LED Market Growing At 17 Percent CAGR
According to the latest research study released by Technavio, the global LED market is expected to record a CAGR (compound annual growth rate) of close to 17 percent until 2020.
This research report titled 'Global LED Market 2016-2020', provides an analysis of market growth in terms of revenue and emerging market trends. The market size is calculated on the basis of revenue generated from four segments, including general lighting, backlighting, automotive lighting, and others.
"China supports the largest LED industry in the world and accounts for close to 30 percent of the world production, thanks to tax benefits and subsidies provided by the government to its manufacturers. Even the government of India has launched similar projects for promoting energy conservation, and it is likely to draw massive investments into the sector during the forecast period," said Asif Gani, one of Technavio's lead analyst for semiconductor equipment research.
Technavio breaks down the Global LED market in 2015 as general lighting 40.25 percent, backlighting 29.01 percent, automotive lighting 12.99 percent, and others 17.75 percent
The LED market in the general lighting segment was valued at $5.76 billion in 2015. The residential market is the largest revenue contributor to the general lighting segment. Applications of LED lights for residential purposes include lighting in bathrooms, dining rooms, hallways, and kitchens. LED lights have emerged as the best replacement option for fluorescent lights. They are available in different styles and help reduce energy usage.
In the US, domestic users enjoy federal tax credits known as residential energy-efficiency tax credits for improving the energy efficiency of their homes. Similar incentives formulated by governments across the world will likely boost market growth until 2020.
LED market in the backlighting segment is second-largest market.This segment was valued at $4.15 billion in 2015. The market is witnessing the growing adoption of OLED technology in applications such as smartphones and televisions. OLEDs provide high-quality picture content as well as an overall thin frame. Most LED companies are facing challenges in the market due to price wars and oversupply of LED chips from the Chinese market. This has made companies shift from traditional LEDs to OLEDs.
For instance, prominent vendors like Samsung have drawn their focus away from the LED TV market. Similarly, Osram and Lite-On have found growth opportunities in the IR LED market. Osram's third major business segment is of IR components, and this helps the company develop comprehensive in-house products such as IR LED and IR laser technology.
The LED market in the automotive lighting segment was valued at $1.86 billion in 2015. Although LED certification automotive use takes a long time and the entry barrier for supply chain is high, the profits are attractive. This will likely draw many companies into this segment. Daytime running lights and high-low beam headlights are the two major applications in automotive lighting, which are expected to yield high growth during the forecast period.
As consumers prefer automotive headlights for their aesthetic appeal and small size, the demand for LEDs is anticipated to surge. As the prices of LED lights witness a further decline, the adoption of automotive LED lighting systems will gradually shift from premium to medium-priced car models in the future.