Lighting, Not LCD Backlights, Fueling Growth of LED Bulbs, Report Says

Global penetration for LED lighting applications is forecast to be 26 percent in 2016, up from 5 percent in 2012, DisplaySearch said. The highest growth will be in LED-based tubes that replace fluorescent tubes used in commercial applications, street lights, and luminaires whose innovative designs produce light across various shapes and sizes, DisplaySearch said.

Philips continues to push its status as a major force behind the transition to LED. The company announced last week researchers have developed a tube-lighting LED prototype that produces 200 lumens per watt of high-quality white light compared with 100 lumens per watt for fluorescent lighting and 15 lumens per watt for incandescent bulbs. The prototype tube LED lamp is twice as efficient as predecessor lamps, “basically halving the energy used,” Philips said. The tube lamp is expected to hit the market in 2015 for office and industry applications and then move into the home market, Philips said.

While the market opportunity for LED lighting is broadening, the market for LEDs in LCD backlighting is “stagnant,” DisplaySearch said. In 2014, general illumination will pass display backlighting as the largest application for LEDs, it said. In addition, the market for LED chips has been in oversupply as LED makers have invested heavily in metal organic chemical vapor deposition equipment, particularly in China, DisplaySearch said. The surplus has stirred up competition and led to falling prices, which has translated to higher LED penetration in lighting but lower profits for LED makers, it said. As a result, many LED makers are pursuing vertical integration, where LED chip makers integrate the chip, phosphor and control circuits to make lighting engines, and where LED package makers integrate the lamp assembly. Success in the lighting market requires technical integration, optical design “and the development of brand and channel strategies,” DisplaySearch said.

"LEDs are playing a leading role in the lighting industry, driven primarily by government incentive policies and consumer demand for more efficient light sources with advanced technologies such as wireless and color control,” said Steven Sher, analyst, NPD DisplaySearch. The demand will jump over the next three years as consumers look to replace traditional light bulbs with more efficient LED options, he said.

Japan has been the largest market for LED lighting applications since 2011, and DisplaySearch predicts that will continue through 2016, driven by adoption of LED bulbs, spotlights, fluorescent tubes, and luminaires. LED lighting sales growth in China will outpace that in other regions from 2012 to 2016 due to government policies such as the 12th Five-Year Plan, which is already driving demand for LED street lights, it said. North America and Europe are also experiencing increased demand for LED lighting applications and will through 2016, particularly for LED fluorescent tubes, it said.