Quietly and steadily the lighting sector is being blanketed by the switch to LED lighting solutions, from consumers to business, signage, and automotive, to name some of the top growth sectors. The numbers are indisputable "spurring a 96 percent increase in packaged LED revenue in the market from 2013 through 2016," according to a recent study by IHS. As IHS continues, the revenue growth is equally significant: "Global revenue for packaged LEDs used in lighting applications is set to soar to $7.1 billion in 2016, up from $3.6 billion in 2013."
Growth: the socket or the bulb?
One initial question is why are we (finally) seeing this growth and is it sustainable? While LED lighting solutions have been available, it is really due to the more recent convergence of the restrictions and banning of incandescent bulbs in the European Union and the United States alongside of the improved performance and illumination. On the later topic, a recent article in LED Magazine, underscored that it was really not until 2011 when LED products began performing as promised for consumers. This increased customer satisfaction combined with reduction and eventual elimination of the incandescent bulb supply, set the stage for the recent market growth.
Further contributing to why the present forecast for LED lighting is not only strong but also sustainable, has to do with the present, now more cohesive alignment of the tech and lighting industry's relative cycles for research, development, and production. As cycles lighting and technology now are moving more in synchronicity and as consumers (residential, commercial, and industrial) are increasingly accepting the design differences inherent in LED lighting, there is significant innovation in both the LED driver technology and the LED bulb designs. One of the challenges that has confronted LED architecture has been in design because the LED light must fit into an incandescent socket, which was engineered for quite opposite device requirements (e.g., heat, high power draw). For any lighting change to be successful, particularly in the high volume, residential market, it has been imperative for LED lighting to adapt to the existing socket. This has been both an engineering and a design challenge, but as LED driver technology has improved and as consumers have begun to embrace alternative looks to light bulbs, the ability to design LED bulbs that can directly address heat dissipation, especially, as discussed in this recent IEEE article.
Important in the fitting of the LED bulb into an incandescent socket is the architecture around the LED driver, from material choices, circuit architecture, and importantly cooling solutions, a fundamental component is the driver and the bridge between the lighting and the semiconductor and electronics industry. As the IHS report notes, "Packaged LED revenue in the residential sector is forecast to grow to nearly $2.7 billion in 2016, up from an estimated $850 million in 2013. Manufacturers that carve out share early on in this market could garner significant returns as the market booms."
Commercial and residential LED lighting markets are on a steady growth trajectory due to a stabilizing technology and lighting industry alignment. Furthermore, ASP declines, due to increased competition and volume sales, bode well for residential lighting which is expected to support strong growth for the LED lighting and LED driver sector through 2016 and additional innovation opportunities to drive further growth through 2018. In the wake of the plateauing of the LED TV backlighting sector, the new lighting growth forecasts come at a critical point for the wider LED and LED driver sectors.