The Impact of China’s Rising LED Industry

on Global LED Manufacturing and SSL

Adoption

Decai Sun

2016 DOE R&D Workshop

Outline

• Overview of China LED industry

• Impact of China’s rising LED industry on global SSL industry

and LED adoption

• Sanan and its global reach strategy

2

Status of China LED Industry

• China LED industry is going through a technology upgrade

similar to other high tech industries

• The technology gap between Chinese LED companies and the

rest of world has shrunk dramatically

• Strong companies in SSL supply chain have emerged

• Adoption of SSL in China is faster than the rest of the world

• The rise of Chinese LED industry has impacted global SSL

industry in a profound way

– Supplying LEDs and driving volume growth for general lighting

– Driving cost down faster than experts have predicted

– Causing profit margin erosion in the industry

– Forcing some players to change business models or exit

– Benefiting end users

– Accelerating adoption of SSL

3

Advantages of Chinese LED Companies

• Innovation in scale (full vertical integration)

• Entire ecosystem for rapid and low cost prototyping

• Government Support (both central and local) even in

difficult times

• Scaling in manufacturing

• Creative in cost reduction

• Inflow of talents from outside

• Aggressive, pragmatic and risk taking

• Huge domestic market

4

Characteristics of China LED Industry

• More emphasis on lm/$ in consumer and retrofit market.

Willing to trade off with lifetime and quality of light

• Lm/W, quality of light and aesthetic design are becoming

more important in the commercial lighting marketing

• Brand name is very important in commercial and government

projects

5

6

1 2 3 4Total 13.552 18.559 23.957 29.908China 0.81 1.986 3.119 4.57

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

5

0

5

10

15

20

25

30

35

Bil

lio

n U

SD

x 5.6

x 2.2

5.9%

10.7%

13%

15.3%

China vs. Global Market Size

China LED market is growing faster than the rest of world

2012 2013 2014 2015

GaN LED Chip Technology Overview

Chip Structure LED Package Application Cost

advantage

Technology

Leader

Lateral die - Mid Power

- COB

- Ceramic 3535

- Backlight

- Interior

- Outdoor

- Street light

Yes Asian

companies

VTF - High Power - Outdoor

- Specialty

No US/European

companies

Flip Chip - High Power

- CSP

- Outdoor

- Specialty

No US/Europe

companies

8

Application Lumen Density

Pla

tform

Lum

en D

ensi

ty

Midpower

Typical use

Diffuse/Linear Directional/Point

Panel T8 A19 Downlight MR/PAR

High

Low

Not typical use Depends on objectives

Illumination Market Today

Spot

COBs

Die on Ceramic

(now too expensive

for illumination)

Outdoor

&

Industrial

Is Haitz’s Law Still Relevant?

• Haitz’s law served as the roadmap to inspire the SSL revolution

• $/lumen (or lumens/$) has exceeded the prediction due to aggressive

cost down by Asian companies

• Lumens/package has also exceeded the prediction, but lost relevance

as big chips and big packages have only niche applications

9

Midpower LED Value and Performance

10

Lum

ens

per

Dollar

Lumens per Watt

MP-2016-1100

MP-2016-1200

MP-3014 MP-3020

MP-3030-2200

MP-3030-2100

MP-3030-1100

MP-5050

MP-1919

MP-1616

2500

2000

1500

115 120 125 135 130

(3000K, 80CRI)

D

rive a

t hig

her

curr

ent

for

more

lm

/$

Drive at lower current

for higher lm/W

Haitz law at work: mid power LED example

MP-3030 Delivers World Class Performance

0

20

40

60

80

100

120

140

160

180

200

80

100

120

140

160

180

200

0 50 100 150 200 250 300

Flu

x (

Lum

ens)

Eff

icacy (

LPW

)

Current (mA)

Efficacy & Flux vs. Current 3000K, 80 CRI

Flux

Efficac

y

Flux

11

MP-3030 Delivers World Class Performance

0

20

40

60

80

100

120

100

120

140

160

180

200

220

0 50 100 150 200 250 300

Flu

x (

Lum

ens)

Eff

icacy (

LPW

)

Current (mA)

Efficacy & Flux vs. Current 5700K, 70 CRI

Flux

Efficac

y

Flux

12

Established in Nov, 2000

IPO in July, 2008

6000+ employees worldwide

Acquired Luminus Devices in June 2013

Sanan Opto: Overview

20 39

50

142

169

269

0

5

10

15

20

25

30

0

50

100

150

200

250

300

2010 2011 2012 2013 2014 2015

kk p

cs/

M (e

q.

