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Published: July 2017
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Report Code: SE11086
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Available Format:
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Category : Electronic System and Devices
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Light Emitting Diode (LED) symbolizes a semiconductor device that emits light when electric current passes through it. LED illumination is being utilized to offer radiance for a number of imaging or optical applications including indoor, outdoor, architectural, automotive and horticultural. The growing adoption of energy-efficient lighting solutions across the globe is a primary factor attributing to the growth of global LED lighting market. The increased investment in infrastructure enhancement, along with continuous price erosion of LED lighting solutions is driving the demand of the global LED lighting market. Increasing demand of LED lighting solutions for various applications of general lighting has also benefited the penetration of LEDs in recent years. However, development of alternative technologies and lack of awareness regarding installation costs and payback periods are some of the key factors hindering the growth of LED lighting market across the globe.
GLOBAL LED LIGHTING MARKET SPLIT, BY END-USE APPLICATION, MILLION UNITS (2013 – 2023)
Growth Drivers
Decreasing prices of LED lights is one of the major factors driving their adoption in commercial, industrial and residential sectors across the globe. Key players operating in the global LED lighting market, including Osram, Sylvania and Philips, are looking forward to further reduce the price of their LED products significantly.
LEDs offer a number of significant advantages over traditional lighting technologies, including efficiency, diversity of colors, quick on/off time, frequent on/off cycling, long lifetime and shock resistance. These features have been encouraging the consumers to switch to LED lightings from its traditional substitutes. According the projections from the U.S. Department of Energy (U.S. DOE), lighting energy consumption in the U.S. is expected to reduce by 15% till 2020 and, by 40% till 2030 under conservative forecasts. The adoption of LED lights is one of the bases for these projections. The prices of LED lights are declining due to the fall in LED component prices, which is consequently expected to drive the adoption of LED lighting across the globe.
Trends
During the recent years, the demand for non-visible LED lighting has increased, owing to the infrastructure enhancement in China, India and other South-East Asian countries. The use of LED lighting is growing rapidly in applications such as general lighting and automotive. The increasing expenditure on infrastructure development in India, China and other developing counties in Asia-Pacific has increased the penetration of LED lighting in the region.
Owing to the intense pricing competition in the white LED market, LED manufacturers are probing for inventive or special lighting applications to enhance their profitability. For instance, manufacturers are shifting their focus to LED applications in the non-visible light spectrum such as Ultraviolet (UV) or Infrared (IR) LEDs. Revenue generated from non-visible LED applications is significantly less as compared with white light LED lighting applications. Non-visible LED applications have a very high technology barrier that needs to be overcome. Technology barriers of non-visible LEDs leads to the customization of demands, and the need to work closely with system manufacturers. Therefore, non-visible LED products’ gross margins are evidently better than that of white LEDs.
Restraints
There are several benefits associated with LED lightings. however, some of their limitations, including thermal properties, voltage sensitivity, efficiency droop, expensive production and costly maintenance, are hindering their market growth. The development of alternate technologies along with lack of awareness related to installation costs and payback periods, are the other major factors restraining the growth of the global LED lighting market. Research and development is needed to overcome these drawbacks of LED lighting.
The evolution of some of the alternatives of LED lighting, such as laser-based lights, is likely to hinder the growth of the global LED lighting market, during the forecast period. For instance, University of California, Santa Barbara innovated an alternative to LED lighting, powered by a laser diode and inorganic phosphors. The new laser-based technology is highly energy efficient, emits low-heat, generates high-powered white light and holds up well under a variety of normal and extreme conditions. Additionally, the researchers have also achieved a host of other color temperatures for LED lighting, with high color rendition, which leads to the broadened application areas of these lights.
The global LED lighting market is highly fragmented due to the presence of large number of regional and international players across the globe. Due to the fragmented nature of the market, the competition among the global and regional players is high. It has also been observed that several large players are losing their market share owing to the competition posed by new entrants, especially from China. The major companies are introducing energy efficient products. For instance, Philips Lighting introduced new offerings under LED lighting segment, which reduces energy and maintenance costs, while providing improved light quality. Some of the major companies operating in the global LED lighting solutions include Philips Lighting Holdings B.V., Osram Licht AG, General Electric Company, Zumtobel Group and Cree Inc.
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