The first half of 2016 has flown by quickly, with the LED industry entering a mature phase and stabilizing growth rates, it is gradually losing its liveliness.
Looking back to the first half of 2016, new terms emerged among the tide of acquisitions and price wars. The keywords can be summarized as five large niche lighting markets, four key markets, three competitive technologies, changes in two major products market positions, and one new technology term.
Five niche lighting markets
Price wars in recent years caused LED profits to plummet, and forced manufacturers to search for more profitable markets. Impacted by different automotive manufacturers carbon reduction policies, many manufacturers were attracted to automotive LED lighting sector, but its high technology entry threshold limited the number of successful LED makers. It is projected that maturing technology would attract growing volume of manufacturers.
According to LEDinside’s latest research report, the global automotive market growth eased in 2Q16, but the trend of replacing traditional bulbs with LEDs continued strongly. More mature and developed markets adapted large volumes of LEDs, while emerging markets gradually caught up. It is estimated in 2016, exterior automotive LED lighting market value reached US $1.57 billion, and its Compound Annual Growth Rate (CAGR) reached 6% from 2016 to 2020.
There is no doubt that UV LEDs profited the most during first half of 2016, and with a high gross margin it attracted a lot of international companies including Nichia, Seoul Semiconductor, Nikkiso and others to deploy their market strategies. Chinese domestic manufacturers including EpiTop, Qingdao Jason, Lattice Power, and Honglitronic which recently changed its name to Honglizhihui, have also joined the UV LED bandwagon.
“It is estimated the UV LED market value will reach US $356 million by 2020,” said Joanne Wu, Assistant Research Manager of LEDinside. “UVA LED products will mostly be applied in curing market, including food packaging, adhesive curing, medical curing, and many other curing application markets.”
The most difficult aspect of this sector is high customization demands, which requires manufacturers to work closely with curing equipment manufacturers. From chip wavelength, optic module design, UV adhesives, and cooling systems to provide a comprehensive equipment solution. UV-C LED applications include germ killing and purification markets, and holds great market potential and lucrative product profits. Manufacturers in Japan, U.S. and Korea have continued to invest in related R&D. UV-C LED technologies still require breakthroughs to improve product efficiency, lifetime, and requires market tests.
The year 2016 marks China’s thirteenth 5-year plan, smart city was frequently mentioned in multiple municipal and province government proposals and reports. Several committee members also recommended the development of smart cities, placing it under the center spotlight. Smart lighting is one of building blocks of a smart city, and under the promotion of new policies, it will initiate a new round of developments. In 2014, global smart lighting market size reached about US $1.54 billion and is expected to grow exponentially to US $14.35 billion by 2019.
Especially during first half of 2016, Chinese telecommunication giant Huawei and ZTE also joined in smart lighting, which created new opportunities in the sector. Smart lighting, a portal for smart homes, smart cities and IoT, also attracted investments from many large IT enterprises, which boosted smart lighting volume on the market. This not only revolutionized the entire lighting industry it will also create a big impact on the industry.
LED grow lights
Grow lights are not new in the industry, but it is an emerging niche market. Following big international enterprises Sharp and Osram’s advancement in the field, Chinese manufacturers are also catching up. LED grow lights have created a new craze in 2016, and even was approved by Chinese leader Xi Jinping.
Global LED grow light market value has grown exponentially since 2013 to reach US $100 million by 2014, and will reach US $500 million by 2017 based on market statistics.
As man controlled lighting in plant growth factories matures, combined with traditional agricultural technology advantages in the future, semiconductor lighting and automatic technology and network messaging technologies will all become important in global semiconductor industry developments.
Since 2016, VR, drones, and robot technology have advanced rapidly. Changes in IR LED growth from the past and present can be marked by smartphones IR LED demands for retina recognition and CCTV or surveillance systems, while VR, robots and drones fall under the large umbrella of future applications, and are viewed as the future growth momentum for IR LEDs.
LEDinside’s survey during first half of 2016 showed IR LED market penetration rose in VR, robots, and drones, moreover IR LED market demands skyrocketed in 2016. These new applications added on top of automotive, security, surveillance and consumer electronic applications.
Growing demands in these sectors led to increased IR LED market penetration in other markets, where Asia Pacific has become the world’s largest IR LED market. It is projected the global IR LED market CAGR will reach 9% from 2015 to 2020.
To be continued…
Resource from LEDinside News