2")

MO

CV

D U

nit

s

Sanan Capacity Expansion

MOCVD Units Capa. kk pcs/M (Eq. 2")

Revenue

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

9.00

2008 2009 2010 2011 2012 2013 2014 2015

0.64 0.77 1.41

2.85

5.50 6.10

7.84 8.17

Revenue (

x100 U

S$M

)

Sanan Opto: Largest Chip Manufacturer

• Number one LED chip manufacturer in the world

• ODM/OEM with global customer base

• Strong R&D capability

14

Sanan 24%

Epistar 14% Rest

62%

2015 Global LED chip sales

(Data from LEDinside)

GaN Epitaxy

GaAs Epitaxy

Sapphire Substrate

8”Si Substrate

GaAs Substrate

Ge Substrate

LED Chip

Power Device

III-V Solar Cell

Microwave Chip

SiC Substrate

Sanan Opto: Core Technology

Sanan Opto: Full Spectrum LED Products

350 450 500 550 600 650 800 1000

AlGaInP AlInGaAs AlInGaN

Wd Wp Wp

564~580nm 580~597nm

595~618nm

610~650nm

640~660nm

840~870nm

~940nm

515~535nm

447~452nm

450~460nm

465~475nm

365~380nm

380~400nm

17

Sanan Opto: Lateral Chip Roadmap

SD Optimum (Profile)

R-Pad Optimize

DBR/PV Optimize

2016 Chip Process Technical Plan for Lateral GaN LED

+8% Chip +3%

Epitaxy +5% PSS Optimize • Higher reflectivity • Lower absorption • Higher transparency • Higher refraction index

Sanan Opto: Flip Chip Roadmap

* 3535 Ceramic @350mA, 4700~5300K, Ra=70

2013 2014 2015 2016

Lm/W

120

130

135

140

125

115

145

150

+5.3%

+5.6%

+6.5%

+7.5%

+5.1%

Gen-I

Gen-II

Gen-III

Sapphire sub.

GaN LED

PKG Sub-mount

45x45

Gen-IV (40x40)

2017

155

160

+8.5%

* K1 PKG @350mA, 5700k, Ra=70

2013 2014 2015 2016

Lm/W

120

140

150

160

130

110

170

180

+5%

+4.5%

+6.5%

+6.5%

+19%

Permanent

sub.

GaN LED

PKG Sub-mount

45x45

Pro-VTF

VTF

40x40

2017

+15%

Sanan Opto: VTF Chip Roadmap

Sanan Global Reach Strategy

Sanan has built a robust IP portfolio through • Internal technology investment and patent filing

• IP acquisition

Over 100 patents in high power chip and packaging

through acquisition of Luminus Devices in 2013

139 patents covering epitaxy and chip from a global

LED company in 2014

More acquisition in progress

0

100

200

300

400

500

600

700

800

900

Pate

nt

No.

filed

granted

Strong IP Investment

Sanan Global Reach Strategy:

Epitaxy/Chip PKG Module/Light

Engine LED Fixture

System

Solution

ODE/OEM, Joint Venture and Direct Investment

Global Partners and Customers Sanan

Key Partners throughout the entire SSL supply chain

Sanan Global Reach Strategy

Luminus

founded to

commercialize

MIT technology

2002

2008

Revolutionized

front projector

market by

powering the first

high brightness

LED projectors

2009

Specialty Lighting Business Unit

Fiber Coupled

and 3D Printing

Tactical and

Transportation

Create first “high

power” >10W, white

products. operation.

2012

Introduced UV, RGBW and

first “round” die for spot

light and entertainment

Entertainment

and Stage

Lighting

2014

Lightera design

Industry leading

COB Portfolio

2015

Introduced Xnova

Cube Innovation

and Midpower

Illumination

Business Unit

Luminus: pioneer of Photonic Lattice and HB LED technologies and innovator in

specialty and general lighting

Luminus Devices Acquisition in 2013

Luminus LED Core Markets

Display

Entertainment

Medical

UV Curing

Retrofit

Hospitality

Retail

Commercial

Area Lighting

Portable

Specialty Lighting Markets

Illumination Lighting Markets

Light for Working High Lumens/mm2

Light for Living Quality of light, color consistency, efficacy

Horticulture

Industrial

Infra-Red

Automotive

Luminus COB Performance Leadership

• Generation 1 (2014)

– Wide product selection, leading performance

– >115/130 LPW typical (3000/5000K, 80/70 CRI, 85°C)

• Generation 2 (2015)

– Targeted to shop, industrial, residential, outdoor, hospitality markets – ceramic

metal halide replacement

• >130/150 LPW typical (3000/5000K, 80/70 CRI, 85°C)

• Generation 3 (2016)

– Available Q1 2016, Industry leading performance

• >150/170 LPW typical (3000/5000K, 80/70 CRI, 85°C)

24

Lumens / Watt

3000K 80CRI @ 85C

2014 Q2 2015 Q1 2016

115

150

130

lumens/package

$/lumen

lumens/W

Luminus COBs are

aligned with Haitz’s

law and DOE roadmap

Luminus Specialized COB Products

• AccuWhite™ High CRI

– 98 CRI 2700K, 3000K, and 3500K

– GAI > 105 typical

• Sensus™ Below the Blackbody Locus “Pure White” LEDs

– 80 and 90 CRI, 3000K and 3500K

– GAI ~20% better than on the BBL

• High Lumen Density (XH00)

– CDM “killers”

– >40,000 cd in a narrow, 10°beam

– Replace ceramic metal halide spots

25

Building on High Power and Specialty Heritage

Accu White

Luminus Specialty Products Examples

Entertainment

Spotlight

Fiber-Coupled

Illumination & Endoscopy

Tactical

Flashlights Obstruction

& Beacons

Industrial and UV

applications

Projection

Displays & HUDs

Transportation

& Long-throw

Stage

Washlight

Luminus Specialty LEDs can operate at powers up to 100W and are typically used in applications requiring high optical output

High lm/mm2, Performance-oriented Solutions

26 © 2015 LUMINUS DEVICES, INC. ALL RIGHTS RESERVED.

Thank you!

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