HB-LED revenues contend with supply growth, demand slowing

October 7, 2011 — Revenues for high-brightness light emitting diodes (HB-LEDs) grew 108% to $11.2 billion in 2010, driven by applications in TV backlight units, according to a new market report by Strategies Unlimited. The party is quieting down though, as expanding supply and a slowdown in overall TV demand in 2011 pushed LED prices drastically lower.

Strategies Unlimited revised down its 2011 HB-LED revenue estimate to $12.3 billion. LED prices plummeted 20-40% recently, except for certain specialized applications. This industry correction will take weaker and/or newer LED manufacturers out of the market. Look for consolidation in China. Strong manufacturers with deep pockets to survive fluctuations will survive, Strategies Unlimited reports.

Revenue will peak in 2014, hitting $16.2 billion, before dropping off to $15.3 billion the next year. Once lighting takes over as the growth driver for HB-LED adoption, predicted to occur in 2015, revenues will again increase.

The LED price drop could lead to higher LED adoption, particularly in lighting, where ELDs are about 30% of the bill of materials (BOM). Strategies Unlimited reports that high-quality, large-volume 1W cool white packaged LEDs with delivery in September 2011 are being quoted around $0.65.

In other application sectors, LED revenues for signs were $1.1B in 2010, growing to about $1.6B in 2015. Signage overall will grow at 14% CAGR through 2015, with the vast majority coming from Chinese manufacturers.

LEDs for mobile devices — smartphones, tablet computers, notebooks — will experience declining revenues 2010-2015, despite fast-growing device adoption. Here, price suppression will help bring LED revenues down -4.1% compounded annually.

Figure. HB-LED market by revenue and year-over-year (YoY) growth rate 2010-2015. SOURCE: Strategies Unlimited.

Automotive applications brought in $1.1 billion in LED revenues for 2010, thanks to China-based growth. As China cools off in 2011 and the Japan tsunami disrupted supply chains, 2011 will see only 5% growth in this sector. Increased use of LEDs in daytime running lights and headlamps will fuel revenue growth for LEDs in exterior automotive lighting at 10%, compounded annually.  Falling prices and saturation of LEDs in instrument panels — reaching 90% in 2015 — will erode LED revenue for that segment by 2% over the period.

Strategies Unlimited released


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