- The LED Materials Market was valued at USD 10.51 billion in 2019 and is expected to reach USD 16.83 billion by 2025, at a CAGR of 8.16% over the forecast period 2020 - 2025. The market of LED materials is highly driven by the rising adoption of technological advancements, such as artificial intelligence, the Internet of Things (IoT), and automation, globally. LEDs are increasingly being used in applications, such as high-definition television display, camera, camcorder, telecommunications, optical fiber communication, and TV remote controls.
- The automotive industry is leading the adoption of LED lighting both in the interior and the exterior segments. This has led to many OEMs producing LED lighting materials exclusively for the industry. Almost every major player in the industry has a separate division for producing LED material for the automotive industry. OSRAM, one of the leading producers lighting industry and a pioneer in providing lighting for the automotive industry, has supplied lighting equipment to several manufacturers. For instance, BMW i8 and Audi R8 LMX were fitted with Laser lights produced by the company. This lighting trend has opened up several new avenues for the LED industry, which was suffering on account of low-profit margins from conventional lighting segments.
- As stated by the International Energy Agency (IEA), the global LED uptake has increased substantially from a market share of 5% in 2013 to 40% of global residential lighting sales in 2018. In fact, in the past decade, Indoor lighting segment was the primary driver of the LED industry. The agency further adds that LED sales in the residential sector have overtaken fluorescent sales.
- However, going forward, the outdoor segment is expected to overtake the residential segment in driving demand for LEDs. This will be primarily due to the effort of the developing countries to try to upgrade their infrastructure. For instance, according to the ‘The Future of Street Lighting’ report by IoTUK, one-third of the world’s roads are still lit by technology dating back to the 1960s. The report further adds that these streetlights typically account for 40 percent of the city’s overall costs. These infrastructure gaps provide a real opportunity for LED companies across the world. The report adds that the global penetration rates of LED streetlights is expected to reach 89% by 2026.
Scope of the Report
A Light Emitting Diode or LED is a device that emits light when an electrical current is passed through it. Earlier LEDs were able to produce only red light, but modern LEDs can produce multiple colors. With recent advances in technology it has made it possible for LEDs to produce white light. LEDs commonly used for indicator lights on electronic devices have several other applications, including electronic signs, backlights, and flashlights.
Key Market Trends
Government Policies Mandating the Use of Energy-Efficient Lighting
- Several policy measures that mandate the use of LED lights are expected to drive the adoption of LEDs both in the indoor and outdoor segments. Moreover, the increased investment in infrastructure is likely to lead to the growth of outdoor lighting. National governments and local civic authorities are expected to take advantage of the lower energy consumption and affordability of LEDs to balance out local energy needs and international carbon footprint mandates. Many countries have mandated the use of LEDs as streetlights in order to reduce the fatalities due to poor lighting at the corners and turnings.
- Some of the countries like China in anticipation of this boom have pushed for developing more efficient LED production capabilities to be rightly positioned to capture market share in the future. China has started taking the lead in the manufacturing of LEDs as prices of production have fallen to USD 3-5 per lamp, benefiting from substantial financial subsidies and incentives from the government.
- Other regions like the EU have made policy regulations to phase out halogen and fluorescent lamps. In 2018, the EU Member States voted to saturate the EU with LEDs by 2021. The EU also introduced minimum performance and quality standards for LED lamps and luminaires across the household, commercial, industrial, and street lighting segment.
- Moreover, many countries are trying to rapidly increase the use of LED bulbs in households through direct policy interventions. For example, India has brought a disruptive change in the use of LEDs through its national UJALA program, which uses bulk procurement to offer bulbs that are 50% more efficient than other lamps typically available. In India alone, there have been more than 350 million LED lamps sold since 2015. The program aims to sell 770 million by 2019.
Asia-Pacific is Projected to be the Fastest Growing Market
- Asia-Pacific or APAC is expected to lead the LED lighting market thereby contributing the lion’s share of revenue to the global LED market. This can be attributed to the growth of LED use in India and China along with the untapped potential of several emerging countries of this region. According to the China Solid State Lighting Alliance, LEDs accounted for 70 percent of China’s general lighting market in 2018.
- Moreover, Asia-Pacific is now a hub of original equipment manufacturers (OEMs) of various lighting products. The other driving factor for the growth of LED Market in this region due to the substantial investment in R&D in new LED products in countries like Vietnam, South Korea and Taiwan.
The competitive landscape in the Global LED market stands fragmented due to the presence of a large number of international and regional actors making the market highly competitive. There are several players that are losing market share due to several emerging entrants from countries like China. Some of the recent developments in this industry are as follows:-
April 2019 – GE, announced the sale of Current that was run by the GE business unit to American Industrial Partners (AIP), a New York-based private equity firm. Current’s portfolio includes LED and traditional lighting solutions, in addition to intelligent controls, sensors, and software.
March 2019 - Sweden’s Fagerhult Group has completed the acquisition of Italy’s iGuzzini illuminazione S.p.A, for USD 421.6 million in Cash and Stock. It designs and manufactures indoor lighting and outdoor lighting luminaries.
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1.1 Study Deliverables
1.2 Study Assumptions
1.3 Scope of the Study
2 RESEARCH METHODOLOGY
3 EXECUTIVE SUMMARY
4 MARKET DYNAMICS
4.1 Market Overview
4.2 Introduction to Market Dynamics
4.3 Market Drivers
4.3.1 Government Policies Mandating the Use of Energy-Efficient Lighting
4.3.2 Increasing Applications and Decreasing Prices leading to Growth of LEDs
4.4 Market Restraints
4.4.1 Lack of Awareness about the Benefits of LEDs
4.5 Industry Value Chain Analysis
4.6 Industry Attractiveness - Porter's Five Force Analysis
4.6.1 Threat of New Entrants
4.6.2 Bargaining Power of Buyers/Consumers
4.6.3 Bargaining Power of Suppliers
4.6.4 Threat of Substitute Products
4.6.5 Intensity of Competitive Rivalry
5 MARKET SEGMENTATION
5.1 By Industry Tier
5.2 By Application
5.2.1 General Lighting
5.2.4 Other Applications
5.3.1 North America
5.3.4 Rest of the World
6 COMPETITIVE LANDSCAPE
6.1 Cree Inc.
6.2 DuPont de Nemours, Inc.
6.4 Mitsubishi Chemical Corporation
6.5 Evonik Industries AG
6.6 Koninklijke DSM N.V
6.7 Sanan Optoelectronics Co. Ltd
6.8 Sumitomo Electric Industries Ltd
6.9 DOWA Electronics Materials Co., LTD.
7 INVESTMENT ANALYSIS
8 MARKET OPPORTUNITIES AND FUTURE TRENDS