Several market research firms recently weighed in on how the LED market is likely to evolve over the next few years. Their consensus: Expect to see rapid growth with general illumination uses becoming more important. But LED makers will see more competition which will make it increasingly hard for them to make a buck just fabricating LEDs alone.
The market research firm Groom Energy now put the size the 2012 North American enterprise (i.e. used by big companies) LED lighting market at $630 million in annual revenues. The firm says LEDs will probably grow 40% annually through 2016 and will exceed $1 billion in 2013.
Despite the emphasis on room lighting, the biggest market for LEDs still lies in LED backlight unit (BLU) display systems, and that market is still growing as well, says Databeans, Inc., another market research firm. But you need fewer LEDs to realize a BLU than in previous generations thanks to high-brightness (HB) LEDs and LED configurations, such as new "edge-lit" displays. Ditto for automotive LED headlights.
And in mobile platforms such as smart phones and tablets, conventional LED backlights are now often being replaced by OLEDs. Even so, Databeans still expects the general LED industry to see strong growth over the next few years from deeper penetration of solid-state lighting into the general illumination market.
LED TV was expected to drive the LED industry last year but the reality was quite different, says the market research firm Yole Développement. LED makers sold fewer devices into the TV market than they expected, and several Asian vendors entered the LED market, driving down the price of these devices. So packaged LED volume was about 30% lower than expected and revenue shrank last year. The situation improved somewhat in 2012 thanks to wider use of LEDs in general lighting.
Yole figures packaged LED revenue will reach $11.4B this year and will peak to $17.1B by 2018. It sees growth being driven both by TV displays and general lighting. It figures 2014 will mark the time when general lighting uses will start to account for more than 50% of the overall packaged LED business.
Yole also notes that the capacity for GaN LED epitaxy has risen dramatically in dramatically in the last couple years, mostly because of a huge boost in the number of production facilities erected in China -- there was a factor x20 rise in the number of the reactor facilities there between Q4 2009 and Q1 2012.
Yole says most emerging Chinese LED epiwafer and die manufacturers are still far behind in technology maturity and LED performance. Most Chinese manufacturers still can't make LEDs for large display and general lighting applications.
All in all, the long life of solid state lighting (SSL) technology will totally change the lighting market by dramatically lengthening replacement cycles, Yole says. In addition, most of the value in SSL is in the top of the value chain (module and luminaire levels). That means companies now only involved in making LEDs will likely develop strategies of vertical integration to get more bang for the buck.
The Groom Energy report can be ordered here: http://www.giiresearch.com/report/gm248855-enterprise-led-commercial-industrial-market-trends.html
The Databeans Inc. report can be ordered here: http://www.giiresearch.com/report/data208644-2011-leds.html
The Yole Développement report can be ordered here: http://www.giiresearch.com/report/yd138472-led-industry.html