LEDinside Analysts Unveil 2014 LED Market Trends at Seminar in China

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LEDinside analysts revealed 2014 LED market trends during the LEDinside Chief Analyst Market Seminar organized by TrendForce at Shenzhen Marco Polo, China on Dec. 19, 2013. Renowned LED brands including Cree, Samsung Electronics, HC Semitek Corp., Refond and Honglitronics attended the seminar. The main agenda of the seminar was to discuss global LED trends in 2014 and Chinese market developments. LEDinside analysts approached the subject from lighting, backlight and package perspectives to give a comprehensive analysis. Below are some of the trends observed by LEDinside analysts:

Globally LED market value for lighting application exceeds 30% for the first time in 2014  

Roger Chu, Research Director, LEDinside. (LEDinside)

Speaking on global LED package trends, LEDinside Research Director Roger Chu noted the LED market for lighting application was growing quickly with market value reaching US$ 370 million in 2013, taking a 29% share in LED package market value. LED package for lighting applications in 2014 will reach 33% and become the largest LED application, said Chu. As the lighting market grows rapidly, top international manufacturers are also quickly deploying LED lighting application strategies. LED manufacturers have especially expanded and strengthened investments in mid power LED and COB products to provide lighting manufacturers with better cost/performance (C/P) products. In addition, some LED manufacturers are also entering downstream LED lighting product sector by acquiring distribution channels or forming strategic alliances to improve their competitiveness in the LED market for lighting application. Companies need to recognize their core competitiveness and available resources to acquire footing in the intensely competitive lighting market, which allows no room for regrets, said Chu. 

Chinese LED package manufacturers on the rise with vigorous lighting market developments

Allen Yu, Analyst, LEDinside. (LEDinside)

In regards to China’s LED packaging industry development, technological progress has continuously evolved around the theme of lowering costs, analyzed LEDinside Analyst Allen Yu. The use of new materials, formation of new specs, and emergence of new technologies have all been aimed at lowering lm/$, while maintaining product quality. LEDinside estimates LED lighting shipments will grow 68% to reach US$ 17.8 billion in 2014. With LED backlight market penetration rates saturates, and other applications still in the development phase, the key to companies success will be whether they will be able to grasp potential opportunities in the rapidly developing global lighting market. 

Jack Kuo, Associate Manager, LEDinside. (LEDinside)

Direct-type LED TV high penetration rates to impact LED market value for backlight application in 2014

Spurred by Chinese TV manufacturers demands, LED TV market penetration rates reached 95% in 2013, pointed out LEDinside Assistant Manager Jack Kuo. Kuo projected LED TV will completely replace CCFL by 2014, and annual LED TV shipment volumes will grow 3% to reach 209 million units. Although, LEDmarket value for backlight application is estimated to reach US$ 2.41 billion in 2014, YoY growth rate is expected to fall 17%. The reduction of LEDs in direct-type LED TVs to about half the number used in edge-type LED TV has been the main cause. Another cause behind the increased LED TV shipment, but lowered product value, has been direct-type LED TV penetration rates hitting 60% in 2014. 

For TV manufacturers, 2014 will be a price competitive year, said Kuo. Even if LED TV penetration rates near 100%, there have been no signs easing in TV price competitions. TV manufacturers are no longer solely focused on LED costs, but are looking at the entire LED BLU costs, including costs for PCB and lens. Therefore, manufacturers that want to enter the LED backlight TV supply chain in 2014 must be cost competitive, while providing comprehensive LED backlight solutions. 

Arrival of low price era in China’s LED lighting market

Figo Wang, Analyst, LEDinside. (LEDinside)

The most important trend in the 2014 LED lighting market will be manufacturers shift from solely focusing on branding effects to include manufacturing on economics of scale, said LEDinside Analyst Figo Wang. As a result the LED industry will be more concentrated than conventional lighting industries.

Furthermore, as manufacturers introduce large numbers of LED bulbs into automated production equipments, current cost structures will be restructured to give manufacturers a new competitive edge.  Based on observations of the Chinese LED bulb market prices, there has been exponential growth in bulb types. Distribution of LED bulbs lm/$ has been a standard trend, with core value shifting downwards. This reflects increased transparency in market prices, and companies rigid pricing strategies. Competition has been overtly focused on Lumens, resulting in the lack of diversified product designs to meet different consumer preferences.

In the Chinese domestic market, LED shipment has mainly been focused in commercial lighting, with LED bulbs and downlights becoming the main products exported. Export data shows soaring LED lighting product exports, and the conventionally low season in 4Q13 will be performing better than expected. 

Terri Wang, Analyst, LEDinside. (LEDinside)

Probing international lighting manufacturers development strategies

The most important trend in 2013 global lighting market has been plunging LED bulb prices, which is expected to drive the worldwide LED replacement trend, said LEDinside Analyst Terri Wang. Compared to 2013, LED bulb demand will soar 86%, and LED tube demands will climb up 89% in 2014.

From 2013 to 2014, global LED manufacturers’ main strategies have been lowering product prices; obtaining subsidies and government project bids; acquiring distribution channels; advancing technology; promoting smart lighting; and improving brand image, said Wang.