The combined market for LED modules and light engines in lighting applications will reach $1.3bn in 2014, forecasts the latest ‘Next Generation Lighting’ report from market research firm IHS Inc. However, the packaged LED lighting market will rise at a compound annual growth rate (CAGR) of 11% from 2013 to 2019, while the market for LED modules used in lighting will reach a CAGR of 23.9%, adds a Research Note by principal analyst Jamie Fox.
Riding the trend toward integrated products, many LED makers are increasingly turning to modules as a way to boost revenue and profits. In particular, chip-on-board (CoB) and LED light engines are two examples of integrated products that are experiencing rapid growth. Cree, Seoul Semiconductor and other LED companies – as well as Harvard, BAG, Tridonic and other power companies – are also active in the market, notes IHS.
“LEDs used in lighting have become commoditized in many applications, and price declines in the last three or four years have been worse than expected,” says Fox. “With MLS and other Chinese players increasingly entering the market, competition will remain tough,” he adds.
Component makers are increasingly looking beyond the metrics of lumens per dollar and lumens per Watt as competitive differentiators. LED modules and light engines are a logical step for many companies looking to improve their profit margin, diversify to ensure future stability, and meet the demands of their customers, adds Fox.
“During our research for the LED engines and light modules report, respondents cited the shorter supply chain, ease of production, interchangeability, quality and reliability as reasons why lighting companies chose to purchase LED modules and light engines,” notes Fox. “The report assessed the supply chain and reported on a mixture of outsourcing, contract manufacturing and in-house production of the products.”
