Using Transistors when wiring LEDs in parallel

Hello, I am relatively new to using transistors in my circuits and need some help understanding the scenarios they are used for. I want to make an Arduino 7-segment digital clock out of LEDs in parallel that switch on/off and are controlled by 8-bit shift registers. I have read in posts that switching on/off multiple LEDs in parallel could burn up a 555 chip if powering the LED's directly off the chip, and that transistors help resolve this.

I think I generally understand how transistors work by switching larger currents, I just don't understand in what cases to use them and why they are useful here. Like how would I know that a 555 chip would burn up in this case if I tried using it alone?

Thanks and please point out if I'm misunderstanding anything!

EDIT: Ok, I didn't realize that chips in general have a supply voltage range/limit and can't supply more than that. If I'm correct, this means that multiple LEDS in parallel require more power than the chip can provide, thus a transistor is needed?

Shift register like TPIC6B595 is designed for sinking current from parts like common anode 7-segment displays. It has high current (150mA) outputs. I offer a board with up to 12 shift registers for controlling up to 12 digits. http://www.crossroadsfencing.com/BobuinoRev17/

Thanks, I will definitely look at that as an option!

But can someone please give me extra clarification on the use of transistors to solve the problem, which was the point of my question? Or a basic explanation of the things you need to consider voltage and current wise to run multiple LEDs in parallel without burning anything out?

The transistor merely acts as an electronic switch.The transistors that make up the outputs of Arduino are kind of small, and only switch on 20mA before their performance degrades. Discrete transistors come in thousands of varieties, some will handle much more current. Some are conveniently arranged with other logic functions, like the TPIC6B595, a shift register with fairly beefy transistors. Some are not, like the ULN2803, with has 8 channels of transistors in one package. If you want to use discrete transistors, you can do that as well, it's just a lot more wiring to deal with. You can have as many LEDs in parallel as you want. You need a current limit resistor with each one as most LEDs have a current rating of 20mA. If you have 10 in parallel, then the transistor must handle 200mA. If you have a higher voltage power supply, you can connect the LEDs in series and let them share the same 20mA. With a 12V supply, you can have 3-4-5 LEDs in series with a single resistor, depending on their Forward Voltage rating (Vf) which is the voltage needed for the diode in the LED to start conducting. An LED that turns on at 2.2V can have 5 in series. An LED that turns on a 3.2V can have just 3. 5 x 2.2V = 11V; 3 * 3.2V = 9.6V. The sum of the Vf's must be less than the source voltage.

Thanks CrossRoads for the thorough explanation and Pancake for the diagram. Both helped me understand a lot more about what I needed to consider for designing my project and cleared up my confusion with transistors.