The LED (chips and components) market is forecast to increase at a compound annual growth rate (CAGR) of 13.5% from 2014 to $42.7bn by 2020, according to a report ‘Global Light Emitting Diode (LED) Market (Technology, Application and Geography), 2013 – 2020’ from Allied Market Research (AMR, a market research and business-consulting wing of Allied Analytics LLP).
The Asia Pacific dominates the LED market, commanding about three-quarters of the global electronics manufacturing industry. North America, due to its high-tech forensic and medical applications, leads the market for ultraviolet (UV) LEDs.
Due to the absence of hazardous mercury as well as their greater power efficiency, LEDs have penetrated the market and outdone compact fluorescent lamp (CFLs) in commercial lighting, says AMR. It is expected that LED lights will command about 20% share of the global lighting market by 2020, accounting for two-thirds of LED revenue. However, demand for basic LEDs in backlighting applications will decline as the organic LED (OLED) broadens its horizon of applications and eventually supersedes basic LED-based mobile displays, forecasts the market research firm.
UV LEDs primarily find application in medical treatment and forensic tests. The UV LED market is expected to develop further as companies rigorously work out acquisitions to expand their product portfolios and applications. In January 2013, Noblelight acquired UV LED maker Fusion UV in order to enhance its UV LED product features. Developed regions, though, are early adopters of UV LED technology, while the healthcare sector in developing regions such as Asia Pacific is also contributing to growth of the technology. The growing medical tourism sector and the lower cost of treatment should also strengthen the adoption of UV LED technology in developing regions, the report adds.
Government across the globe are implementing LED lighting in most public settings. The US government has already started replacing conventional street lights with LEDs, which is expected to be completed by the end of 2014. Such developments are instrumental to LED market growth.
“Growth in revenue will be slower than the rise in unit sales of LEDs due to the constantly declining price of LEDs; however, the overall market would grow at a constant pace due to growing demand for LEDs and expanding applications,” notes AMR analyst Ranjan Singh.
“Continuous development in the technology suggests huge underlying potential for OLEDs during the forecast period,” he adds, citing recent roll-outs of OLED mobile handsets by Samsung and Nokia. High-brightness (HB) LEDs hold nearly 60% market share, as they can provide much brighter light with lower voltages compared with other alternatives, says the firm. The rapid growth in the 4K TV segment suggests that HB-LED will continue to hold the key to LED market growth, it adds. Major companies such as Samsung SDI and RIT Display are making substantial investments in the development of advanced OLED display technologies.
The rising application of LEDs in general lighting has compelled manufacturers to concentrate on the launch of new LED lighting products and to expand their production. For example, Germany’s Osram has opened its LED assembly plant in Wuxi, China, to expand its fully loaded LED capacities and also to strengthen its market position in the global LED market. The firm chose to locate the plant in China to capture the high potential of the Asian market.
Notable players in this space that are profiled in the report include American Bright Optoelectronics, Cree, International Light Technologies, Ledtronics, Philips Lumileds Lighting, Samsung Electronics, Seoul Semiconductor, Osram Licht, Nichia, LG Innotek, GE Lighting Solutions, and Toyoda Gosei. Of these firms, Nichia, Samsung and Osram held almost 35% share of global LED market revenue in 2013.
