March 2011 Earthquake in Japan Caused Demand of LED Lighting to Grow

The March 2011 earthquake in Japan that caused a nuclear crisis has been driving the country to enthusiastically conserve energy, causing demand of LED lighting to grow. Sales of LED light bulbs in Japan have reached around 60% in the third quarter coupled with rapid price decreases of big-brand products. LED light tubes have been entering retail chains and are expected to be the next product to drive market growth. Industry sources indicated they are receiving urgent orders from Japan-based customers and expect demand in the fourth quarter to be quite healthy. Japan-based customers have been issuing orders to Taiwan-based LED firms such as Lextar and Delta. Lextar's Japan-based customers currently account for 50% of LED lighting sales while Delta used to focus on OEM light bulb orders from large-size Japan-based brands, and in recent months began receiving OEM orders for LED tube lights. Energy conservation has become a national sport in Japan after the nuclear disaster in March. Coupled with government policies that encourage businesses and households to conserve energy, the growth of LED light bulb sales in Japan has increased more than two-fold, according to international research institutes. Industry sources noted the price of LED light bulbs in the first half of 2011 was around JPY2,000 (US$26), however by June, the price of LED light bulbs from first-tier brands dropped to JPY1,600-1,700. South Korea-based firms such as Samsung Electronics and LG Electronics have also been targeting the growing market in Japan. The heated competition is likely to push prices down further. According to Digitimes Research, Japan's LED lighting market will experience large growth in 2011-2012 due to the suspension of incandescent light bulb production. Annual growth is expected to exceed 70%, and by 2015, the penetration of LED lighting will reach close to 75% in Japan. Source: www.digitimes.com