Newcomers Flood Into the LED Lighting

Infinite potential for emerging energy-Saving industry

Although LED lighting is still in its infancy, its bright market prospects are attracting many companies to jump into the industry and establish an early foothold in the market. Large groups in Taiwan such as Lite-On, Tatung, and Delta Electronics are making forays into LED lighting with aggressive investment projects that have drawn much attention, since they are expected to have a major impact on the industry in the future.

The Lite-On Group, which claims to have set up the first LED manufacturing plant in Taiwan, has contacted the world's top three lighting source manufacturers—Osram, Philips, and GE—for cooperation in developing international standards and specifications for LED lighting products. Lite-On hopes that this will help it stake out a position of market leadership in the field.

The Tatung Group formally started up its LED lighting business in 2010 through a subsidiary, Forward Electronics, which was originally established as a producer of LED backlight molds. Forward Electronics, along with its own China-based subsidiary, Laster Tech Corp., has obtained several road-light orders from Chinese buyers. The company is also engaged in an R&D project aimed at using AC LED technologies to make outdoor LED lighting products.

As a new player in this filed, the Tatung Group is conservative about prospects for the first two years but expects explosive growth from 2012.

Delta Electronics, a Taiwanese company which has earned a reputation as a green enterprise, cannot but be a part of the energy-efficient LED lighting industry. The company's LED lighting production line began operating last year, and has received orders from Hitachi and Osram. Starting out with road lamps, Delta will gradually expand its LED lighting business to cover all other outdoor and indoor lighting products. The firm expects its LED lighting business to grow five to 10 times within just a couple of years.

Booming Greater China Market
Delta Electronics is optimistic about the future of LED lighting for good reason. In the Greater China market, the governments of both China and Taiwan have announced several LED lighting application plans that will make Greater China the world's largest LED lighting market in the near future.

In response to the worldwide appeal for energy conservation and carbon reduction, the Beijing authorities announced in early 2010 an expansion of their “10 cities, 10,000 LED lamps” plan to “50 cities, 2 million LED lamps.” This plan creates considerable business opportunities to LED lighting manufactures, especially those located in China and Taiwan.

Xie Ji, a director of China's National Development and Reform Commission, has visited Taiwan and held an initial discussion with Taiwanese officials about across-straits cooperation in carrying out China's LED road lamp plans. According to the results of that discussion, Taiwan-based companies will basically be responsible for supplying upstream parts while mainland-based companies will take charge of downstream assembly.

According to an analysis carried out by CLSA Asia-Pacific Markets, China has become the world's largest outdoor lighting market with a consumption of 250,000 LED lamps in 2009 (accounting for around 42% of the global market), and will consume 400,000 units in 2010 (around 46% of the global market). This growth is expected to continue in the years to come.

In Taiwan, the government has also announced plans that will bring considerable business opportunities to the LED lighting industry, even though the island's market is much smaller than China's. In September 2010, the Ministry of Economic Affairs (MOEA) announced that it would allocate a budget of NT$120 million (around US$4 million at NT$30:US$1) to help city and county governments replace approximately 6,000 old road lamps with modern energy-saving LED ones.

The MOEA also proposed another plan aimed at replacing 700,000 existing traffic lights with modern LED lights by October 2011. That will make Taiwan the second country in the world with an all-LED traffic light system. According to the MOEA Taiwan has a total of 1.57 million units of traffic lights, over half of which are already LEDs while the rest still use conventional bulbs. They are the ones that will be replaced.

Brand Marketing

The LED lighting industry not only has great market potential but also offers a niche in which Taiwanese companies are in a good position to develop brands of their own. Neo-Neon LED International, which has been engaged in LED lighting production since 1997, began marketing under its own “Neo-Neon” brand this year, a significant change for a company that established its sales channels as an OEM manufacturer for international buyers. It has teamed up with chain stores such as B&Q, BEST, and 3C to distribute its LED lighting products in Greater China.

“The LED used to be an important industrial part,” noted a Neo-Neon executive, “but lately it has been applied in the production of commercial and residential lighting products. For most consumers an LED light is new product, and we want to adopt a new marketing strategy for this emerging business.”

Genesis Photonics Inc. also introduced its own trademark, “LEDplus,” this year, and has expanded its sales network through major store chains in both China and Taiwan. In the past the company mainly served as an LED lighting supplier to construction companies, and has earned a good reputation in Japanese market; more recently, however, it has diversified into consumer products and hopes to develop sales under its own brand name.

Advanced Connectek Inc., which was originally set up to make connectors, began producing LED lighting products three years ago and has obtained patents from five countries for its JUSTLED LED lighting series: the YLED Table Lamp, Pipe LED Emergency Lamp, T-Tech LED Color-Changing Lamp, and Nature, Apollo, and Aviva pendant lights, all claimed to provide energy savings of at least 20% compared with traditional lamps. Other advantages of these lights include a high power factor of 90%, minimized flickering, and low temperature.

The Mlux Lighting Co., established in 1983 as an OEM manufacturer for international lighting buyers, has gradually diversified its businesses to reduce its reliance on the OEM business. Recently it has launched several LED lighting models of its own design. Its triangular LED Road Lamp is especially attractive, for both its creative functions and innovative shape. The glass or acrylic cover is firmly attached to the lighting pole to keep insects and water out. The triangular shape is also distinct from the shape of traditional round road lamps, and presents a very modern and sleek look suitable for city use.

The Buckingham-Business Lighting Co. is another firm that focuses on developing innovative lighting products that sport its own design and carry its own brand name. The company turns out a wide range of lighting products including track lights, spot lights, indirect lights, wall lamps, and pendant lamps. Its newly-launched 75 Track Light Series features unique functions that are protected by several patents, affording great convenience with a special structure that makes the lights compatible with both traditional and modern LED bulbs. The series has an adjustable track that can be formed into various shapes--“Z,” “日,” and “田,” among others, thus broadening the track light's application.