LEDs revenues grow even as prices fall through 2016

July 16, 2012 — Light-emitting diode (LED) prices are declining, as revenues are growing through 2016, according to a report from Strategies Unlimited. Trends include multi-chip packaging and different LED power levels for different applications.

Global revenue for LED packages hit $2.04 billion in 2011, according to Strategies Unlimited.

Between 2010 and 2011, LED prices declined by more than 25%; for some suppliers the decline was more than 40%. The decline in prices stimulated demand for LED lighting products, increasing overall revenue by 46.3%. LED suppliers diverted excess manufacturing capacity to produce LEDs for the lighting industry, picking up the slack from the slower-than-expected display backlighting sector.

LED prices will continue to decline 2012-2016 at a 13% compound annual growth rate (CAGR). In the same period, CAGR for revenues for LEDs in lighting is forecast to grow 10%.

In 2011, all major players in the LED industry made a big push in the sales of multi-chip packages (MCP). The use of high-lumen-output packages helps reduce the size of the light source as well as the time for luminaire design development.

Use of high-power LEDs continues where high lumen output from compact light sources is required in applications such as streetlights, flashlights, recessed lights and PAR replacement lamps. In the forecast period, more luminaire manufacturers will use MCPs, while ambient lighting applications will use low- and mid-power LEDs for diffused lighting applications such as troffers and linear fluorescent tube replacement products.

Figure. Forecast for LEDs in lighting, by application, 2010-2016 ($M). SOURCE: Strategies Unlimited.

Although the demand for white LEDs increased to 84% of the total revenues, the lighting industry is increasingly using remote phosphor with blue LEDs or red LEDs with cool white LEDs to make warm white light. Also read: Phosphor trends for LED manufacturing

China was the largest LED market in 2011, with 49% of the revenues, with high penetration rates in outdoor, industrial and building decoration lighting applications. The improvements in quality of LED lighting products for retail displays — refrigerated and general merchandise displays — is forecast to be the fastest growing segment.

This report is the latest in a series of reports on LED Markets from Strategies Unlimited. Strategies Unlimited specializes in market research and strategic consulting directed
at photonics systems and components. The company is a research unit of PennWell Corporation, a global media and information company that also publishes Solid State Technology. Strategies Unlimited’s new report, The Market for High-Brightness LEDs in Lighting Applications: Market Review and Forecast- 2012, is now available. Learn more at www.strategies-u.com.

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