copy 2016

From Technologies to Market

Technology and Market Trends in

LED Downconverters

-

Eric Virey March 7th 2016

From Technologies to Market

Phosphor global Summit 2016

Newport Beach California

2

TOTAL SURFACE OF DOWNCONVERTED LED CHIPS

Phosphor volumes to grow +- at the same pace for

ldquoon-chiprdquo

Surface blue LED chips combined with a downconverter

3

YAG LuAG

GaYAG

359

mt

PFS amp other

Mn4+ activated

2015 LED PHOSPHOR VOLUME BREAKDOWN ndash 2020 SCENARIO

Phosphor volumes

to essentially double by

2020

YAG LuAG

GaYAG

177

mt

Low absorption

excludes remote phosphors

bull Silicates could essentially disappear unless significant cost reduction and further performanceimprovement are achieved

bull Increasing demand for high CRI in lighting broadband green and yellow + narrow band red

bull Wider color gamut display increasing demand for narrow band green and red

4

PRICE TRENDS YAG

No more room for

ASP decrease

Yet YAG is not a

commodity

But quality still matters

Up to 10x premium based on

performance volume relationship

with vendor etchellip

Dramatic price decrease in 2013-2014

March 2016

Min $15

Max $130

5

PRICE TRENDS NITRIDES

Higher margins but ASP getting close to bottom

Still significantpremium for IP compliant high

performance ldquo1113rdquo vs ldquo258rdquo nitrides

Performance gap narrowing ()

Beware of IP

Dramatic price decrease in 2013-2014

March 2016

Nitride Price Trends ndash China

(US$kg)

6

PHOSPHOR MATERIALS REVENUE TRENDS

Revenue to remain

essentially flat due to continued

ASP pressure

Overall flat revenue means pain and suffering + attrition (20+ suppliers in China only)

But even in a difficult environment some companies will grow and thrive

7

PHOSPHOR IP IS A MAJOR DRIVING FORCE IN THE LED INDUSTRY

Wilmar

ASP Inc

+ Sterling

Jiawei

Technology

JM Group

Tsannkuen

Japan

Litigations resolved

in cross licenses

Litigations

1

Cross

License

Single way

licenses

Apr 2004

Jun 2004

Feb 2005

Feb 2005

Jul 2005

Jan 2006

Feb 2006 Nov 2010 Mar 2011

Feb 2007

May 2008

Apr 2007

Aug 2007

Nov 2009

Sep 2010 Sep 2011

Nov 2010

Mar 2011

Jul 2011

Sep 2011

Sep 2011 May 2012 Sep 2013

US5998925

JP3900144

JP3065263

2

3

2009

2002 2005 2007

Feb 2009

Feb 2009

Nov 2008

Apr 2004

Oct 2002

2002

Jan 2002

May 2007

Sep 2002

4

YAG License (Follows non

phosphor related litigations)

Follows non phosphor

related litigation

Follows 6 year of non

phosphor related litigations

Jul 2015 Sept 2015Arrow Electronics

Australia

AU720234

May 2014

Jan 2015

Nitride License

Jan 2015Nitride License

Example Nichia

8

EVOLUTION OF PATENT PUBLICATIONS

Very few compositions

make it to the market

compared to the vast

choices of matrix

activators

Note incomplete data for 2015

September 2015

Emerging () compositions Molybdates amp Tungstates Perovskites Borates Lu-based silicateshellip

copy 2016

Display Applications

Source PlasmaChem GmbH

Picture LG

10

THE TV INDUSTRY HAS A PROBLEM

HOW TO GET CONSUMERS TO BUY A NEW TV

bull Needs Glasses

bull Low comfort

bull No content

bull No significant image qualityimprovement below 65rdquo

bull Content

(and also how to get higher marginshellip)

The most dramatic picture improvements come from higher dynamic contrast and

extended color gamut

bull 4k

bull High Dynamic Range

bull Wide Color Gamut

11

COLOR GAMUT 101

Our displays

only show about 34 of visible colors

HDTV

(Rec709 sRGB)

71 of NTSC

Digital Cinema

(DCI-P3)

96 of NTSC

CRT TV

(NTSC 1953)

UHD Alliance

Encoding

(Rec 2020)

