The value of the global LED market is estimated to grow 3.4% annually to US$14.8 billion in 2016, according to LEDinside, a division of TrendForce. The LED industry will again be under tremendous competitive pressure in 2017, and participants will need to accelerate their entries into more profitable niche markets such as fine-pitch LED displays, UV LEDs and IR LEDs. LEDinside forecasts that the value of the global LED market will total US$15.4 billion, up 4% from 2016.

The latest analysis “2017 Global Lighting Market Outlook” by LEDinside, a division of TrendForce, finds that LED lighting market to worth US $29.6 billion in 2016 and is to rise to US $ 33.1 billion as of 2017. Meanwhile, the penetration rate of LED lighting is to reach 52%. Thanks to regional lighting development, LED lighting is to account for 23% of total lightings in Europe by 2016, which is the highest across the world. The second and third highest region are to be found in North America and China. However, Asia- Pacific region is to witness fastest growth rate in LED lighting.

GE Lighting’s decision to leave the Asian lighting market has sent another shock wave within the global lighting industry. LEDinside, a division of TrendForce, pointed out that less than 10% of GE Lighting’s total lighting revenue comes from China. Other markets in Asia also make up a very small percentage. At the same time, pricing and brand competition in the region has intensified. By withdrawing from this region and reinforcing its presence in North America, GE Lighting has also shown that the industry’s thinking has shifted from expanding channel network and market share to maintaining profitability and one’s survival.

India’s lighting sector has enjoyed accelerated development recently. The scale of the country’s LED lighting market in particular is projected to expand 47.1% year on year in 2016 to US$1.14 billion, according to the 2016 Indian Lighting Market Report by LEDinside, a division of TrendForce. By 2020, the Indian LED lighting market is forecast to grow to US$1.715 billion. Joanne Wu, assistant research manager for LEDinside, said the Indian government plans to make their country the export hub for lighting products going to East Asia. At the same time, major international lighting vendors such as OSRAM and Toshiba have also set up production bases in India for supplying the global market. Driven by domestic and overseas demand, the Indian LED lighting market is expected to witness soaring growth in the near future.

China has become a major battleground for local and international LED package suppliers as the competition in the global LED market continues to intensify. The 2016 Chinese LED Chip and Package Industry Market Report by LEDinside, a division of TrendForce, finds Nichia held on to its position as the revenue leader in the Chinese package market for 2015, while Lumileds rose to second place and MLS followed at third. The top 10 LED package suppliers in the 2015 global revenue ranking generated a total of US$3.3 billion, down 15% from 2014. Together they contr...

The scale of China’s LED package industry grew just 2% annually to US$8.8 billion in 2015, according to the 2016 Chinese LED Chip and Package Industry Report by LEDinside, a division of TrendForce. The weak performance of the Chinese LED industry last year was mainly attributed to the global economic slowdown.   LEDinside analyst Allen Yu said the market is showing some signs of rebound this year as branded lighting vendors have been restocking their inventories, thereby generating demand and boosting the capacity utilization of LED chip suppli...

China Chinese automotive light’s development is still price-oriented when adopting LEDs. Current spec for interior automotive lights and RCL are similar with lighting LEDs and even backlight LEDs, the LED penetration rate is relatively high and similar to international level. As DRL is closely linked to the recognition of vehicles, it has seen rapid development in Chinese market over the past few years. Moreover, some Chinese automotive makers turn to low-power LEDs for DRL applications. Therefore, the market penetration of DRL in China rose to 47% in 2016.   Slow mid and high-power LED in Chinese automotive market: Due to the high technical requirement of high-power LED product segments, such as high / low beam and fog light. These light sources are mainly from international source and have low penetration rate.   US Car Market Supply Chain US automotive makers mainly adopt automotive lamps from Visteon and Hella. As North America is notorious for its tariff protection, automotive lamp factories and modules are constructed relatively close to each other, focusing on market opportunities and the reduction of assembly costs. Mexico is a popular location of such plants over the past few years.  As the suppliers of headlamps and tail lamps are not necessarily the same, the main concern lie in design and mass production ability. Meanwhile, the suppliers of tail light and interior lights are usually the same as the technical difficulties is relatively low and can be potentially purchased together.

In written comments filed with the U.S. Department of Energy by the National Electrical Manufacturers Association (NEMA), U.S. lighting manufacturers reaffirmed their position that consumers should have multiple options when selecting the type of light bulbs to purchase. NEMA's comments took issue with requirements in a Department of Energy (DOE) proposed energy efficiency rule aimed at forcing the exclusive adoption of LED bulbs, thereby denying consumer choice and disrupting the ongoing and rapid market transition to energy-efficient lighting.

