Bringing Down the Cost of LED Lighting

In LEDs Magazine, Financial analyst Jed Dorsheimer of Canaccord Genuity estimates the LED portion of the Bill of Materials (BOM) at $25. Jed argues that number needs to drop to $4 to enable a $10 retail price for a 1000 lm bulb. He says the cost is critical because he estimates the current payback time for an LED bulb to be 11 years in residential applications. Estimates on the industry are that LED light bulbs will last about 50,000 hours (more than 2000 days if lit 24 hours a day) versus 1,000 hours for the typical incandescent bulb.

Dorsheimer sees a move to larger diameter sapphire wafers necessary to the success of LED lighting. He says migrating from 2-inch wafer to 4- or 6-inch diameter wafers offer better thermal stability and ultimately better yield. Dorsheimer stated, “Yield trumps all in this industry.” He said that lighting could consume more than 100 billion additional LEDs by 2020.

LED light bulb

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