As chip size and power levels continue to increase, thermal management, thermal stresses and cost have become key LED packaging issues. Until recently, low-coefficient-of-thermal-expansion (CTE) materials, which are needed to minimize thermal stresses, had thermal conductivities that are no better than those of aluminum alloys, about 200 W/m-K. Copper, which has a higher thermal conductivity (400 W/m-K), also has a high CTE, which can cause severe thermal stresses. We now have over a dozen low-CTE materials with thermal conductivities ranging between 400 and 1700 W/m-K, and almost a score with thermal conductivities at least 50% greater than that of aluminum. Some of these materials are low cost. Others have the potential to be low cost in high volume production. Emphasizing low cost, this paper reviews traditional packaging materials and the six categories of advanced materials: polymer matrix-, metal matrix-, ceramic matrix-, and carbon matrix composites; monolithic carbonaceous materials; and metal-metal composites/alloys. Topics include properties, status, applications, cost and likely future directions of new advanced materials, including carbon nanotubes and inexpensive graphite nanoplatelets.