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Critical factors for slow growth of LED market in 2015

Critical factors for slow growth of LED market in 2015

By BizLED Bureau

Mar 1, 2016: According to trade pundits, the year 2015 was considered to be an astonishing year for LED lighting market. As manufacturing of LED products have increased manifold, prices for lamps are already under US$ 10 and even US$ 5 in some cases. However, the estimates suggest around 85% unit growth for LED lamps with 45% revenue growth which is not close to expected.

A published report claimed that there has been a decline in revenues for top 15 LED manufacturers. Few other factors have been critical to this decline and we will discuss them briefly in the section below:

Firstly, the price downfall has been massive. Other than that, economic crisis in China saw exit of many LED players from the market. If reports are to be believed, roughly 4000 LED companies in China exited in 2015 which led to manufacturers lower their prices. In LED lighting segment alone, mid power LEDs saw price fall to 30-40% and high power LEDs price fell by 20-30% in the second half of 2015. Few companies went bankrupt in the business due to total incompetency on price.

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The other prominent factor was the unexpected slowdown of smartphone as well as tablet market. This directly affected manufacturers who were anticipating better growth in these areas. For example, If smartphone giant Apple consider using OLED displays in their smartphone or tablets, this will impact the mobile market in a grand way.

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Other prominent factor which led to the decline was foreign exchange rate. It had a big impact on foreign companies’ revenues in US dollars.  As dollar was strong against other foreign currencies, any transaction went against the profit of manufacturers.

Let’s hope that year 2016 will see an upward trend in LED lighting for manufacturers, retailers and consumers alike.

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