The massive LED lighting market is now ready to be activated
The economy of LED is mainly reflected in its better power-saving effects and the advantages of illumination efficiency. In addition, since LEDs have an ultra-long lifespan, their replacement cost is significantly better than other light sources.
The global bulb market volume is estimated at 20 billion units. After incandescent lamps were banned from production and sale in 2012, although energy-saving fluorescent lamps (CFL) still dominate in terms of penetration rate, with rising global environmental awareness, light-emitting diodes (LED) have become a policy actively promoted by various countries, among which LED bulbs will be one of the products prioritized for introduction in lighting programs promoted by many countries. Market research agencies estimate that the LED bulb penetration rate in 2011 will be 3%, with shipments reaching 600 million units and an output value of USD 8 billion. By 2013, with the replacement wave of traditional 40W and 60W bulbs, the overall market size will surge to 2.5 billion units.
Countries such as Japan, Korea, and North America have implemented subsidy policies for green products such as LED lighting. Currently, places including shopping malls, stores, and factories also have a high willingness to switch to LED lighting. The global LED lighting penetration rate is expected to exceed 10% in 2011, attracting major manufacturers such as Nichia, Philips, Osram, and Cree to compete for business opportunities. As more and more countries begin to allocate budgets to replace LED streetlights, coupled with an annual price drop of LED lighting by more than 30%, the penetration rate is expected to rise to nearly 20% by 2013, and the market outlook is promising. (Data source: New Electronics Technology Magazine)
LED Lighting Development Plans of Various Governments
Japan—21st Century Lighting Plan
USA—Next Generation Lighting Plan / Taiwan—White Light Source Plan
Korea—GaN Semiconductor Development Plan
Europe—Rainbow Plan
China—National Semiconductor Lighting Project
Due to the light source characteristics of LED, special product design, and high-efficiency driving circuits, and in terms of optical design, LED is a unidirectional point light source that allows for excellent optical design, helping direct light to designated areas while reducing reflection. These all improve lighting effects, so illumination cost should be the key indicator for evaluating the takeoff of LED applications.
Looking at the availability of LED production capacity technology, the Chinese government promotes self-sufficiency in LED within mainland China through the Metal Organic Chemical Vapor Deposition incentive program. The program is expected to spend USD 1.6 billion on MOCVD equipment between 2010 and 2012, while providing subsidies of up to USD 1.8 million per piece of equipment. Local governments have also offered preferential measures such as tax reductions, accelerated equipment replacement, and free land use. Therefore, this plan is equivalent to encouraging existing Chinese LED manufacturers to expand production capacity, and has also led to the emergence of many new entrants, while manufacturers from Taiwan and Korea have entered China through joint ventures. They all become factors driving the increase in China's production capacity.
For this reason, we believe that the massive LED lighting market is now ready to be activated
The first lighting market to be activated is outdoor large-angle illumination, such as streetlights, billboard lights, etc. The first indoor lighting to be activated will be long-life lighting applications, including tunnels, cold storage, garages, supermarkets, factories, shopping malls (cool white), and office buildings. By around the end of 2011, most commercial lighting is expected to be activated, while home lighting will mainly target high-end customers.
However, the LED lighting market also faces many challenges. Besides price, key issues include improving luminous efficiency, reducing glare, and enhancing light configuration and uniformity, especially in the field of replacing fluorescent lamps.
High-efficiency LEDs have the disadvantage of high color temperature that tends toward cool colors. Due to differences in usage habits, some application environments (such as clothing stores) or some countries (such as most Asian countries) require warm white light with lower color temperature, which loses up to about 30% of the light source efficiency. For this reason, the activation threshold for warm white light is higher than that for cool white light. We estimate that when LED costs can drop by about 40%, warm white light will have the current economics of cool white light, expected around the end of 2011.
The lifespan of LED lamps has been controversial. Although LED chips may have a lifespan of more than 100,000 hours, packaging and driving components may cause the overall lamp lifespan to decrease. Currently issued LED streetlight standards require a lifespan of 30,000 hours, while indoor lighting standards mostly require 20,000 hours, which is also the general level in the industry.
Most current LED lifespans are calculated using data models after testing for a certain period. Due to the long lifespan of LEDs, customers find it difficult to judge the lifespan of LED lamps through usage experience, and previous non-standardized LED products have affected public expectations of LED lifespan.