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2015: Another Tough Year For Packaged LEDs

Lumileds only top ten LED manufacturer to record positive growth, says IHS

When it comes to pricing and market expectations, 2015 was obviously another tough competitive year for packaged LED vendors, with challenges in both backlighting and lighting, writes Jamie Fox, IHS Technology's principal analyst for Lighting and LED, in his latest analysis and commentary on packaged LED company rankings.

The US dollar was much stronger in 2015 than 2014: against almost every major currency, which largely explains why packaged LED revenue fell so much last year. When measured in Yen and Euro, the packaged LED market grew 5 percent and 10 percent, respectively. (Had exchange rates remained the same as they were in 2014, the market would most likely have been much flatter measured in US dollars.)

As global LED revenue declined 8 percent in 2015 Lumileds was the only LED manufacturer ranked in the top ten to record positive growth in 2015, gaining share as well as ranking position. Even though the company suffered significant uncertainty last year, as Philips attempted to sell the business, Lumileds managed to come in ahead of Samsung every quarter since the fourth quarter of 2014.

Lumileds continues to offer a strong competitive position in automotive LED, general lighting, and mobile camera flash categories, and the company's market share continues to benefit from having only a small position in the soft backlighting market, which includes mobile phones, notebooks, tablets and monitors.

Revenue share for Cree, LG Innotek and Everlight declined in 2015 compared to the previous year; however, Everlight improved its ranking position, while the others did not. Everlight's rise comes despite losing share, because Cree and LG Innotek revenues fell even further.

Cree and the major Korean players all experienced double-digit revenue declines in 2015. Cree is increasingly focused on its lighting business, as the company's component business is no longer growing as quickly as it once was. Cree has long positioned itself - with some justification - as a higher quality vendor than others. 

While this strategy has suffered as the market has commoditised, Korean companies managed to position themselves successfully as the low-cost option in general lighting in 2012 and 2013. Even so this strategy faced difficulties in 2014 and 2015, as MLS and other Chinese companies offered even lower prices with similar quality. In 2015 Samsung, LG Innotek and Lumens were caught in the middle - offering neither the lowest price nor the best quality - with no obvious business strategy to address the issue.

Seoul Semiconductor is a pure-play LED company that is committed to the market and has more experience in LEDs than the other major Korean players. While the company gained share in 2015, revenue declined slightly. Nichia, Osram Opto and MLS all maintained their share in 2015, declining slightly in revenue in line with the market.

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