LEDinside, a division of the global market research firm
TrendForce, held an exclusive analyst symposium on April 15 at Taipei World Trade Center Nangang Exhibition Hall. During this special meet-and-greet event, LEDinside analyst based in Taiwan and Mainland China gathered together to share their latest findings with attendees.
The main topic of the symposium was the growing niche or “Blue Ocean” markets for
LED technology, such as UV LED, IR LED and automotive LED products. The LEDinside team also gave attendees a comprehensive overview of market outlooks and opportunities from a regional as well as a global perspective, with focuses on China and the emerging markets.
Below is a summary of presentations made by LEDinside analysts:
Scale of the global LED lighting market to arrive at US$28.6 billion in 2016; developments in each regional market will vary
The development of the LED lighting market will be driven by a wide range of regionally based factors this year, according to LEDinside analyst Terri Wang. Localization of production and smart technologies will influence the LED lighting market in Europe. The strong U.S. dollar, subsidy policies, the rise of domestic manufacturing and new infrastructure projects will encourage the rapid growth of LED industrial and commercial lighting sectors. The room for growth in Japan’s LED lighting market is quite limited since the country has adopted the technology early on and the local market is saturated with products.
Nonetheless, LED lighting will have relatively larger growth potentials in the country’s industrial and commercial lighting application markets. In China, demand for LED solutions will concentrate in the industrial lighting and architectural sectors. The large number of suppliers in the Chinese market also means that price competition there be fierce.
Opportunities in the emerging markets, such as the Southeast Asian countries, are growing too as demand for lighting increases in these areas with each passing year. LEDinside estimates that the scale of the global LED lighting market will reach US$28.6 billion in 2016, with LED products making up 34% of the lighting product sales worldwide. The market scale is forecast to hit US$31.9 billion in 2018, when LED products will represent 47% of the total sales.
Alternative display technologies to become stronger threat to LED backlight market this year
OLED started to grab headlines in technology news in 2015. Major South Korean panel makers incorporated this technology into their product roadmaps earlier on and have been aggressively promoting their OLED products. Recent rumors about Apple’s future devices have also encouraged other panel makers to devise competing OLED solutions. Besides OLED, advancements in Quantum Dot and Micro LED are also creating new uncertainties in the display industry’s technological path.
LEDinside analyst Philip Chang pointed out that the value of the LED backlight market has already shrunk considerably due to falling prices and declining LED usage volume per product. LED backlight suppliers now also have to contend with the increasing use of the self-illuminating OLED panels by the display industry. Those LED manufacturers that hope to retain their places in the display supply chain must therefore develop strategies to deal with the threat of replacement technologies.
First-tier manufacturers expand into niche applications; the value of automotive LED market to reach US$611 million in 2020
According to LEDinside, the global market value of interior automotive LEDs stood at US$605 million in 2015 and will grow slightly over the next five years to US$611 million in 2020.
LEDs for automotive panels will have the fastest growth in market value compared with other interior automotive applications, with a CAGR of 3% during 2015~2020. During the same period, the global market value of exterior automotive LEDs will also grow by a CAGR of 8% on average. Applications such as directional signals and fog lights will have above average growth, while LEDs for high/low beams will see their market value reaching a CAGR of 11% during 2015~2020.
Duff Lu, research manager for LEDinside, said first-tier international LED manufacturers have gradually lower the shares of backlight and lighting products in their product mixes. Instead, they are developing automotive and other niche applications. First-tier manufacturers will be first to take advantage of the steady demand growth in the automotive market and initially enjoy a dominating presence. However, second-tier manufacturers will be able to break into the market when they show customers that they can also provide quality products.
In sum, the automotive LED market will enjoy booming growth and see new entrants in the next five years.
Market outlook for UV and IR LED products is positive this year and more manufacturers are expected to take on these two applications
LEDinside estimates the global market value of UV LED to reach US$140 million in 2016 and US$356 million in 2020. Strong demand for UV-A LEDs in the curing application market and advances in UV-C LED technology will drive the growth of the entire UV-LED market.
Joanne Wu, assistant research manager for LEDinside, said the UV LED market is regarded as a blue ocean market because it offers high ASPs and profit margins. The 2016~2018 period will see new entrants to the UV LED business. Nonetheless, those companies that only specialize in either LED chips or packages are still going to face stiff price competition in this niche market.
