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A Market Brightspot: LED growth continues


LED lighting is seeing increases in demand and capacity additions thanks to penetration rates that continue to show strong, positive trending.  These positive trends are forecasted to see steady gains and price drops that will further push LED into numerous applications and increases in consumers' lighting preference.  According to this recent market forecast by DisplaySearch and summarized here, demand for LED backlighting for LCD TVs is waning, but LED lighting and AMOLED displays are growing with new capacity already in the works.

Recent DisplaySearch research points to 2011's year-over-year CAGR for LED lighting to reach 20%, "[T]he total package revenue for backlight and lighting applications was [US] $7.2 billion in 2010 and is forecast to reach [US] $12.7 billion in 2014.  A heightened demand for LED lighting applications is the main driver of this dramatic increase."  Among the main drivers for this significant growth are global demand for LED street lighting, as well as other types of commercial and residential lighting.

With global trends strongly supporting the move to LED lighting across multiple sectors and for a variety of other applications, existing manufacturers are increasing capacity in anticipation of the forecasted demand.  The reason behind the demand spike is the combined gains of LED use as an energy efficient light source, reduced heat emissions in devices, and low power consumption with longer lifespans.  China, in particular, is investing heavily in the LED market which is forecasted to "jump to [US] $5.8 billion in 2011, up a robust 23 percent from [US] $4.7 billion last year," according to this recent report from IHS iSuppliiSuppli further projects that, "[T]he LED market in the world's most populous country is forecast to reach [US] $6.9 billion next year on its way to [US] $11.1 billion by 2015, equivalent to a five-year compound annual growth rate of 17.7 percent."

S. Korea is also seeing ramp-ups for AMOLED display manufacturing by Samsung, as discussed in this recent report from DisplaySearch.  Furthermore, according to "Charles Annis, DisplaySearch Vice President of Manufacturing Research, "AUO, LG Display, Chimei Innolux and IRICO are also forecast to build either pilot or mass production AMOLED lines in the next two years, while other companies are currently considering entering the market.""  However, Taiwan is forecasted by DisplaySearch to lead in LED manufacturing after this year.  In short, the competition among the three countries is something to watch because there are many variables that will impact success in the wider-LED manufacturing arena.

One important variable is related to LCD TVs with LED backlighting.  This display device sector has waned and is expected to reach a final peak in 2012, according to this DisplaySearch report.  The hope is that with new AMOLED displays, the advantages of LED-based devices will provide a needed boost and second wave to the TV display sector.  Meanwhile, the LED lighting sector looks to be the most reliable device application globally, providing an important buffer in the face of present global uncertainties in the mature economies.

Watch for our in depth discussion of the LED and SSL sector as part of Smith's MarketWatch Quarterly special series on Green Technology, available in mid-September with a free subscription here.

Lisa Ann Cairns, Ph.D.
Written on Thursday, 25 August 2011 10:07 by Lisa Ann Cairns, Ph.D.

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