LED makers are branching into niche application markets as competition in their industry expands, comments LEDinside (a division of TrendForce) in its latest 'Gold Member Report – 2016 LED Market Demand and Supply Analysis'. Currently, entering the automotive LED market is regarded as a blue-ocean strategy because the market has relatively few contestants and allows for higher pricing, it adds.
In particular, the global market for exterior automotive LEDs is projected to rise at a compound annual growth rate (CAGR) of 8% from $1.21bn in 2015 to $2.29bn in 2020. Also, the market value of standard-power LEDs is gradually declining in contrast to the rapidly rising market value of high-power LEDs. In the future, automotive LED application will take off in the high-power LED market.
Exterior automotive lighting includes directional signals, fog lights, headlights (high/low beam) and position lights. The volume of high-power LEDs used for this application has been growing each year, according to LEDinside research manager Duff Lu. The annual volume increases have also beaten the annual declines in high-power LED prices, helping to drive the expected CAGR of over 8% in market value of exterior automotive LEDs during 2015-2020. Lu adds that the penetration of LED products in the exterior automotive market is currently less than 15%, so the growth potential is huge. High/low-beam LEDs in particular will see the highest growth in market value, with a CAGR of 11% during 2015-2020.
Based on LEDinside's estimates, the total LED volume used in the exterior automotive application worldwide reached 2.79 billion units in 2015 and will grow to 3.67 billion units in 2020. Specifically, the number used in headlights and position lights will grow at a CAGR of over 15%, although high/low-beam LEDs will have the highest CAGR of 23%.
Interior automotive LED market value to fall as applications of standard LEDs contract
As for interior automotive LEDs, most products on the market still use standard-power LEDs. With the average sales prices (ASPs) of standard-power LEDs in a tailspin, the global market value of interior automotive LEDs is expected to suffer negative growth in the next five years. LEDinside estimates that the market reached $605m in 2015 but will drop to $603m by 2020.
The only exception to this downtrend is LEDs for automotive instrument clusters. The market for this application continues to grow against headwinds as the traditional mechanical instruments on the cluster are being replaced by LED instrument panels. The average size of these panels is also expanding, so more LEDs are needed. LEDinside therefore projects a CAGR of about 3% for this market during 2015-2020.
