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Trends in the high- brightness LED lighting market
Jessie Lin, DIGITIMES Research, Taipei [Monday 13 February 2012]
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Digitimes Research projects that the global high-brightness LED industry will see year-on-year growth of 13.4% in 2012, with output rising to US$10.1 billion. The main reason for this is the huge drop in MOCVD demand to just 200 units for the whole of 2012, combined with the weakness of the LED industry in the first half of 2012. These factors make it unlikely that the industry will be able to return to the high levels of growth seen in 2010, while installations of new MOCVD equipment are likely to be concentrated in the second half of 2012.
Abstract
HB LED market, 2008-2014 (US$m)

Digitimes Research projects that the global high-brightness LED industry will see year-on-year growth of 13.4% in 2012, with output rising to US$10.1 billion. The main reason for this is the huge drop in MOCVD demand to just 200 units for the whole of 2012, combined with the weakness of the LED industry in the first half of 2012. These factors make it unlikely that the industry will be able to return to the high levels of growth seen in 2010, while installations of new MOCVD equipment are likely to be concentrated in the second half of 2012.

Japan, South Korea and Taiwan will together account for some 61.3% of the high-brightness LED market in 2012, and it is therefore fair to say that the trend towards Asian dominance of the LED industry is becoming even more pronounced. China will see growth as high as 30% as 150 MOCVD units, the delivery of which was delayed, finally commence production in 2012; however, it is worth noting that the China industry remains centered on medium- to low-power LEDs.

In terms of applications for high-brightness LEDs, large-size LED backlights will remain the biggest sector with 34.1%, with lighting trailing behind with 16.7%; however, Digitimes Research forecasts that by 2014 the situation will be reversed, with large-size LED backlights accounting for 28.7% and lighting for 33.4%.

The LED light bulb market will continue to grow rapidly in 2012, with new products largely consisting of replacements for 60W incandescent bulbs. It is worth noting, however, that the price of 60W replacement bulbs with a brightness of 800lm currently remains high at around US$40. Moreover, the "sweet spot" in terms of pricing versus demand differs widely between regions, from US$25 in Japan and US$15 in Europe and North America, to as little as US$7 in emerging nations. For this reason, conventional energy-saving light bulbs will continue to account for a high proportion of the market in 2012, while the penetration rate for LED light bulbs will reach 5.4%, equivalent to shipments of 1.05 billion bulbs.

Despite only achieving a penetration rate of 6.6% in the overall lighting market in 2011, LED lighting has enormous potential for growth. Many countries have launched incentive and subsidy policies to spur on the development of LED lighting. Japan has set a 2015 target for LED lighting as a proportion of the general lighting market of 50%, while South Korea has set a 2015 target of 30% and China has set a 2015 target of 20%; measures to meet these targets will be introduced in phases. LED technology also continues to improve, with the US Department of Energy (DOE) setting a target for white light LED components to achieve a luminous efficacy of 200lm/W by 2014, while prices are projected to fall to US$2/klm; manufacturers' own technical progress is likely to be ahead of this schedule.

For all these reasons, Digitimes projects that global market penetration rates for LED lighting will rise from 11.3% in 2012 to 25.8% in 2014, while output value will grow from US$16.5 billion to US$41.9 billion over the same period.

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