LED manufacturers are branching into the niche application markets as the competition in their industry expands. Currently, entering the automotive LED market is regarded as a blue ocean strategy because the market has relatively few contestants and allows for higher pricing. According to the latest Gold Member Report – 2016 LED Market Demand and Supply Analysis by LEDinside, a division of TrendForce, the worldwide market value of exterior automotive LEDs for 2015 is expected to reach US$1.21 billion. This figure is projected reach US$2.29 billion in 2020, translating to a compound annual growth rate (CAGR) of 8% during the 2015~2020 period. Additionally, the market value of standard-power LEDs is gradually declining in contrast to the rapidly rising market value of high-power LEDs. In the future, automotive LED application will take off in the high-power LED market.

2016 LED Market Demand and Supply Analysis

Light-emitting diode (LED) manufacturers are now looking to develop niche application markets that can provide higher margins as the price competition in the LED lighting market has become too difficult for them. Among these niche application markets, ultraviolet (UV) LED has attracted investments from many manufacturers because of its enormous market value. The UV LED market has much higher technological barrier to entry, so prices of its products are several tens of times greater than those of the general LED products. LEDinside, a division of TrendForce, states that the global UV LED market in 2015 is estimated at US$122 million, which is around the same level as in 2014, in its 2015 Global LED Industry Supply and Demand Database Report. The absence of noticeable growth in the market value this year is mainly attributed to the rapid decline in UV-A LED prices (UV-A spectrum is between 320~400nm in wavelength).

 Light-emitting diode (LED) manufacturers had an especially tough year in 2015. “Despite rising LED lighting market demand and the large scale replacement of traditional lighting products, the oversupply situation has caused the average LED sales prices (ASPs) to plunge 30% to 40% year on year,” said Roger Chu, research director for LEDinside, a division of TrendForce. “Growing number of manufacturers have incurred heavy losses and exiting the market.”

LED manufacturers had an especially tough year in 2015. Despite rising LED lighting market demands, and large scale replacements of traditional luminaires, the oversupply situation in the market has caused average sales price (ASP) of LEDs to plunge 30% to 40%. Growing number of manufacturers have incurred heavy losses and exiting the market. With 2016 just around the corner, LEDinside Research Director Roger Chu has listed ten major trends in the market including future LED industry consolidations and technology trends. Listed below are five major trends observed by LEDinside’s analyst team:   1.     Easing LED market growth in the near future Due to the oversupply situation in the LED industry, LEDs ASP prices plunged. LEDinside estimates the global high brightness LED market value in 2015 will increase at an incremental rate of 2% to US $14.52 billion. Even though lighting demands spurred LED usage volume growth, ironically the increasingly energy efficient LEDs are reducing usage volume. Additionally, LEDs still are under immense pressure to further lower prices. Based on these observations, LEDinside projects in the next five years the LED industry Compound Annual Growth Rate (CAGR) is unlikely to reach more than 10% in the future.

The scale of the LED lighting market is growing steadily, according to 2016 Global LED Lighting Market Trends Report by LEDinside, a division of TrendForce. LEDinside estimates that the scale of the LED lighting market will reach US$25.7 billion in 2015 and expand to US$30.5 billion in 2016. The penetration rate of LED lighting is also projected to climb from 31% in 2015 to 36% in 2016.   Joanne Wu, LEDinside assistant research manager, stated that sharp price declines have severely impacted the margins of replacement products such as LED light bulbs and light tubes. Consequently, lighting companies begin to shift their focus to professional lighting markets and hope that increases in government spending, especially in new public projects, will create new opportunities. Sectors with tremendous growth potentials include industrial lighting, commercial lighting and architectural lighting.

2016 Lighting LED and Lighting Market v.s. 2016 LED Backlight Market Trend

This year has been very difficult for companies in the LED industry. While LED lighting products are seeing rising demands and have replaced numerous traditional products in different applications, their average selling prices have gone down by 30~40% due to oversupply. According to LEDinside, the value of the market for high-brightness LED products is projected to grow 2% year on year to US$14.52 billion in 2015. Duff Lu, LEDinside research manager, notes that the industry will undergo consolidation next year with companies merging or being driven out of business. With uncompetitive players leaving, the industry will gradually reorganize itself.

In his management report on 2013/14, CEO Ulrich Schumacher expressed his satisfaction with the development of business: In a year of major changes, the company showed sound development. Schumacher highlighted the dynamic growth in LED revenues, which now represent more than 30 percent of Group revenues, as well as the improved profitability of LED products and the lighting and components businesses.

Recently, at Rubicon Technology’s 2Q08 earnings conference call with industry analysts, the company's president and CEO discussed the future of the LED market.