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TrendForce:Demand Rise, the US Is to Take Place of Japan as The Next Potential Market of LED Light Industry

1 November 2012 LED

According to a report on the global lighting industry made by the LEDinside, a subsidiary of TrendForce, an international research institute, the LED market value for LED lighting application market in 2012 is 2.66 billion US dollars, which was 23.5% higher than that in 2011. The greatest markets come from architectural lighting market and indoor lighting market, such as par lamp and light bulb. In addition, because the prices continue to go down, LED lighting market demand rose due to an increasing penetration rate and a decreasing price. A look at the global LED light bulb market reveals that the retail prices of LED light bulbs equivalent to 40w incandescent bulbs in Korea, the US and the UK have gone down to the sweet point of 10 US dollars, making consumers more willing to purchase LED lighting products.

Medium & Low Power LEDs to Dominate The Lighting-Class LED Package Market in 2013

An observation of the LED package market shows that the cost of LED lighting manufacturing will greatly go down due to a transition of the LED specification. High power LED used to be dominant in lighting application. However, the prices of LED lighting products are expected to go further down since Samsung and LG introduced the medium-power 5630 package. According to LEDinside, the lumens-per-dollar of high power LEDs are less competitive than those of the medium or low power LED packages such as 3014 package or 5630 package, leading to a continual transition of medium or low power LED from backlight application market to lighting application. Such being the case, the prices in the LED lighting market in 2013 will be extremely competitive. The surplus output of LED plants particularly urges upstream vendors to increase their activation. It’s expected that they will continue to produce medium or low power LED packages and launch them to the lighting market, contributing to a reduction of 20 percent in medium or low power LED product price. Consequently LEDinside point out the medium or low power LED products in 2013 are going to be the dominant modules in the LED lamp and LED tube light markets, where the prices will remain highly price competitive.

LED Lighting Penetration Rate and Practical Application To Show A Huge Jump in 2013

An observation of the LED lighting market gives insight. As LEDinside indicates in its 2013 LED industry prospect analysis report, the earthquake in Japan in 2011 has made the Japanese more energy saving awareness, and as a result they are more willing to learn about and purchase LED products than people in other countries. In addition, the LED prices have greatly decreased, thus encouraging the Japan's lighting manufacturers to develop LED lighting products in 2012. Studies show that the global LED lighting penetration rate has reached 17.6%, observed from leading lighting manufacturers worldwide. The Japanese lighting manufacturers set a particularly high average penetration target of 30%-50%, and even some vendors set a higher target of 70%-90%.

The doubled shipment of Japan’s LED bulbs in 2011 was mainly driven by the increased energy-saving awareness, which helped advance the popularity of LED bulbs for household use. LED bulbs can last 40,000 hours even if used for 50 hours per week. In addition they don’t need replacing in ten years, which makes them more endurable than incandescent ones. LEDinside anticipates a small increase of 2.6% in LED lamp shipment to 29.5 million in the Japanese market in 2012. Tube Lights and value-added lighting fixtures are to replace lamps as the driving forces behind the market development in 2H12 and 2013.

As to the US lighting market, utility and power companies in many places across the US have conducted a rebate program for consumer purchases of Energy Star or DesignLight Consortium certified LED light bulbs, tubes and lamp fixtures. The rebate program is likely to encourage consumers to transform or replace their facilities with more user friendly and energy saving ones. Since 2012 LED commercial lighting suppliers have increased, leading to an obvious increase in price. In addition, the commercial buildings, including office buildings, stores, warehouses and hotels, have been increasing in size and number, consequently raising the need for LED commercial lighting market. On the other hand, regulations and requirements for four inch tube lights were made by DesignLighting Consortium (DLC) in response to the emerging LED commercial lighting market. Judging from above, it is likely for the US to take place of Japan as the next major LED lighting market.

In the first half of 2012 the bidding projects of LED street lamp across China did not proceed as planned because fiscal subsidy policy has not been determined and been conducted yet. Besides, the European debt crisis has affected the market demand, crippling the business of LED lighting manufacturers depending on exports. However, since the Ministry of Finance, the Ministry of Science and Technology and the State Development and Reform Commission have confirmed the fiscal subsidy bidding project, it is expected that subsidies of 1.6 billion RMB Yuan will be released from the end of 2012 to 2013 to promote the LED lighting applications. Calculated with subsidies of 30%-50% offered by the government, the project will drive a LED lighting market of four billion RMB Yuan worth of market demand.

The lack of infrastructures in emerging markets interests leading manufacturers like Philips, medium or small lighting manufacturers, and LED makers. They hope to develop a new market there by introducing industrial lighting and portable lighting with energy-generating and energy-saving concept to suit local lifestyles and environments.

Primary Manufacturers Across the World Set to Explore the LED Lighting Market

According to LEDinside, the top ten LED lighting manufacturers have a 31% market share, with the rest 69% shared by other thousands of LED lighting manufacturers around the world. The lamp fixture market is more competitive than LED light bulb market because more manufacturers are involved. LED lamp prices play a key role in the popularity of LED lights. A research made by LEDinside indicates that 40W equiv. LED lamp price showed a steady monthly decline at a rate of 6%-8%, and reached a sweet point at USD 10 before 1H12, which was earlier than expected.

The 60W equiv. LED lamp will go mainstream because of their high luminous flux. With more aggressive price strategies and product plans, the price is expected to reach a sweet point in early 2013. According to LEDinside, the future development of LED lighting industry will show a polarized development. The LEDs and modules will be standardized and generated on a large scale while LED lamp fixtures series will be gradually customized and focus on local development. LEDinside also anticipates that Phillip, which enjoys a complete resource-based industry value chain and an advantage of having many channel mixes, will occupy about a 10% market share of the global LED lighting market.


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