Published on January 30th, 2014 | by Roy L Hales3
LED Market Expected To Grow Over 12-fold To $25 Billion In 2023
January 30th, 2014 by Roy L Hales
The market for light-emitting diode (LED) luminaires, or optimized permanent light fixtures, is expected to grow more than 12-fold over the next decade – from $2 billion today to $25 billion in 2023 — according to the latest report out from Lux Research.
Christopher Hwang, the lead author of “Casting the Light: Illuminating the Opportunities in 2023’s LED Luminaire Market,” says the team’s research is based on observing industry trends, interviews with key technology developers, and interviews with component suppliers.
In its news release, Lux states, “LED package costs will fall over 80% to less than $4 for a standard 3,500 lumen recessed modular luminaire on improved efficiency, increased manufacturing yields and utilization. As a result, the bill of materials (BOM) will fall 35%, from $85 in 2013 to $55 in 2023.”
Hwang mentioned elements that are already present in the industry, but have not come into play. For example, three years ago the Chinese Government was providing up to 50% of the funds needed to purchase a MOCVD (metal organic chemical vapor deposition) tool. MOCVD’s normally cost $2 million and a lot of Chinese companies took advantage of this offer, but they have not yet ramped up production.
The industry is still young and LED package efficiency has increased from 70 lm/W to 130 lm/W in 2012. This trend is expected to continue.
“As LED packages rapidly fall in cost and improve in efficiency, the cost structure of LED luminaires will shift, and present opportunities in other components such as secondary optics and drivers,” said Hwang.
“This trend, in turn, influences the rate of adoption of emerging technologies, such as alternating current (AC) LEDs and high-CRI LEDs in recessed modular, high-bay and roadway luminaires,” he added.
“The secondary optics market will be the single biggest growth opportunity in components, growing to $6.9 billion in 2023, while the drivers market will reach $4.9 billion.”
High-CRI LED is expected to remain a niche product used in high occupancy applications, that will only attract about 9% of the market. A High-CRI LED residential bulb was marketed for $10 in March 2013, but this is an exception in a sector whose primary concern has been the quality of color rendition. The specifications are generally high, which makes CRI one of the most expensive LED products.
Hwang identifies the optics market as a huge opportunity. “The LED package market will be dwarfed by opportunities in optics and drivers. The secondary optics market will be the single biggest growth opportunity in components, growing to $6.9 billion in 2023, while the drivers market will reach $4.9 billion.”
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