The major three global LED camps
Fan pointed out the global LED industry is currently split into three major camps—Japanese, Europe and U.S. manufacturers are in the first camp, followed by Taiwanese and Korean manufacturers in the second camp, and Chinese manufacturers in the third camp.
Japanese and European manufacturers in the first camp including Nichia, Toyoda Gosei, Cree, Osram and Philips Lumileds possess patent advantages in core technologies. These manufacturers have been developing general lighting, automotive lighting and other applications for many years.
Taiwanese manufacturers in the second camp have massive chip production and package capacity. Korean manufacturers have relied on large enterprise strategies to vertically integrate consumer electronics to become the late rising star in semiconductor lighting. Korean companies have been growing at a very fast rate.
In the last camp, Chinese LED industry size has been expanding very quickly. There have been more than 5,000 Chinese semiconductor lighting companies at the end of 2010. Out of these, more than 1,000 are mid to large sized companies, and there are more than 20 listed companies. The industry market value has reached RMB 120 billion (US$ 1.97 billion). Chinese manufacturers have taken more than 60 percent of global LED lighting application share, with output value exceeding RMB 19 billion.
China has become the global manufacturer for functional LED lighting and landscape lighting. However, Chinese LED manufacturers tend to be small, and there are serious issues in low quality and overlapping markets. Breakthroughs are still required in Chinese manufacturers core technologies, improvements are also required in standards, testing, and recognition systems. Services to support the structure is still incomplete.