Organization Forecasts LED Lighting Applications to Expand at Sizzling Rate
2013/05/13 | By Ken LiuMarket consulting firm NPD DisplaySearch of the United States forecasts LED lighting market will double from 16 million units in 2012 to an estimated 33 million this year before tripling by 2016 worldwide.
In its LED Lighting Market and Forecast Report released on April 16, the organization ascribes the vigorous growth in the market mostly to significant expansion in manufacturing capacity, falling prices, environmental concerns, and government incentives.
Based on NPD DisplaySearch projection for 2016, global demands for LED lighting equipment, including spot lights, luminaries, street lights, light bulbs and light tubes, will reach 90 million systems in 2016, marking a market penetration of 26%, up from only 5% in 2012.
The organization notes continued growth in commercial applications, government incentive programs, and consumer demand for energy-saving technology are diving up the demands, with highest growth appearing in LED-based tubes that replace fluorescent tubes used in commercial applications, LED-based street lights, and LED luminaires–innovative designs that produce light across various shapes and sizes.
Demand in LED Lighting Chips
“LEDs are playing a leading role in the lighting industry, driven primarily by government incentive policies and consumer demand for more efficient light sources with advanced technologies such as wireless and color control,” noted Steven Sher, Analyst, NPD DisplaySearch. “This increased demand will manifest over the next three years, as consumers look to replace their traditional light bulbs with more efficient LED lighting options.”
According to the market-research organization, Japan has been the largest market for LED lighting applications since 2011, and this dominance will continue through 2016, driven mostly by the adoption of LED bulbs, spot lights, fluorescent tubes, and luminaires.
LED lighting growth in China will be higher than other regions from 2012 to 2016 due to government policies such as the 12th Five-Year Plan, which is already driving demand for LED street lights.
North America and Europe are also experiencing increased demand for LED lighting applications through 2016, particularly for LED fluorescent tubes.
LED Lighting Demand by Region
The market opportunity for LED lighting is playing out in the context of a stagnant market for LED backlights, currently the largest application for LEDs. In 2014, general illumination will pass display backlight as the largest application for LEDs, the organization estimates.
In addition, heavy investments in metal organic chemical vapor deposition (MOCVD) equipment by LED makers, notably in China, are to blame for excessive supply of LED chips worldwide. While causing intensive competition and steep price slumping, which have eaten into profits at LED makers, the surplus has also boosted higher LED penetration in lighting market, the organization notes.
Wild competition has prompted many LED makers to pursue vertical integration, in which the LED chip makers integrate the chip, phosphor, and control circuits to make lighting engines, as well as LED package makers integrate the lamp assembly.
However, NPD DisplaySearch emphasizes success in LED lighting market requires optical design and the development of brand and channel strategies in addition to technical integration.