18 May 2021
LED market to grow 8.1% to $16.53bn in 2021
Due to the impact of the COVID-19 pandemic in 2020, not only did LED revenue experience a downward trajectory but this decline also reached a magnitude rarely seen in recent years, according to market research firm TrendForce. However, as vaccinations begin taking place in first-half 2021, the LED market’s long-stifled demand is expected to rebound from rock bottom. Hence, global LED market revenue (i.e. revenue from packaged LEDs, plus revenue from mini/micro-LED chips directly used in backlighting and other self-emitting products) will likely undergo a corresponding recovery this year as well, growing by 8.1% to a forecasted $16.53bn in 2021. Most of this increase can be attributed to four major categories, including automotive LEDs, mini/micro-LEDs, video wall LEDs, and ultraviolet/infrared (UV/IR) LEDs.
TrendForce expects the soaring growth of NEV (new energy vehicle) sales and the accelerated adoption of LED lighting solutions in new models of conventional fossil-fuel vehicles this year to result in a persistent rise in the penetration rate of automotive LED solutions from 2020. Automotive LED revenue will likely grow by 13.7% to $2.93bn in 2021, making it the fastest-growing sector among all LED applications.
Demand for emerging mini/micro-LED technologies in display applications, on the other hand, has been skyrocketing this year. In particular, the latest 12.9-inch iPad Pro and Samsung TVs both feature mini-LED backlighting technology, and these products will propel mini/micro-LED revenue up by 265% to $380m in 2021, in turn giving the mini/micro-LED sector the second-largest growth among the four categories.
Third largest is the video-wall market. Emerging solutions, such as all-in-one LED displays for meetings and conferences, 5G 8K ultra-high-resolution video walls, home theaters and virtual production, have placed the video-wall market in the spotlight in recent years. Video-wall LED revenue is expected to grow at 12% to $1.78bn in 2021, making it the third-largest growing sector in the LED industry.
Among all segments of the UV/IR LED market, the UV-C LED segment has garnered significant attention due to the onset of the pandemic. Not only have various brands been gaining major awareness of the importance of disinfection and sterilization but UV-C LED products have also been improving in terms of radiant power (optical power). Notably, home-appliance brand manufacturers from China, Europe, Korea and Japan are all planning to integrate UV-C LED technologies into their products, and over 35 manufacturers are introducing or planning to introduce UV-C LED in their products. All in all, various applications are expected to drive UV/IR LED revenue up by 27% to $830m in 2021.
On the whole, the gradual recovery and rebound of demand for traditional LED applications, as well as the upcoming ramp-up of niche LED technologies, will be the main drivers of LED market revenue. At the same time, both demand and revenue in the LED industry are expected to enter an upward trajectory accordingly due to two factors. First, the improvement in supply and demand in the LED industry has allowed prices of most LED products to stabilize, with some products even seeing a price hike. Second, emerging LED applications command higher average selling prices (ASPs) and gross margins. TrendForce thus believes that LED makers will no longer have to reduce price by increasing order quantity. Companies in the LED industry are therefore expected to post improved earnings as a result.