LEDinside: Lighting Trends and Future Market Outlook

    Rounding out the end of this year’s LEDforum was Trendforce Corporation senior analyst Jack Kuo with the LED market outlook for 2014.   

    The LED market is growing with LED lighting applications expanding. LED lighting has grown from 22 percent in 2012 to 26 percent in 2013, according to Kuo, and is expected to grow further in 2014 to 30 percent. The market has benefited a lot by the introduction into smartphones by companies such as Samsung and LG. Smartphone applications surpassed feature phones in 2Q13 and have continued to dominate.

    Observations by Kuo show that 2014 will experience a surge in LED package market value for lighting application in 2014. Growth is expected mainly in areas such as commercial, industrial and outdoor lighting with an overall market increase of 47.8 percent, rising from US$3.2 billion in 2013 to US$3.95 billion in 2014. Penetration rates are likewise to increase, rising 32.7 percent for LED lighting, 20 percent for bulbs, and 15 percent for tube lighting.

    Mid-power LEDs surpassed high-powered LEDs for the first time this year with the adoption of package specifications 5630, 3030, and 2835 by manufacturers such as Nichia and Seoul Semiconductor. Mid-power LEDs rapidly increased from 2012 to 2013, rising from 29 percent to 43 percent. 2014 is expected to continue rising, reaching 46 percent at US$3.99 billion. The continual increase in supply volume will drive prices down through 2014.

    Competitive retail prices for LEDs are driving market demand growth. With companies such as Walmart and CREE launching consumer friendly priced LED bulbs valued under US$10, LED lighting penetration rates continue to rise. According to Kuo, lowered LED prices and application costs will drive up LED demand and penetration rates.

    The LED bulb and tube market are expected to see an increases in penetration rate in 2014, with LED tube penetration to rise to 15 percent and bulbs up 20 percent. To meet new LED bulb and tube market demands in 2014, an estimated 250 MOCVD equipment will be required said Kuo. For MOCVD expansion, LED chip manufacturers need to wait for MOCVD manufacturers to ship the machine, install, and make adjustments. This greatly increases the possibility of large LED chip manufacturers acquisition of small manufacturers to expand production capacity.

The overall outlook for the LED lighting market in 2014 is positive with market value projected to soar 47.8% to reach US$35.3 billion by 2014. However, due to fierce competition, rapid price reduction, and improved technology performance, manufacturers will need to expand production capacity in order to face these challenges in the fast growing LED lighting market.


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