As for the IR LED market, the outlook is bright on account of rising demand across related application markets, including surveillance systems and biometric solutions using iris and facial recognition technologies. LEDinside projects that the market value of IR LEDs (excluding optical sensors) will arrive at US$278 million in 2016. In 2020, this figure will grow to US$525 million, of which U$174 million will come from IR LED products for the surveillance application.
Regarding IR LEDs for optical sensors, Wu noted that the market demand for them is also strong this year, with branded wearable device and smartphone vendors being the main demand growth contributors.
Chinese LED chip and package suppliers to gain more market shares this year as their international rivals start to become less competitive
China’s LED industry had a difficult 2015 because of the slowdown in the global economy. The scale of the country’s LED chip market shrank for the first time by 7% year on year to US$2.02 billion. As for China’s LED package market, its scale increased by just 2% over 2014, arriving at US$8.8 billion. Domestic package suppliers saw an annual revenue growth of 7% on average in 2015, while revenues of foreign suppliers fell by 10% year on year on average. Nichia, CREE and some South Korean manufacturers also experienced notable revenue declines in the Chinese market.
LEDinside analyst Allen Yu said the capacity of the Chinese LED chip industry will continue to expand in 2016, resulting in domestic suppliers having greater market shares. In the package market, Chinese companies will also increase their sizes through mergers and acquisitions. The overall competitiveness of foreign package suppliers will weaken as their technological advantages start to diminish and the price pressure increases in the market.
Global demand for LEDs will continue to grow in 2016 and further price declines will be limited
LEDinside’s data reveal that value of the global LED market (including visible and non-visible LED products) totaled US$14.32 billion in 2015, down 3% from the prior year. Among the LED component manufacturers, Nichia still topped the global revenue ranking for 2015, followed closely by OSRAM Opto and Lumileds.
Many manufacturers tried to undercut each other, and competition became so intense that the prices of mainstream LED packages fell by 40% or more last year. Aggressive pricing, along with the rising U.S. dollar, caused revenue declines for many manufacturers.
Nonetheless, the overall demand will keep growing this year, according to Roger Chu, LEDinside research director. LED usage volume is expected to increase in most applications, with the exception of LED backlight due to the rise of OLED panels. Manufacturers will still feel pressure to lower their prices, but most products are already being sold at a loss.
The level of competition has been too excessive, and some prices are approaching cash costs. Hence, the downtrend in the market is expected to moderate this year as there is not much room for further price decline.
Gold Member
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LED Supply Chain - Backlight / Lighting / Automotive / Display / UV LED / IR LED
Major LED Package Ranking in Applications
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LED Industry Demand and Supply Data Base |
Demand Market Forecast:
2015-2020 market demand in backlight, lighting, automotive, display, UV, infrared, SSL like and son on |
Excel |
1Q (February) / 3Q (August) |
Supply Market Analysis:
1. Chip market revenue (external sales, total sales)
2. WW new MOCVD chamber installation volume / WW accumulated MOCVD chamber installation / WW new and accumulated MOCVD by K465i
3. Epi wafer market demand (total / by size) |
LED Chip Market Analysis:
Top 10 Chip vendors' MOCVD installation, wafer capacity, and revenue |
LED Package Market Analysis:
LED package vendors' revenue and LED revenue
Top 10 LED package revenues in backlight, lighting, COB, automotive, and display |
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LED Industry Price Survey |
Price Survey - Sapphire / Chip / LED Package / Bulb
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Excel |
1Q (February) / 2Q (May) / 3Q (August) / 4Q (November) |
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LED Market Demand and Supply Analysis |
Demand Market |
PDF |
2Q (May) / 4Q (November) |
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Backlight |
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General Lighting |
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Automotive |
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Display |
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Infrared LED Market (2Q) / UV LED Market (4Q) |
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Supply Market |
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MOCVD Market |
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Wafer and Chip Market, URT |
Supply and Demand Sufficiency Analysis
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If you would like to know more details , please contact:
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Joanne Wu +886-2-8978-6488 ext. 912 joannewu@trendforce.com |
CN
TW
EN
