LED Market to Hit $46.05 billion in 2020
The report “Global Market Review and Forecast (2010-2020)” says the use of HB-LEDs in mobile/portable devices will remain a strong segment although OLEDs continue to take market share.
Market research firm ElectroniCast Consultants, has released a market review and forecast of the global consumption of packaged High Brightness Light Emitting Diodes (HB-LEDs). The review of 2010 plus the market forecast (2011-2020) is presented for HB- LEDs with a lumens/Watt rating of 30 to 70 lm/W, as well as HB-LEDs with a lumens/Watt rating of over 70 lm/W. According to ElectroniCast, the global consumption of packaged HB-LEDs in 2010 was $10.09 billion. In the year 2020, the worldwide consumption value is forecast to reach $46.05 billion (see Figure). Market forecast data in the report refers to consumption for a particular calendar year, therefore this data is not cumulative. “During the 2010-2020 timeframe covered in the ElectroniCast study report, decreasing average selling prices (ASPs) are forecast to cause challenging growth patterns in consumption value in some application segments. Therefore competitors need to choose the right “windows of opportunity” to climb through,” said Stephen Montgomery, Director of LED market research at ElectroniCast.
According to the study, use of HB-LEDs in Mobile/Portable Devices is forecast to remain a strong segment although OLEDs are continuing to take market share. The sector is relatively mature versus other sectors and it already has a substantial consumption value. However, there are some emerging “stars” in the portable device category with a very impressive growth pattern forecast for WLEDS (white HB-LEDS). In terms of consumption value, the use of HB-LEDs in the vehicle category is forecast to multiply by a factor of 7 times, before eventually slipping in value, since declining average prices will offset rising quantity growth in some LED colour segments. The use of HB-LEDs in stationary or non-vehicle signals is forecast to increase at an average growth rate of 25.8 % (2010-2015) and the use of HB-LEDs in SSL-General Lighting products is forecast to be explosive between 2010 and 2020. The use of HB-LEDs in the signage/professional display application is forecast to increase at an impressive growth pattern eventually consuming over $6 billion in 2020. Consumption of HB-LEDs in other miscellaneous applications will become much more segmented with opportunities and accountable, partially attributed to the fact that the tracking of the product use will be more evident, aided by automated inventory and purchasing management at the retail and other supply levels. In the consumer backlighting of TV/desktop monitor category, the number of packaged white light emitting diodes that are required per back lighting unit will decline. This will be due to increased luminous efficacy and improvements in supporting optics such as waveguides, components and packaging. At the moment, ElectroniCast foresees ideas and eventually concepts about 3-7 years before innovation solutions are announced in the public domain. “Therefore, as we are looking as far as 10-years, many of the future products for the 2020 marketplace are not even at the idea-stage yet. It is also important to note that we, in effect, forecast lighting demand growth, which will drive demand for increased capability/capacity HB-LEDs,” Montgomery added.
“In 2012, most companies have moved to the new “El Dorado” of LED business: general lighting, which represents the next killer application for LEDs. But enabling massive adoption of the technology for such an application still requires a large decrease in the cost of LED-based products…,” explains Pars Mukish, Market and Technology Analyst, LED at Yole Dévelop
The report estimates that packaged LED revenue will reach a market size of $11.4 billion in 2012 and will peak to $17.1 billion by 2018. Growth will be driven both by the display (LCD TV) and general lighting applications until massive adoption of LEDs in lighting. From 2014, the third growth cycle of the LED business will accelerate with the general lighting application representing more than 50% of the overall packaged LED business. In terms of volume, LED die surface will increase from 22.5 billion mm² (2012) to 80 billion mm² (2018). This will prompt substrate volume growth from 8 million x 2” equivalent (TIE) in 2011 to 39.5 million x 2” equivalent in 2018 with a CAGR of 26%. The cost of packaged LEDs still needs to be reduced by a factor ten in order to enable massive adoption in general lighting. The adoption of LEDs for general lighting applications strongly depends on technology and manufacturing improvements. This is required to drive performance and cost of LED solutions to a trigger point where massive adoption could start. Industry consensus points out a cost reduction per lumen of packaged LEDs by a factor ten. This can be achieved through a combination of manufacturing efficiency and performance improvement. These include access to larger size wafers and improvements in LED epitaxy which would drive down cost of ownership through yield and throughput. Also, improved package and luminaire design will also enable significant cost reductions. China’s GaN MOCVD reactor capacity has increased by a factor twenty in the last 3 years The capacity for GaN LED epitaxy increased dramatically in 2010 and 2011. This increase took place across all regions but was most dramatic in China, where an increase by a factor twenty of reactor capacity took place between Q4 2009 and Q1 2012. “Most emerging Chinese LED epiwafer and die manufacturers are still lagging significantly
behind their competitors in term of technology maturity and LED performance,” says Eric Virey, Senior Analyst, LED at Yole Développement. The bulk of those new companies are not yet capable of manufacturing LEDs to address the large display and general lighting applications that are currently driving the market. In the mid-term, consolidation of the Chinese LED industry will occur (scenario in the central government’s new five-year plan), and China should became a major player in the LED industry. Another factor is that new business models are mandatory to capture the added value of LED lighting. Ultimately, the long life of Solid State Lighting (SSL) technology will totally change the lighting market by dramatically increasing the length of the replacement cycles. The replacement market will be strongly impacted, pushing traditional players of the lighting industry to define new strategies to capture profit. These include technologies include intelligent lighting and different lighting solutions. “In addition, as value is moving to the top of the value chain (module and luminaire levels), several players that were originally involved only at LED device levels will develop strategies of vertical integration in order to capture more value,” adds Tom Pearsall, General Secretary, EPIC. But accessing distribution channels represents a big challenge for those players who develop new approaches to sell their lighting products such as e-commerce and new distributors. The rise of LED lighting will therefore depend on the right merger of the emerging LED industry with the traditional lighting industry.