The cost of LEDs used as light sources in pico projectors is expected to drop by 10% in the second half of 2010, and Taiwan-based LED players expect to enter the supply chain for built-in pico projectors for handsets, according to market sources.

Currently, Osram is the main supplier for LEDs used in pico projectors, while Japan-based Nichia is focusing on laser light sources for pico projectors, the sources noted.

With patent licensing from Luminus Devices, Taiwan-based LED chipmaker Formosa Epitaxy (FOREPI) plans to move one production line for LEDs for stand-alone or built-in pico projectors, the company said. Amid higher ASPs and gross margins, LEDs used in pico projectors will help to increase profits in the second half of 2010, Formosa noted.

LED packaging house Lite-On Technology has entered the pico projector market using LCoS technology. Mass production of its pico projector products is expected to be delayed to the third quarter. Lite-On’s pico projector business extends from upstream LED packaging to module production, and the company is also co-developing designs with US-based vendors, the sources added.

Source: Digi Times