In the ever-growing LED market, automotive LEDs are witnessing a rapid development. This is driven by various regulations enforced by governments around the world for fuel-efficient gasoline vehicles. In addition, manufacturers of hybrid vehicles and electric vehicles have increasingly embraced new technologies. Also, with substantial development in automotive electronics, many LED manufacturers are now trying to gain their positions in this market.
According to statistics from LEDinside, a division of TrendForce, the global automotive LED lighting market is projected to reach a total value of US$ 2.817 billion, growing at a CAGR of 14.8%. In comparison, the overall LED industry will only grow at a CAGR of 3% from 2015 to 2021.
Myway Hsu, Associate Vice President of Epistar’s R&D Center, stated that as technologies for LED automotive interior lighting have been well-developed, new applications are expected to come on the market, such as ambient lighting and head-up display (HUD). As for exterior lighting, technologies have advanced and are ready to be put into practice. For instance, headlights, night vision systems and Advanced Driver Assistance Systems (ADAS) all feature white light LED, IR LED and LD, which present substantial opportunities for LED makers.
In Europe, as countries mandate daytime running lights (DRLs), the focus of LED exterior lighting has shifted away from mature applications like turn signal lights and tail rights. Thanks to the increasing demand and advanced technologies, LED manufacturers have been able to lower production costs and improve yield. Moreover, they have enough time to prepare for verification, so LED lights have successfully been applied to automotive exterior lighting, which is expected to contribute a lot to the growth of company revenues.
Growth potential for LED automotive exterior lighting
Among high power LEDs used for automotive lighting, LED headlights and LED fog lights are products that have significant opportunities for increased demands. They have higher brightness and require the application of advanced technologies. In addition, their penetration rates are still low. LEDinside estimates the penetration rates of LED headlights and LED fog lights currently stand at 12% and 16% respectively. From 2015 to 2020, the two sectors will grow at a CAGR of 18% and 15%. Thus, in the entire exterior lighting market, they have the strongest growth potential.
According to Hsu, in the exterior lighting market, the focus is now on headlights, including H/L Beams, turn signal lights and DRLs. The company offers 1W solutions for turn signals and DRLs, and 2W and above solutions for headlights. For LED manufacturers like Epistar, it is essential to work closely with partnering companies to design and develop LED chips based on different purposes.
For instance, when designing headlights, manufacturers have to optimize beam patterns and heat dissipation in a very limited space. In the European market, Thin GaN (Vertical) options are more popular. U.S. customers mostly require Thin Film Flip Chip solutions, while Japanese and Taiwanese customers favor Flip Chip LEDs. In the future, to increase optical performance, Epistar is considering to use small-sized low wattage LEDs to form LED matrix.
As technologies become more readily available, LED headlights have been adopted in mid-range and high-end cars. Moreover, there are LED headlights that can automatically adjust beam intensity and beam angle to avoid headlight glare and ensure better visibility when making turns. Hsu believes the future of LED headlights is projector headlights, which require a certain degree of optical density. A possible solution is using secondary optics to create 4-chip or 5-chip LEDs. The main challenge for this technology is that hotspot is often observed under high current flow, which could cause leakage and burns. Therefore, design ability and yield management are crucial for manufacturers who want to tap into this market.
In terms of tail lights, as light guide plates have been increasingly used, the number of LEDs used in tail lights has increased significantly, which is a piece of good news for LED makers. In this segment, Epistar offers industry-leading PN-Series and PX-Series LED chips, which contain a group of AlGaInP LEDs, yellow LEDs and red LEDs that Epistar excels at. By utilizing different chip microstructures, Epistar provides pin-to-pin compatible LED modules for customers. In addition, the quality of Epistar’s automotive LED components is approved by car manufacturers, giving the company competitive advantages in this market.
New applications drive a new wave of demand
Hsu further estimates that automotive LEDs will be applied to electric buses, electric scooters, agricultural machinery, golf carts and high-speed trains, which will open up new business opportunities and generate a new wave of demand. LED chip makers with unparalleled expertise will be the top choice for car manufactures.
The marketing approaches for automotive LEDs are different than those for general lighting products and backlighting products. Epistar is an experienced OEM and AM, and these experiences can be replicated in the automotive LED segment.
From part numbers, LED specs and systems to light source, each element requires specific expertise to develop and manage, and whole lighting design is the dominant trend. LED manufactures have to fully utilize their R&D capabilities and win design bids as well as work around time-consuming certification schedules. In Japan, South Korea and China, automotive LED makers have the ability to form vertical integration with automakers and become a part of their supply chains.
Furthermore, demand for automotive LED lights will also expand to emerging markets such as Southeast Asia. LED replacement lights is also a promising market. In sum, automotive LEDs will continue to generate burgeoning demands worldwide.