134 of NTSC

But displaying at

least 90 of DCI-P3

12

DOWNCONVERTERS AND COLOR GAMUT

Blue LED + Green amp Red

narrowband converters

= 60-70 NTSC

100 NTSC or

moreIllustration LG

Traditional YAG-based white LEDs Lack of saturated green and red

13

WIDE COLOR GAMUT WITH NARROW BAND PHOSPHORS

Sharp

GM4BN7B3S0

A wide color

gamut LEDs

Narrow red available but still looking for narrow green

up to 90 NTSC

PFS

FWHM lt 10 nm

Β-SiAlON FWHM lt 50 nm

14

EXAMPLE

Source wwwavsforumcom

Spectrum captured and posted by user ldquonukerdquo

Sony XBR49X850B (source Sony)

Display

emission

spectra

15

CURRENT STATUS

Phosphors

QD [1]

Cd-Based

QD [1]

Cd-Free

MolecuLED

Green

(532)

Peakβ-SiAlON

~ 530-540 nmAdjustable Adjustable Adjustable

FWHMβ-SiAlON

48-55 nm28nm 38nm 45nm

Stability Excellent (on-chip) Remote Remote Remote

QE gt95 gt95 gt90

Decay Time lt 3 us ns ns ns

[1] February 2016 data courtesy of Nanosys

Phosphors

QD [1]

Cd-Based

QD [1]

Cd-Free

MolecuLED

Red

(Rec 2020

630 nm)

Peak PFS 631 nm Adjustable Adjustable Adjustable

FWHM PFSlt5 nm 29nm 40 nm 50nm

Stability OK for on-Chip Remote Remote Remote

QE gt90 gt95 gt90

Decay Time 87 ms ns ns ns

16

CURRENT STATUS EVERYBODY WINS AT THE UHDA STANDARD

LCD + RG

Phosphors

LCD +

Cd-based QDOLED

DCI P3 Coverage 94 100 90 to 99

Rec 2020 Coverage 67 to 7791

Best lab results 95 to 97

Everybody gets the UHDA stamp but QDs are aheadhellip

A Liu et al ldquoRed-blue-green solid state light

sources using a narrow line-width green

phosphorrdquo (6 Apr 2015 | Vol 23 No 7)

Did anybody bring a narrow band green phosphor today

17

OSRAM NEW CONVERSION TECHNOLOGY FOR DISPLAY APPLICATIONS

What we know

bull 100 DCI P3

bull 80 Rec 2020

bull Green converterbull 30 nm FWHM Cd free

Announced December 2015

What we donrsquot know does ldquoQuantum Converterrdquo means QDs

18

OSRAM NEW CONVERSION TECHNOLOGY FOR DISPLAY APPLICATIONS

Best guess as of Feb 11th

On-chip Optically pumped green Multi Quantum Wells

(~ Optically pumped green GaN LED structure low droop high efficiency)

Blue LED

On Chip Narrow-Band Red Phosphor

Green MQW

Sapphire substrate

19

STAY TUNEDhellip

20

CONCLUSIONS

bull Gloomy revenue forecast and overcrowded industry

bull But LED phosphors are not commodities and remains a specialty market withplenty of room for high added value products

bull Some companies will thrive in this environmentbull Innovation stay ahead of the performance curve develop new compositionsbull Service customization quality control consistency are extremely valuable

bull Still a lot of room for innovation further improve red phosphors for lightingand green for displays

bull IP is critical protect yourself get some leverage and gives your customer peaceof mind

bull Old fundamental IP expiring soon YAG Market will expend but restrictions willstill apply

bull The LED phosphor market will remains strongly technology and IP driven

copy 2016

Company Overview

22

MEMS amp

Sensors

LED

Compound

Semi

Imaging Photonics

MedTech

Manufacturing

Advanced Packaging

Batteries Energy

Management

Power

Electronics

FIELDS OF EXPERTISE

Yole Deacuteveloppementrsquos 30 analysts operate in the following areas

23

A GROUP OF COMPANIES

Market

technology and

strategy

consulting

wwwyolefr

MampA operations

Due diligences

wwwyolefinancecom

Innovation and business maker

wwwbmorphocom

Manufacturing costs analysis

Teardown and reverse engineering

Cost simulation tools

wwwsystemplusfr

IP analysis

Patent assessment

wwwknowmadefr

24

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Follow us on

bull Consulting and Specific Analysis

bull North America Steve LaFerriere Director of Northern America Business DevelopmentEmail laferriereyolefr

bull Japan amp Asia Takashi Onozawa Representative Director Yole KKEmail onozawayolefr

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bull Report business

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bull General

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