Three Major Data Analyses of LED Lighting Industry Development Prospects

“寒冬论”、LED产业“未老先衰”等负面言论为行业发展笼罩着一层不明朗的阴云，整个2015年LED产业被唱衰。更有甚者传言“2016年LED产业将有不低于4000家企业倒闭”。LED产业真的如此吗？近期，相继有研究机构公布其研究数据，透过其研究数据，笔者看到了LED产业美好的发展势态。

1. Global Lighting Increased by 2.5% in 2015 Compared to 2012

According to the data, the global high-brightness LED output value in 2015 was US$12.4 billion, down 2.7% from 2014, among which LED components for lighting accounted for as high as 49.3%, with a sharp drop in ASP. However, looking at the domestic market—the largest production and export region for lighting end products—the annual growth rate of lighting export value in 2015 was 15.1%, of which more than 40% came from LED lighting, indicating that the demand in the end lighting market was relatively strong.

In 2015, a wave of large-scale mergers and acquisitions and bankruptcies swept across the entire LED industry, with 4,000 LED companies closing their doors amid fierce market competition. For a time, "cold winter" rhetoric shrouded the entire LED sector. Many LED companies began cross-industry transformations — for example, Qinshang Optoelectronics acquired Guangzhou Longwen Education to enter the education industry; Ledman Optoelectronic sponsored the Portuguese Primeira Liga, venturing into football, among others. However, the 2015 financial reports of LED companies showed substantial growth in both revenue and profit for many firms. At the same time, data from DIGITIMES Research indicates that the "cold winter" of 2015 was not actually that "cold."

With the rising global enthusiasm for energy conservation and environmental protection, green lighting has also been pushed to the forefront. At the 2015 Paris Climate Conference, green lighting became a global theme, and a worldwide plan for 10 billion LED light bulbs was placed on the agenda, drawing enthusiastic responses from countries around the world. Last year, the Indian government rolled out a series of LED lamp replacement programs, making the Indian LED market a hot target for LED companies. In addition, this year China will ban the production and sale of incandescent lamps above 15W, and "incandescent bans" are being successively formulated and implemented in countries around the world. The penetration rate of LEDs is expected to show a significant upward trend. The LED lighting market has unlimited potential, and the prospects for the LED industry's development are highly anticipated.

Further comparing the proportion of domestic lighting export value in the global lighting market size, it stood at 18.2% in 2012 and grew to 32.5% by 2015 — an increase of 14.3 percentage points over four years. It is not hard to see that the domestic lighting manufacturing industry is gradually assuming a pivotal position in the world.

The 2015 work report of China's Minister of Science and Technology, Wan Gang, pointed out that China has become the world's largest country in the semiconductor lighting industry. First, 80% of the world's LED packaging comes from China, and international giants such as Philips and GE Lighting have all established factories in China; in addition, China's domestic LED companies are increasingly rising, and the trend of overseas M&A is intensifying.

According to incomplete statistics, since 2015, Chinese capital has acquired LED companies in four cases:

1. Toshiba Lighting Technology will sell its Chinese subsidiary to Konka;

2. Dongshan Precision plans to acquire the US-listed company MFLX for 4 billion;

3. Kaifa Jing jointly acquires 100% equity of US-based Bridgelux for US$130 million;

4. Feile Audio acquires 80% equity of Sylvania.

If we also count in two potential overseas acquisitions: Elec-Tech, Foshan Lighting, Feile Audio, Tongfang Co., and Mulinsen competing on the same stage to acquire Osram's lighting business, and the Chinese capital group GSR Capital seeking to bid for another lighting division of Philips. Chinese capital's acquisition of overseas LED companies will exceed US$10 billion. As mergers and acquisitions take place, the corresponding technical patents will also be transferred, which will provide convenience for Chinese enterprises to enter overseas markets; at the same time, combined with relatively cheap domestic manufacturing costs, the accelerated expansion of Chinese LED enterprises in overseas channels will gradually reveal their overseas advantages.

Therefore, based on the analysis of development trends, the global position of the domestic lighting manufacturing industry will be further enhanced.

