How To Lower LED Costs

Market will grow significantly if costs continue to decrease at current rates, but there is nothing similar to Moore’s Law in this sector.

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The LED market remains hot, particularly in the solid-state lighting segment. In fact, solid-state lighting continues to expand amid a precipitous drop in LED prices. And LEDs are expanding into new fronts, such as automotive and intelligent lighting.

The LED boom hasn’t been fun for all parties, however. Amid pressure to reduce their tool costs, LED equipment makers are still in the midst of a long and painful downturn. In total, LED wafer fab equipment spending reached a peak of $2.65 billion in 2011, but the tool market fell by a whopping 45% in 2012 and another 30% drop in 2013, according to SEMI.

One of the problems was China, where various provinces entered the LED market as a means to cut energy costs. In turn, Chinese LED vendors built enormous fab capacities and obtained MOCVD tools with government subsidies. MOCVD, or metal organic chemical vapor deposition, is the key tool used for LED production.

But China built up too much LED fab capacity. There were (and still are) too many MOCVD and other LED tools in the market, causing the prolonged equipment downturn. More recently, many Chinese LED makers have consolidated, which has taken a chunk of capacity offline.

For 2014, it’s a mixed picture for LEDs. LED fab equipment spending is expected to decline by 9% in 2014, according to SEMI, although there are signs that tool orders will pick up in the second half of this year. “We’re starting to see an upturn,” said Sudhakar Raman, vice president of MOCVD marketing at Veeco, the world’s largest MOCVD vendor. “LED production is dominated in terms of volumes in Greater China and Korea. That’s where we are seeing the turnaround happening. Of course, there are a couple of big companies in the U.S. and Europe. They are starting to see their utilizations go up.”

So what’s the problem? If the market does indeed pick up, toolmakers must react quickly and ramp up their production to meet demand. And as before, LED fab equipment vendors remain under constant pressure from customers to lower their tool cost-of-ownership.

There’s good reason behind that demand. LED bulbs use at least 75% less energy, and last 25 times longer, than incandescent lighting, but LED prices are still too high for most consumers and industrial customers. For example, a 60-Watt incandescent household bulb in a four-pack from Philips sells for $1.62. In comparison, a 60-Watt LED bulb from Philips was around $40 two to three years ago. Today, a 60-Watt LED bulb sells for $8 in some states, but the price can be as low as $2 with rebates.

“These LEDs are bright enough now,” said Philip Smallwood, director of research for LED and lighting at Strategies Unlimited, a research firm. “What we really need to do is to reduce the cost of the final product and the final LED. The price point that needs to be reached (for an LED bulb) is under $6.”

Needless to say, LED makers face several challenges. “Every year, we plan for a double-digit reduction in our ASPs across various sectors,” said Sunil Thomas, general manager for the San Jose Manufacturing Site at Philips Lumileds, one of the world’s largest LED makers. “Our wafer fab processing steps have become more complex to be able to extract light out of the die. The packaging technologies also have to drive the cost down. Finally, the customer wants a higher color quality.”

Consequently, LED makers must reduce costs, especially in the manufacturing flow. “We don’t have something like Moore’s Law to guide us,” Thomas said. “It’s not one thing that is challenging. It’s the entire manufacturing (flow) that has to be continually challenged to drive down costs.”

Each step is critical in the LED manufacturing flow. But arguably, the biggest challenges in the flow are the following technologies—wafer size; process technology; the patterned sapphire substrate (PSS); MOCVD; and packaging. So what are the key issues in these areas? And what is the industry doing to reduce the cost in the flow?

Wafer sizes and processes
Today, leading-edge LED fabs are 150mm (6-inch) facilities, but a large percentage of these plants are still using 50mm (2-inch) substrates. The majority of LED suppliers use substrates based on a gallium nitride (GaN) on sapphire technology. The exception to the rule is Cree, which uses GaN on silicon carbide (SiC) substrates.

Two other LED vendors, Toshiba and Samsung, have or will move to a GaN-on-silicon process using 200mm wafers. The idea is to put more die on the wafer, thereby lowering LED costs. Another company, Soraa, is developing LEDs using a GaN-on-GaN technology, which is expensive.

Today, a large percentage of LED makers are moving from 2- to 4-inch fabs using sapphire substrates. The price for a 2-inch wafer is about $10, while a 4-inch product ranges from $30 to $40. “Effectively, 2-inch is being phased out,” said Manish Ranjan, vice president of product marketing for the advanced packaging/nanotechnology markets at Ultratech. “Generally speaking, customers are now moving to 4-inch wafers. Six-inch wafer prices are still about $150 to $180. It needs to come down to $100 before it makes economic sense for customers to convert. Some technology leaders are moving to 6-inch before everyone else.”

Cree, Osram, Philips Lumileds and other leading-edge LED makers have recently made the conversion to 6-inch wafers, which will keep these vendors ahead of the pack. “We’re entirely on 6-inch,” said Philips Lumileds’ Thomas. “We’ve gained efficiencies by doing that. It’s difficult to do 4-inch, let alone 6-inch, because of the manufacturing challenges. There is a lot of art, science and know-how to process 6-inch wafers and get high yields.”

