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14 November 2007


LED market returns to double-digit growth in 2007

The total LED market should grow by about 13.7% in 2007, and at a compound annual growth rate (CAGR) of about 14.6% between 2006 and 2012 to more than $12.3bn, according to the report ‘Solid State Lighting: LEDs Poised to Drive a New Lighting Revolution’ from market research firm iSuppli Corp. The return to double-digit growth rates in 2007 follows two years of moderate single-digit growth, by only 2.1% in 2005 and by 8.7% in 2006.

These figures encompass all surface-mount device (SMD) and through-hole packaged LED lamps and alpha-numeric display LEDs, including standard brightness, high-brightness (HB) and ultra-high-brightness (UHB) LEDs. A significant portion of the growth will be driven by UHB and HB LEDs, says iSuppli. In 2012, UHB LEDs will account for about 31% of total LED revenue, up from 4% in 2005.

“The new phase of LED growth will be driven by the continued strong demand for solid-state lighting for the backlighting of keypads and displays in mobile devices,” says Dr Jagdish Rebello, iSuppli director and principal analyst. “It also will be propelled by new emerging markets for LEDs in the interior lighting of automobiles and in the backlighting of large-screen LCDs for televisions and notebook computers. Furthermore, continuous advances in solid-state lighting technology will allow LEDs to target new applications in the decorative-illumination and architectural-lighting markets.”

For the immediate future, the backlighting of small-screen LCD displays and of keypads in mobile devices remains the single largest application market for LEDs, reckons iSuppli. In 2007, this application will account for more than 25% of total LED market revenue.

But, beginning in 2007, backlighting of larger screen LCDs for notebooks and for direct-view LCD-TVs is emerging as the next big application for LCDs. LCD back-light units (BLUs) are still significantly more expensive than conventional cold cathode fluorescent lamps (CCFLs) BLUs, but the cost differential is narrowing quickly. Also, the performance advantages offered by LED BLUs in terms of higher contrast ratios, faster turn-on times, wider color gamuts and the absence of mercury are driving their adoption in LCDs.

Several LED suppliers, BLU manufacturers, LCD panel makers and TV/monitor OEMs are now starting to use LEDs for backlighting large-screen LCDs. Commercial shipments of large-screen LCDs with LED BLUs are now also commencing.

Also, the development of high-flux LEDs with luminous efficacies exceeding 100 lumens/Watt and the advent of innovative designs that allow LEDs to run on alternating current without the need for an inverter are pushing LEDs closer to adoption in the mainstream general illumination market. LEDs already are being used in different indoor and outdoor decorative illumination applications, and are just starting to target niche general-illumination applications such as flashlights, garden lighting and street lighting. These uses are opening the market for LED illumination in the home and in enterprise illumination applications.

Furthermore, legislation around the world is increasingly seeking to ban the use of incandescent bulbs in favor of more energy-efficient light sources. In the near term, compact fluorescent lamps (CFLs) will benefit from the legislative efforts to ban incandescent lighting. However, in the longer term, the advantages of solid-state lighting will outweigh the cost differential between LEDs and CFLs, believes iSuppli. Also, as progress continues to be made in LED performance, the cost differential will narrow. iSuppli projects that LED light bulbs will begin to address the residential and enterprise general illumination market in 2010.

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Analysts forecast seven-year wait before LEDs penetrate home lighting market

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