According to the reports from CNBC, E-cigarettes, cancer immunotherapy, LED lighting, natural gas engine technology, software defined networking and big data are among eight industry themes that Goldman Sachs analysts described as "creative destruction" in a recent report.
Goldman analyst Brian Lee sees a bright future for LED lighting. LEDs have gone through several transformations, starting with the handsets in the early 2000s, moving on to TVs, and now progressing to general lighting. Lee writes that this is a multi-decade opportunity for a product that will have clear cost and energy savings advantages.
LEDs have a longer lifetime of 50,000 hours, and could have 80 percent penetration by 2025, he notes. Demand is now in the early stages but the general lighting market is large - $11 billion. LED is about five percent of the market and it is being driven by industrial and commercial demand. Goldman believes Cree is the most attractive play and it has a technology advantage. Taiwan-based Epistar is a key player in the Chinese LED market. Goldman is neutral on the stock but it could see EPS growth of near 40 percent in 2013/2014.
Risks include slower adaption of LED lighting in general, a new technology or positive developments in conventional lighting.
