The price of LED backlights will fall from $118 this quarter to $100 at the end of the year, with most LCD panel and set makers concentrating on using the technology.

That's because, compared to conventional LCD backlight systems, LED backlights give better displays, make for a thinner form factor and for lower power consumption, according to market research firm Displaysearch.

A TV with an LED backlight unit uses LED chips, an LGP (light guide plate) and DBEF (dual brightness enhancement film). These aren't used n conventional CCFL backlight units.

Displaysearch has produced an interesting chart showing the costs of producing a 40-inch LED backlight unit.

BOM for backlight LEDs

Kevin Kwak, Displaysearch director in charge of LED Backlight Unit Research said: To reduce LED backlight costs, manufacturers need to develop innovative LED backlight structures with minimal use of LED chips, LGPs with optimised patterns and effective optical film stacks." He said that Displaysearch predicts that the cost of a 40-inch LED backlight will reach $100 in Q4 2010, that's a 2.8x premium over an equivalent CCFL backlight.

At the beginning of 2009, the premium was 3.7x, showing the trend based on increased production of the LED backlights.