General Lighting Brightens Up with LEDs

Clearlysapphire.com continues to follow the growth of LED lighting as well as sapphire and alternative substrates. This week, we’ll focus on a new report from Yole Developpement, a research firm that covers LEDs and the semiconductor industry.  Yole recently reported that the packaged LED market will grow from $13.9 billion in 2013 to $16 billion by 2018, driven mainly by general lighting and completed by display applications.  The report, Status of the LED Industry, details how LED-based general lighting has surpassed all other applications, representing nearly 39 percent of total revenue of packaged LEDs In 2012.

2013 packaged LED revenue by application.  The total market size is nearly $13B. (Source: Status of the LED Industry report, Yole Developpement, September 2013)

2013 packaged LED revenue by application. The total market size is nearly $13B. (Source: Status of the LED Industry report, Yole Developpement, September 2013)

Costs need to continue to drop to keep LED-based lighting’s momentum in the general lighting market according to the report’s author, Pars Mukish, market and technology analyst, LED for Yole Developpement.  He commented, “Cost represents the main barrier LEDs must overcome to fully compete with incumbent technologies.  Since 2010, the price of packaged LEDs have sharply decreased, which has had the consequence of decreasing the price of LED-based lighting products.”

Mukish notes that in order to maintain growth, the industry needs to continue reducing pricing.  He pointed out that while LED still has some potential for cost reduction, widespread adoption will require manufacturers to reduce costs on all components of the system such as drivers, heat sink, and PCB.

Yole also updates their reporting on the use of alternative substrates in the LED market.  This situation hasn’t changed since we last covered alternatives in these posts:  Clearlysapphire.com, Alternative Substrates – Dimming the Hype, http://blog.clearlysapphire.com/?p=496 and Clearlysapphire.com, Alternative Substrates for LEDs, http://blog.clearlysapphire.com/?p=293.

According to Yole, companies working on alternatives such as silicon and GaN still face major obstacles.  Mukish says the benefit of GaN-on-silicon LEDs depends on decreasing manufacturing cost by using cheaper 8 inch silicon substrates that can leverage fully depreciated and highly automated CMOS fabs. However, he maintains that GaN-on-silicon LEDs still suffer from low manufacturing yields and full compatibility with CMOS fab still needs to be achieved.  He added that GaN-on-GaN LEDs benefit from a lower defect density in the epitaxial layers, allowing the device to be driven at higher current levels and to use a lower number of LED devices per system.   However, he said that GaN-on-GaN LEDs suffer from low GaN substrate availability and high costs.

For Further Reading

iMicronews, Sample, State of LED Industry, SLI report,  http://www.i-micronews.com/upload/Rapports/SLI%20Sample.pdf

Compound Semiconductor, Yole: Inexpensive LED Solutions Pushing Adoption In General Lighting, http://www.compoundsemiconductor.net/csc/detail-news/id/19736834/name/Yole:-Inexpensive-LED-solutions-pushing-adoption-in-general-lighting.html

Novus Light Today, Yole Releases Status of LED Industry Report, http://www.novuslight.com/yole-releases-status-of-led-industry-report_N1675.html

 

LED Light Bulbs Grow in Popularity

Philips 12.5W LED A19 bulb on sale on Homedepot.com for $22.97 US.

A big part of the market opportunity for sapphire is LED lighting.  When the LED lighting market grows, the demand for sapphire, one of the main building blocks for LED chips will increase too.  We’ve been tracking the LED lighting market and take a look at a recent report by Diane Cardwell in The New York Times, LEDs Emerge as a Popular ‘Green’ Lighting.

Cardwell examined the growth in popularity of LED lighting in the piece.  Cardwell notes that the energy-efficient replacement LED bulbs are popular with consumers despite being more expensive than traditional incandescent bulbs.  She also looked at the marketing success of LED lighting at retailers like Home Depot and technological improvements by manufacturers like Philips.

Cardwell reported that the growth of LED sales outpaced other lighting technologies in the residential market even though the market share still is small at 3 percent.  She attributes the growth to price decreases and the appeal of saving money on energy to consumers.

Brad Paulsen, from mega home retailer Home Depot, told Cardwell that he anticipates that LED technology will become the most popular lighting technology that is out there.  Home Depot has been selling LED light bulbs since 2009 according to information Bill Hamilton from Home Depot shared at a Department of Energy, 2012 Solid-State Lighting Market Introduction Workshop.  The retailer now sells 104 options online and in-store.  Consumers are seeing healthy price decreases.  For example, a Philips 12.5W LED A19 bulb (a 60W equivalent) decreased in price 37% to $24.97 between 2011 and 2012 at Home Depot and now sells on the Home Depot website for $22.97.

The Times article highlighted some interesting market statistics about LED lighting.  A-type LEDs, the most common bulb size that fits in home light sockets, will outsell incandescent bulbs in North America in 2014, according to market research firm IMS Research.  The firm also maintains that LEDs will become the most popular A-type technology by 2016 with North American shipments reaching almost 370 million, more than 10 times the roughly 33 million shipped last year.

Light bulb manufacturers are seeing LED lighting growth as well.  Cardwell noted that Philips, a major manufacturer of light bulbs in the US, saw LED light bulbs contribute to 24 percent of lighting sales in 2012. Overall LED-based sales grew by 51%, and now account for 24% of total lighting sales for Philips in Q3 2012. Philips took in over EUR 500 million, that’s around $650 million in US dollars, in LED-based sales for the third quarter.  That’s a lot of LEDs.

For Further Reading

Bill Hamilton, Home Depot presentation, Department of Energy, 2012 Solid-State Lighting Market Introduction Workshop, http://apps1.eere.energy.gov/buildings/publications/pdfs/ssl/hamilton_trends_pittsburgh2012.pdf

New York Times, LEDs Emerge as a Popular ‘Green’ Lighting, http://www.nytimes.com/2013/01/22/business/leds-emerge-as-a-popular-green-lighting.html?_r=0