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LED Market Continues to Grow Rapidly, Transitioning to Lighting Applications

Wed, 08/24/2011 - 4:27am
General Electric

Santa Clara, CALIF.,August 24, 2011As shown in the latest DisplaySearch Quarterly LED Supply/Demand Market Forecast Report, market indicators continue to predict a rise in LED usage across applications, with lighting leading the way in LED applications with a predicted increase of 20% over 2010. The total package revenue for backlight and lighting applications was $7.2 billion in 2010 and is forecast to reach $12.7 billion in 2014. A heightened demand for LED lighting applications is the main driver of this dramatic increase.

Fortunately, suppliers have taken note of these trends and have planned for increased capacity in the future. In 2011, DisplaySearch predicts global LED capacity will reach 180 billion units, and by 2013 will reach 227 billion.

While overall LED demand continues to rise, we are seeing demand taper off in LED backlights and begin to trend more in the direction of LED lighting, said Leo Liu, Senior Analyst at DisplaySearch. Due to high inventories and low sales for LED-backlit LCD TVs in Q410, Q111and early Q211, LED backlight demand dropped slightly; we expect it to pick up again and reach a maximum level in Q311 due to seasonal demand.

Currently, LED backlights are used in all small/medium LCDs, and LED backlight penetration in mobile PCs is nearly 100%. Penetration of LED backlights in LCD monitors and LCD TVs continues to grow, while the number of LED packages per set is decreasing. Total LED backlight demand will be 45.9 billion in 2011. Demand for LED-backlit LCD TVs has dominated the backlight supply since 2010, accounting for nearly 50% of the total backlight demand. LED demand from TVs will reach its maximum level in 2012, but then slightly drop after 2013 due to a decrease in LEDs per unit.

Figure 1: Changes in LED Applications Over Time

Source: DisplaySearch Quarterly LED Supply/Demand Market Forecast Report

Increasing Usage of LED Lighting

In terms of LED penetration in lighting applications, DisplaySearch found the total average LED penetration in lighting was 1.4% in 2010 and is forecast to reach 9.3% in 2014. There is high penetration in spot lights due to halogen replacements, and government policies are expected to accelerate LED penetration in street lights after 2011. Total LED lighting demand was 3.2 billion in Q211, and DisplaySearch predicts that demand will quickly increase to 3.4 billion in Q311.

Sales of LED street lights are increasing due to government support. China will be the biggest market for LED street lights in 2011 due to government policies. The countrys market share in 2011 is 55%, but will slightly decline to 50% in 2014. The share of LED street lights by area will not change very much from 2011 to 2014.

Figure 2: LED Lighting Penetration Forecast

 

Source: DisplaySearch Quarterly LED Supply/Demand Market Forecast Report

LED Lighting Forecast by Region

Japan is the biggest market for LED bulbs in 2011. The countrys market share is 63% in 2011, but is forecast to decline to 40% in 2014. Japan has high LED adoption in lighting due to electrical power limitations and energy-saving efforts. The country will remain the biggest lighting market until 2014. LED bulb growth in China, North America and Europe will be higher than other areas from 2011 to 2014. 

Taiwan to Lead LED Supply After 2011

Korea was the top LED supply country in 2010. Taiwan will take over as the top LED supply country after 2011. The top three suppliers in Q2 11 based on 500x500 chip size were S-LED, LGIT, and Epistar.China is the wild card for LED supply, with a great deal of investment in LED production.

While market growth will be high over the next several years, LED suppliers without cost competitiveness and correct strategy will face big challenges. A surplus will intensify competition and lead to dramatic price drops in 2011, causing higher LED adoption rates in lighting.

The DisplaySearch Quarterly LED Supply/Demand Market Forecast Report  analyzes supply and demand on a quarterly basis for the entire LED industry. From chip prices to LED maker roadmaps, this report gives a clear outlook and reliable forecast of LED supply/demand, along with an analysis of the impacts on pricing. Forecasts in this report include detailed backlight and lighting supply/demand, pricing cost structure, prices and more. This report is delivered in PowerPoint and includes Excel based data and tables. For more information on this report, please contact Charles Camaroto at 1.888.436.7673 or 1.516.625.2452, or contact@displaysearch.com or contact your regional DisplaySearch office in China, Japan, Korea or Taiwan.

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