II. The global automotive LED lamp market will reach USD 7 billion by 2020

It is predicted that the global automotive LED lamp market will reach USD 7 billion by 2020, with a compound annual growth rate (CAGR) exceeding 18%. Lamp manufacturers are committed to producing efficient, reliable, and affordably priced automotive LED lamps.

Observations indicate that the global automotive LED lamp market has three major development trends:

1. Continuous development of innovative technologies. At present, xenon headlights, LED headlights, and laser headlights are the three mainstream products in the automotive lighting market. Technological innovation has promoted the development of organic LED lamps, enabling LED headlights to provide superior lighting conditions.

2. In-car ambient lighting is becoming increasingly popular. In-car ambient lighting was once limited to high-end automotive products, but with the cost of LED lights decreasing year by year, it is now being adopted by an increasing number of low-end vehicles.

3. Laser and organic LED lights have great development potential. Laser and organic LED lights are advanced technologies in automotive lighting. However, due to cost reasons, they are generally only used in luxury cars. But as costs decrease, the application of laser and organic LED lights will become more widespread.

In 2015, with intensifying competition and widespread price wars, the LED lighting market had become a 'red ocean'. With the continuous growth of the automotive LED market size and current average gross margins generally above 20%, LED manufacturers are actively investing in the automotive LED lighting field. The monopoly held by Osram and Philips on the automotive lighting market will be broken.

At the same time, with high-end automotive brands such as Mercedes-Benz, Audi, BMW, and Land Rover all adopting LED lights as the lighting equipment for their new car models, LED lights are gradually becoming the new favorite of the automotive lighting market. Many lesser-known automotive brands, such as Opel and SEAT, are following suit. It can be predicted that in the near future, LED car headlights will become the common lighting equipment in the automotive lighting market.

According to a global white LED market research report published by Japan's Fuji Chimera Research Institute, the automotive LED market, centered on interior lights and similar applications, accounts for a small proportion of the entire white LED market, but is expected to achieve significant growth in the future; it is anticipated that headlight restrictions will be relaxed, and combined with improvements in white LED luminance, the future use of white LEDs in automobiles will see significant growth in both quantity and performance.

III. Global LED Industrial Lighting Market Reached USD 2.932 Billion in 2016

According to the latest "2016 Engineering Lighting & Explosion-Proof Lamp Market" research report, the global LED industrial lighting market reached USD 2.932 billion in 2016 and is growing at an annual growth rate of over 15%, with the market size projected to reach USD 5.204 billion by 2020. #p#分页标题#e#

The industrial lighting sector is generally considered to be the last lighting application field to be penetrated by LED on a large scale, which is largely related to the lighting products currently in use. Currently, the products used in industrial lighting applications (such as metal halide lamps, fluorescent lamps, etc.) have a relatively high cost-performance ratio, and LED lighting products are temporarily unable to replace them with overwhelming advantages.

As LED lighting continues to strengthen its mainstream position in the global lighting market, the market share of LED lighting will rise significantly, and LED will fully enter the industrial lighting sector. Why? Because the energy-saving effect of LED makes industrial lighting more competitive in terms of cost recovery than residential lighting under long-term use, providing sufficient incentive for operators to switch to LED products. In addition, with the improvement in LED lighting product performance and further price reductions, combined with the relatively advantageous profit margins of industrial lighting products, the industrial lighting market will become a key battleground for LED packaging and lighting manufacturers.

In addition, the LED civil lighting sector is currently a red ocean, while industrial lighting mostly goes through hidden project channels, which can avoid the fierce battles of price wars and scale wars and obtain stable profits. At the same time, the number of LED manufacturers in the industrial lighting sector is relatively small, the market is relatively fragmented, competition intensity is also lower, and the market has certain development prospects.

Summary: Looking at the global scope, green lighting is ultimately the prevailing trend. As an outstanding representative of green lighting, LED lighting will see increasingly widespread applications. Currently, the penetration rate of LED is relatively low, and the untapped market potential of LED lighting remains considerable. At the same time, due to intense market competition, the LED industry will further develop towards centralization and specialization.