Global market for packaged LEDs for lighting to nearly double in three years

LED technology is projected to grow 96% from 2013 to 2016 thanks to falling prices and increased mainstream use worldwide.

11/13/2013


Amid falling prices and rising consumer acceptance, light-emitting diode (LED) technology is taking over the lighting business, spurring a 96% increase in packaged LED revenue in the market from 2013 through 2016.

Global revenue for packaged LEDs used in lighting applications is set to soar to $7.1 billion in 2016, up from $3.6 billion in 2013, according to a new report entitled “Packaged LEDs – World – 2013” from IHS Inc. (NYSE: IHS).

The figure below presents the IHS forecast of revenue for packaged LEDs in lighting. A packaged LED is an LED die with a protective covering with contacts that enable it to be directly soldered to an electrical circuit.

“As retail prices for LED lamps have fallen, it’s become more obvious that they are an attractive alternative to conventional light bulbs, providing long-term savings in energy and replacement costs,” said Stewart Shinkwin, market analyst, lighting and LEDs, for IHS. “Because of this, shipments of LED lamps for lighting are set to increase dramatically in the coming years, rising to 2.4 billion units in 2016, up from 520 million in 2013. The rapid expansion of the lighting market will come as a major boon to suppliers of packaged LEDs, which are seeking the next growth opportunity following the slowdown of the backlighting business.”

LED technology is projected to grow 96 percent from 2013 to 2016 thanks to falling prices and increased mainstream use worldwide. Courtesy: IHS

Looking back at backlighting

In the past, rapid growth in the packaged LED market was driven by LCD display backlighting in applications such as mobile phones, notebooks and TVs. The majority of these applications have completed their transition to LED technology. Therefore, while LED demand for these products remains stable, annual unit growth largely is limited to single-digit percentages.

The lighting market, however, is predicted to provide the next wave of explosive growth for packaged LEDs. 

Let there be lighting

In 2012, the lighting sector became the largest end application for the packaged LED market, having finally overtaken the TV backlighting market. Market saturation for LED backlighting has resulted in a number of leading suppliers shifting their focus and development resources toward the lighting industry.

With LED lamp retail prices decreasing and more consumers realizing the cost savings LED lamps can provide over long periods of time, penetration of LEDs into the lighting market is set to increase significantly.

Light fight

Along with great opportunity, the projected growth in LED lamps will result in intensified competition among suppliers vying to capture market share.

This competition will continue to further drive down prices. IHS forecasts average selling prices for packaged LEDs in lighting to fall to $0.19 in 2018, down from $0.25 in 2016 and $0.41 in 2013.

The price erosion, in turn, will reduce the consumer payback period for LEDs, helping to increase adoption. However, declining profit margins will be undesirable for suppliers.

LED lamp penetration is already significant in a number of lighting applications such as the retail and hospitality sectors. However, it is the residential sector that IHS forecasts will provide the largest opportunity for packaged LEDs.

Packaged LED revenue in the residential sector is forecast to grow to nearly $2.7 billion in 2016, up from an estimated $850 million in 2013. Manufacturers that carve out share early on in this market could garner significant returns as the market booms.



No comments
The Top Plant program honors outstanding manufacturing facilities in North America. View the 2015 Top Plant.
The Product of the Year program recognizes products newly released in the manufacturing industries.
The Engineering Leaders Under 40 program identifies and gives recognition to young engineers who...
Your leaks start here: Take a disciplined approach with your hydraulic system; U.S. presence at Hannover Messe a rousing success
Hannover Messe 2016: Taking hold of the future - Partner Country status spotlights U.S. manufacturing; Honoring manufacturing excellence: The 2015 Product of the Year Winners
Inside IIoT: How technology, strategy can improve your operation; Dry media or web scrubber?; Six steps to design a PM program
Getting to the bottom of subsea repairs: Older pipelines need more attention, and operators need a repair strategy; OTC preview; Offshore production difficult - and crucial
Digital oilfields: Integrated HMI/SCADA systems enable smarter data acquisition; Real-world impact of simulation; Electric actuator technology prospers in production fields
Special report: U.S. natural gas; LNG transport technologies evolve to meet market demand; Understanding new methane regulations; Predictive maintenance for gas pipeline compressors
Warehouse winter comfort: The HTHV solution; Cooling with natural gas; Plastics industry booming
Managing automation upgrades, retrofits; Making technical, business sense; Ensuring network cyber security
Designing generator systems; Using online commissioning tools; Selective coordination best practices

Annual Salary Survey

Before the calendar turned, 2016 already had the makings of a pivotal year for manufacturing, and for the world.

There were the big events for the year, including the United States as Partner Country at Hannover Messe in April and the 2016 International Manufacturing Technology Show in Chicago in September. There's also the matter of the U.S. presidential elections in November, which promise to shape policy in manufacturing for years to come.

But the year started with global economic turmoil, as a slowdown in Chinese manufacturing triggered a worldwide stock hiccup that sent values plummeting. The continued plunge in world oil prices has resulted in a slowdown in exploration and, by extension, the manufacture of exploration equipment.

Read more: 2015 Salary Survey

Maintenance and reliability tips and best practices from the maintenance and reliability coaches at Allied Reliability Group.
The One Voice for Manufacturing blog reports on federal public policy issues impacting the manufacturing sector. One Voice is a joint effort by the National Tooling and Machining...
The Society for Maintenance and Reliability Professionals an organization devoted...
Join this ongoing discussion of machine guarding topics, including solutions assessments, regulatory compliance, gap analysis...
IMS Research, recently acquired by IHS Inc., is a leading independent supplier of market research and consultancy to the global electronics industry.
Maintenance is not optional in manufacturing. It’s a profit center, driving productivity and uptime while reducing overall repair costs.
The Lachance on CMMS blog is about current maintenance topics. Blogger Paul Lachance is president and chief technology officer for Smartware Group.
This article collection contains several articles on the vital role that compressed air plays in manufacturing plants.
This article collection contains several articles on the Industrial Internet of Things (IIoT) and how it is transforming manufacturing.
This article collection contains several articles on strategic maintenance and understanding all the parts of your plant.
click me