The long-awaited adoption of GaN-on-silicon using 200mm wafers could take longer than expected. “There could be a breakthrough in GaN-on-silicon technology, which can lower the cost dramatically,” Ultratech’s Ranjan said. “But right now, GaN-on-silicon is far away from mainstream adoption. GaN doesn’t lend itself well to the silicon crystal lattice. So you have considerable breakage, which affects the yield and cost.”

Making an LED
In simple terms, the LED manufacturing flow consists of the following steps in order—substrate formation; PSS development; epitaxy; patterning; etch; electrode formation; etch; CVD; patterning; contact hole etching; and packaging.

In the flow, the substrate is developed first. One of the bigger breakthroughs has been the advent of PSS technology, which involves a patterning process on the substrate. A PSS extracts more light from an LED by a scattering or a diffraction/photonic crystal effect. PSS technology can boost the extraction of light in an LED by up to 30%.

“Before, LED quality was not that good in Asia,” said Thomas Uhrmann, business development manager of EV Group. “So, companies had to use more exotic designs. In the last two years, everyone in Asia adopted new manufacturing techniques. The big change was patterned sapphire substrates. This has enabled the Asian manufacturers to come very close to tier one manufacturers.”

To make a PSS, a resist is placed on a substrate, followed on top by a coating of nanospheres. Then, the substrate goes through an exposure step and then etched. The patterned morphologies on the PSS itself could have cones, pyramids or flat tops, depending on the LED being developed.

There are several and competing lithographic technologies to enable the PSS and other patterning steps. The tool technologies include contact proximity aligners, 1:1 steppers, reduction steppers, nanoimprint and hybrid systems.

A PSS ranges in feature sizes from 3 to 1 micron. For years, LED makers used aligners for patterning. But aligners hit the wall at about 3 micron, forcing LED makers to use reduction or 1:1 steppers. Ultratech, for one, has made inroads in the LED market with 1:1 steppers, at the expense of aligners and reduction steppers. The 1:1 stepper can push the PSS feature size down to 1 micron, which increases the brightness of the LED.

The big question is whether the PSS will go beyond the 1-micron barrier. “At one time, everything was a 3- x 3-micron feature on the PSS side. It’s now 2- x 1-micron,” Ultratech’s Ranjan said. “I don’t see it going below 1-micron at least for the foreseeable future. By going beyond 1-micron, it could buy additional brightness, but the cost of buying that brightness is not justified. Therefore, you are better off focusing on a larger wafer size, where you can reduce cost.”

But if LED makers push the PSS beyond 1-micron, then what? “This is where steppers, especially 1:1 steppers, are reaching the limits,” said EV Group’s Uhrmann. “This is the point where steppers are out of the game.”

At that point, LED makers may need to use reduction steppers or nanoimprint. Last year, EV Group rolled out a new option, dubbed Phable. The tool incorporates a contactless -based lithography technology. “It’s a diffraction-based printing system,” Uhrmann said. “Phable is optimized to print periodic features without drift. In this case, we are set up for any feature size from 3 micron down to 150nm.”

Once the PSS process is completed, the wafer is moved to the critical MOCVD step. In MOCVD, pure gases are injected into a reactor. The tool deposits a thin layer of atoms onto the wafer. This, in turn, creates a crystalline, or epitaxial growth, of materials.

The basic building block for a GaN-based LED is the n-GaN/InGaN/p-GaN heterojunction structure. Each LED maker has a proprietary MOCVD recipe, which is a closely guarded secret. “There are manufacturing challenges in epitaxy,” said Philips Lumileds’ Thomas. “Each year, the structures, and the manufacturing challenges, increase in terms of trying to get high yields and high performance.”

Basically, MOCVD is a challenging art form. “There are several vital technology factors for efficient LED production in terms of cost and performance. The first one is growing layers with good uniformity, which we called epitaxial layers. You need to have a uniformed deposition in terms of not only thickness, but as well as composition. The overall cost of ownership, of course, has to be inexpensive. This comes from higher capacity, which is based on productivity and how fast you grow these layers,” Veeco’s Raman said.

To keep the LED industry competitive, the epitaxy cost-of-ownership (COO) must fall 50% every five years, according to the U.S. Department of Energy. Epitaxy growth costs must fall $0.3/μm·cm2 today to $0.1/μm·cm2 by 2016, according to experts. In addition, epitaxial throughputs must increase from 5 2-inch wafers an hour today to 10 2-inch wafers by 2016, they said. And wafer uniformity must fall from 1.7nm today to 0.5nm by 2016, they added.

What’s next?
The next big challenge is packaging. Today’s LEDs are packaged using older die-attached and wire-bonding techniques. “Packaging costs are very high,” Philips Lumileds’ Thomas said. “In a lot of the applications, the LED itself is being picked and put into a package. That process is very costly.”

To reduce packaging costs, Philips Lumileds has devised several new technologies, such as chip-on-board and chip-scale packaging (CSP). “Naturally, the more you can do on a wafer level, as opposed to a die level, you can drive the cost down,” Thomas said. “In addition, we have different drivers and designs. We have different choices of materials and improved phosphors. All of those have helped to drive down the cost.”