LED lighting output value penetration rate will reach 10% this year

　　Against the backdrop of falling upstream chip prices and improving luminous efficiency, the development of LED in the lighting field has attracted the attention of many investors. Industry insiders point out that although LED lighting output value accounted for about 3.2% of the overall lighting market output value in 2010, the penetration rate is expected to reach 10% in 2011, and by 2013 the global LED lighting output value penetration rate will further increase to nearly 20%.

　　Production Capacity Expansion Accelerates Chip Price Decline

　　In 2010, the large-scale entry into chip production was a major highlight for our country in the LED industry. Industry research organization LEDinside stated that the number of MOCVD units planned to be added in China for LED equipment in the next few years exceeds 1,200 units, of which the number of MOCVD units planned to be added in 2010 exceeds 300 units.

However, while LED output value is expected to keep expanding, the market is also concerned about possible oversupply resulting from the rapid increase in LED chip production capacity. LEDinside pointed out that LED chip prices had already begun to fall significantly in Q3 2010. Among them, the price decline for LEDs used in large-size panel applications was approximately 11%-16%, while high power LEDs used in lighting applications fell by more than 17%, with mainstream specifications of 100-120lm dropping by as much as 20%; LED chip prices are expected to fall by another approximately 10% in Q4. It is understood that Taiwan, as one of the world's major LED chip production bases, saw overall upstream chip manufacturers' revenue in November decline by 2.8% compared with October.

In addition, technological progress is also one of the reasons driving LED chip prices down. According to reports, based on the targets set by the U.S. Department of Energy, the goal for 2010 was 140lm/W, and by 2020 the luminous efficiency of LEDs will reach 243lm/W.

LED Lighting Accelerates Penetration

Since Q3 2010, LED chip quotations have fallen sharply, bringing development opportunities to downstream packaging and application companies. Lighting is expected to become a new important application area for the LED industry, following TV backlights.

Professional research institute DIGITIMES Research pointed out that although LED lighting still accounts for a relatively small share of the overall lighting market value, estimated at 3.2% in 2010, LED lighting has become one of the main development policies of many countries. Driven by national policies, the output value of LED lighting will rise rapidly.

"Incandescent bulbs will face a global ban on production and sales starting in 2012, and LED bulb shipments will grow significantly, with output value expected to reach approximately US$8 billion. In terms of output value, the penetration rate of the global LED lighting market will exceed 10% in 2011," DIGITIMES predicted. Global LED bulb sales are expected to reach 600 million units in 2011; by 2013, as 40W and 60W traditional bulbs enter the phase-out schedule, the LED bulb market size is estimated to reach 2.5 billion units.

In addition, following LED bulbs, many major industry players have also developed LED tubes. With LED tube prices expected to drop by more than 30% annually in the future, combined with significant improvements in LED luminous efficiency, DIGITIMES estimates that LED tube shipments will reach 260 million units in 2013. The institution also noted that after 2012, with LED manufacturers focusing on the general lighting market, many countries beginning to replace LED streetlights, and LED lighting prices declining by 30% annually, the penetration rate of global LED lighting output value will further increase to nearly 20% by 2013.

(Responsible editor: zl)