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14 December 2012

LED lighting revenue to peak at $5.8bn in 2015

According to market analyst firm IMS Research (part of IHS Inc), in its Packaged LED – World – 2012 Report, world packaged LED revenue will decline in the second half of the decade.

Lighting will be the main driver of growth this decade, says the firm. The 2012 market size is forecast to be about $10.9bn, with $2.9bn in lighting and $8.0bn in all other applications. By 2015 the market is forecast to reach $13.5bn, with $5.8bn in lighting (doubling in three years) and $7.7bn in other areas (slightly less than now).

However, IMS Research expects shipments of LED lamps to remain relatively flat from 2015 onwards. “This is mainly due to fewer replacements being required each year due to the longer-lifetime of CFL and LED lamps reducing the overall market,” explains IMS Research analyst Stewart Shinkwin.

With price erosion set to remain in double-digit figures, the LED lighting sector, as component packaged LED revenue, is forecast to contract towards the end of the decade, and with no other markets expected to grow significantly, the firm expects the total packaged LED market to fall towards the end of the decade (as revenue) once the general lighting market has peaked. This outlook could, however, change if adoption is slower than predicted over the next three or four years. In this alternative scenario, growth would be slower initially but could be maintained for a longer period throughout the decade.

The TV sector for packaged LEDs is the second largest market, and is forecast to grow from 2012 ($2.0bn) to 2016 ($2.4bn), as LED adoption rates increase throughout the time period just enough to overcome price erosion and the reduction of LEDs required for a given area. LCD panel shipments are also forecast to increase slightly, while there is also the trend towards larger screens, one which has been ongoing for a number of years. However the number of LEDs required for a given sized screen has also been decreasing faster than had been previously expected. In first-quarter 2012 the low-cost TVs that were introduced used half the number of LEDs for a given area, and although overall LED TV penetration increased as a result, average LEDs per LCD TV fell from 175 in fourth-quarter 2011 to 137 in first-quarter 2012. This trend cannot continue at the same rate forever and innovations may cause more LEDs to be used in some cases, but the overall trend is for a slow decline.

Tags: LEDs LED market


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