By Paul Semenza – Senior Vice President, Analyst Services, DisplaySearch

Shortages of LED chips and other components (including light guide plates and reflectors) in LED backlights for large-area TFT LCD panels are causing a tight supply of LED-backlit panels for TVs. Panel makers are indicating that they will not drop prices in Q2’10, which will result in a continuing (and perhaps increasing) premium for LED-backlit TV panels 32″ and larger. While temporary (panel makers feel that supply will increase in Q3’10) this could serve to limit the adoption of LED backlights in LCD TVs and monitors in 2010. Aggressive forecasts of 50 million LED-backlit LCD TVs in 2010 are now being scaled back.

While DisplaySearch continues to analyze the market, our forecast calls for 42 million LED-backlit TV panels to ship in 2010, which suddenly seems more reasonable than panel-makers’ original plans. One of the things that we took into account in making this forecast was the challenge of ramping up LED production so quickly. We estimate that the increase in LED area production from Q1’09 to Q’10 was 32%, a huge jump. Considering that much of the increase was accounted for by a relatively small number of chip makers in Taiwan and Korea, some of which are new to mass production and are relying on equipment coming from an even smaller number of suppliers, it should not be surprising that there are some learning curve challenges.

For more detail, see the DisplaySearch Monitor and the Quarterly Global TV Shipment and Forecast Report, which now tracks and forecasts LCD TVs by backlight type, and for LED backlights, by edge vs. direct.