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Two months ago, I reported on DisplaySearch’s forecast that prices for LED backlight units for a 40″ LCD HDTV would fall about 15% this year, though LCD HDTVs with LED backlights would continue to cost significantly more than equivalent models with traditional CCFL (cold-cathode fluorescent lamp) backlights.

Now another display market tracking firm has weighed in on the subject. DisplayBank has stated that they expect prices for LED backlights for 40″ LCD HDTVs to fall by 43% this year, which is a striking amount. This would represent about $100 off the bill of materials price for an HDTV.

How can this be? Currently, many LED edge-lit models use LED strips along all four sides of the LCD panel, in order to provide enough light with good brightness uniformity. Improved LED technology and more advanced light diffusers mean that manufacturers now are using LEDs just along the top and the bottom of the panel, requiring about 20% fewer LED devices. Later this year, manufacturers are expected to start using LEDs just along the bottom of the panel, reducing the number of LEDs required by another 10%. Eventually, a single bar of LEDs along one side edge will be sufficient to light the entire panel, which will reduce the number of LEDs required by more than a third.

These shifts have some important implications. LEDs are in great demand from a wide range of industries, including automotive and home lighting. In spite of increased production capacity, some analysts are concerned that supplies may fall short. As HDTVs can get by with fewer and fewer LEDs for a backlight, it reduces the risk of supply shortages.

Edge lighting also means that manufacturers may have to give up the localized dimming that some have demonstrated with a full-matrix LED backlight that can increase contrast. Dimming can also reduce energy consumption, but there is real risk of visible artifacts from the process. By giving up the dimming, manufacturers can focus on making the sets as thin as possible, which seems to be the feature that consumers prefer in any case.

The bottom line here is that the prices for LCD HTVs with LED backlights are likely to continue to decline this year, and you can expect to pay hundreds less for a 40″ set next holiday season than you would for an equivalent set today. It’s hard to see how the industry will be able to sustain these substantial price cuts year after year, but it looks like we can enjoy the downhill ride for at least one more year.

Posted by Alfred Poor, April 19, 2010 6:00 AM

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About Alfred Poor

Alfred Poor is a well-known display industry expert, who writes the daily HDTV Almanac. He wrote for PC Magazine for more than 20 years, and now is focusing on the home entertainment and home networking markets.