Leading suppliers of LED components are increasingly diversifying, in order to produce LED modules and light engines, according to the latest Research Note from market analyst firm IHS Inc, whose 'Next Generation Lighting' report projected that the combined market for LED modules and light engines in lighting applications would reach $1.3bn in 2014.
Many companies, known in the past only as packaged LED providers, have expanded their product offerings, and are now also supplying LED modules. The competition in this market is particularly diverse, not only because suppliers are located all over the world, but also because of competition from companies with backgrounds in power devices and other backgrounds, adds IHS.
These suppliers are moving into the module market, in order to diversify their portfolio and protect against component LED profit margins potentially falling further, as the packaged LED market becomes increasingly commoditized, says IHS. With Chinese companies beginning to gain market share, companies in the West and Korea (among others) are moving up the supply chain to minimize the effects of this competition. With modules and light engines becoming more common, there is a growing trend for lighting companies to purchase LED modules, rather than component-packaged LEDs, in order to shorten and simplify the supply chain. However, in-house production by lighting companies is still common and will remain so, reckons IHS.
