Is CoB LED Slowly Losing Its Grip on the Chinese Automotive Lighting Market?

Automotive CoB LED is a segment that the LED industry pays less attention to for two reasons. First, CoB has been a niche market with a market scale far less than SMD's. Second, this segment is only one of the applications that adopt CoB LEDs. It’s quite a small market, so why discussing it now?

LEDinside has recently visited a few automotive LED packaging companies, and found CoB LED when mentioned by most of the LED manufacturers is now most associated with the low-end automotive LED space. In order to deeply understand the shift of CoB LED's position in the market, LEDinside interviewed major automotive LED companies in China.

(Image: Wikipedia)

When the Popularity Fades

After fixing issues of low luminous efficiency, severe light-induced degradation, and low reliability, CoB LED entered the market in 2010 and became the new rising star in the commercial lighting sector. As the mainstream packaging manufacturers in China poured more investment in the production of CoB LED, its price started to fall.  More CoB LEDs with better performance/cost ratios emerged and it has become a competitive type of LED light source. Because the light quality of CoB LED is far better than that of a single high-power LED package, its penetration rapidly expanded in the commercial lighting market after 2014. Currently, CoB LED has been the mainstream solution for directional lighting. Meanwhile, it quickly gained ground in the mid-power lighting application market.

Over the past two years, CoB LED has maintained its fast-growing momentum. Statistics shows that in 2015, CoB LED product sales occupied about 30% of that of the entire range of LED light sources. In 2016, the market scale of CoB LED for general lighting (including ceramic or EMC packaged CoB LEDs) reached USD 580 million.

After a years-long severe price war, CoB LED’s price stabilized and nearly touched the rock bottom. At the same time, the highly profitable automotive lighting market became the new blue ocean for CoB LED. Suddenly, loads of CoB LED manufacturers entered the automotive CoB LED market. They did have great harvest in this sector, but good days didn't last long. The ocean turned red. The segment soon turned into a battlefield of bitter price wars.

Lattice Power’s Vice Marketing Director Dandy Liu expressed that, in the past, a tremendous amount of automotive CoB LEDs were shipped to the automotive aftermarket. However, most of them only circulated in the low-end market. What's worse, in light of the fact that they suffered from many quality problems, the adoption of CoB LED significantly dropped, leaving quite a negative impression on clients outside China.

BMTC Vice President Hai-bin Zheng mentioned that he does not agree with that ‘Performance/cost ratio is everything.’ Zheng believed that automotive CoB LED primarily focuses on the automotive aftermarket. Because of the market’s relatively low barrier of entry, it inevitably sees more bitter price wars. By his definition, any market that witnesses some degree of product standardization can be considered an ocean turned red.

Shi-quan Wei, Vice President of Tong YiFang Optoelectronic Technnology, spoke that Tong YiFang started the manufacture of automotive CoB LED for the automotive aftermarket in October 2015. As the market scale expanded, the number of enterprises entering this segment grew, hence severe price wars. That’s also when enterprises roll out their most competitive product portfolios.

Manufacturing CoB LEDs for vehicle lamps is not an easy task as one might imagine. There is a certain level of technical barrier to overcome. It requires deep knowledge and solid technology background to differentiate a product in terms of optical and thermal properties. Following that, the collaboration with channels in the high-end aftermarket is necessary. In this way, price will not be the only concerns for the packaging companies.

Wei continued that in the coming two years, the market scale of aftermarket CoB LED headlight will considerably increase. More firms will join this sector, which will trigger a reshuffling in all aspects including technology, quality, price, service, production, and production speed. Those who can fight until the end take it all. Tong YiFang has been increasingly investing in related equipment and technologies, attempting to tailor its products towards clients’ requirements to secure its position in the CoB LED market.

CoB LED Can Be Worth More

LED, as a mature light source, is used for lighting, TV and smartphone backlight, and digital signage. However, applications of automotive lighting that use LED are very limited, especially in the original equipment (OE) supply chain. Chip-on-Board (CoB) LED is one of package types adopted in automotive lighting. That includes regular CoB and CSP-CoB packages.

Dadao Semiconductor's Gang Li said that when automotive lighting applications adopt CoB LEDs, whether luminous flux can be high or not mostly depends on the size of light-emitting areas. CoB package is a surface light source, not a linear light source. Although CoB LED's light emitting area can be designed into a rectangular shape, with the limit of its package pattern, the goal of ‘small size package, huge current, and high reliability’ still cannot be realized. 

Lots of light that is emitted from outside the linear area becomes unwanted scattered light and glare. They can neither improve the illumination, nor maintain beam shapes and desired light distribution. Focusing on increasing luminous flux brings a more severe thermal dissipation issue. Also, issues such as serious glare and excessive luminous intensity distribution pose potential risks.

Therefore, most of the industry professionals believe that even if the cost of automotive CoB LED headlights is low, its reliability and beam shape is worse than other competing products. Hence, they are considered entry-level products. 

APT Electronics Product Manager Guiping He explained that there are four advantages of CoB LED products in the automotive lighting sector. First, their heatsinks are shorter, the thermal resistance is lower, and the reliability is thus higher. Next, CoB LED is an integrated surface light source. It emits light evenly, without double images. This feature meets the requirements of automotive lighting. Third, CoB LED's luminous density is high, featuring strong transmittance. Objects some distance away can be well lit by CoB LEDs. Fourth, CoB LED automotive headlights cover a long distance, providing drivers a vision as wide as possible even at night to enhance driving safety. All considered, CoB LED lighting products do not exactly belong to the range of low-end products.

Wei expressed that it seems just a general picture that the space of automotive CoB LED is suffering a severe price war. It looks like a red ocean, but it does not just yet. This is actually a segment with technical barriers. Most firms that want to or prepare to enter this sector focus too much on the price wars. If they do not have a foundation of technology and quality and only focus on how to win in those price wars, they will eventually lose it all. From Tong YiFang's perspectives, price is not the only concern. It is the capability to improve all factors that support its position. 

Fujian Lighting’s Chairman Xihong Wan said that the reason why a vehicle light with CoB LEDs is considered to a low-priced product is that some manufacturers use it on a low-price product. If CoB LED is manufactured with quality materials such as a ceramic substrate of Aluminium Nitride (AlN), and adopts state-of-the-art manufacturing technologies such as eutectic bonding, it surely deserve a better reputation.
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