April 19, 2017: The light-emitting diode (LED) market evolution continues with a steep decline in cost per unit, high energy-efficiency ratings, market shift toward these lighting solutions, and favorable government initiatives driving adoption. The Internet of Things (IoT) will disrupt the market, shifting focus from energy efficiency, product reliability, and O&M costs to include controllability, connectivity, and technology integration in smart buildings and smart cities.
“New technologies driven by IoT, such as light-as-a-service (Laas), will usher in connected lighting and living, enabling better energy management and new services and business models like financing and leasing,” said Energy & Environment Research Analyst Sabnam Gafoor. “On the flip side, new business models and an influx of new players from the Asia-Pacific will make the future market a fragmented one.”
Global LED Lighting Market (2017 Update), part of Frost & Sullivan’s Homes & Buildings Growth Partnership Service program, finds that the LED lighting market accounted for almost 60 percent of global lighting in 2016 and was worth $47,303 million, growing 18.1 percent from the previous year. The research provides a detailed analysis of growth opportunities, technologies, revenue forecasts and competitor dynamics in North America, Europe, Asia-Pacific, the Middle East and Africa, and Latin America. Strategic moves of market majors such as Philips Lighting, Osram GmbH, GE lighting and Cree Inc are also discussed.
The Asia-Pacific region contributes the most to global market revenues. Express construction in many Asian countries, government endorsement of energy-efficient lights in India and China, and the existence of a large number of LED chip and package factories in China, Japan, South Korea, and Taiwan are factors driving growth.
Developments in LED lighting include:
The residential LED lighting market will witness a year-on-year growth rate of 16.7 percent this year.
IoT-enabled LED lighting will fast-track the growth of connected buildings and their services.
LED lighting is likely to account for 80 percent of the total lighting market by 2020, creating an $80 billion market. By 2025, LED will account for 98 percent of the global lighting market.
India, Asia-Pacific, Latin America, and Africa are set to record the highest growth rates.
Although residential, outdoor, and retail make the highest contributions at present, office, industrial and hospitality are expected to be future growth sectors.
Organic LED (OLED) lighting is gaining popularity as a solid-state lighting (SSL) technology due to its ability to emit warm light over large areas, provide color comfort, and bring improved form factors to the lighting industry.
“To remain competitive and relevant in an evolving ecosystem, LED players should seek to improve manufacturing efficiencies by adopting a larger wafer size, utilise intelligent lighting through integrated control devices, implement active and passive cooling techniques for device longevity, and replace expensive substrate materials with cheaper alternatives,” noted Gafoor.