Pars MUKISH holds a master degree in Materials Science & Polymers (ITECH – France) and a master degree in Innovation & Technology Management (EM Lyon – France). He works at Yole Développement as Senior Market and Technology Analyst in the fields of LED, OLED, Lighting Technologies and Compound Semiconductors to carry out technical, economic and marketing analysis. Since 2015, Pars MUKISH has also taken on responsibility for developing Sapphire, Display and Lighting activities as Business Unit Manager at Yole Développement. Previously, he has worked as Marketing Analyst and Techno-Economic Analyst for several years at the CEA (French Research Center).
2017 LED Industry Update: Highlights and Future Trends
Growth of the LED industry initially came from small display applications and was driven forward by larger LCDs. Since 2012, most companies have been participating in the ultimate application for the LED business, general lighting. Now, for Solid State Lighting (SSL) to continue growing in this market, the lighting industry expects further price decrease and performance increase of LED devices.
However the LED industry is still suffering from overcapacity, high level of fragmentation and strong price pressure. Indeed, and industry consolidation was expected to decrease competition and stabilize price erosion. This eventually happened in China during 2014/2015, but with unforeseen effects on the overall industry. Indeed, several smaller players went bankrupt and many midsize players have since been acquired, leading to a situation where dozens of companies are having “going-out-of business” sales. This has triggered strong price decline and, naturally, other LED players had no choice but to match the price trend initiated by the Chinese industry. ASP for low and mid power LEDs declined 30% – 40% in the second half of 2015, and ASP for high power LEDs, though less affected, still declined 20% – 30%. Globally, 2015 was a rough year for the LED industry, with packaged LED revenue declining for the first time ever: from $15.1B in 2014 to $15B in 2015. This decrease was emphasized by lower-than-anticipated demand in the LED backlight and LED lighting markets. Moreover, strong evolution in currency exchange rates (due to the US dollar’s rise) contributed to many players’ declining revenue.
2016 has seen the industry begin recovering, and packaged LED ASPs have mostly stabilized for highly-commoditized stock keeping units (SKUs) like the low-power 2835 and mid-power 5630. Higher power grades for lighting applications are seeing increasing demand, but also stiffer competition, which likely will lead to a significant ASP drop as competition intensifies. Thus we expect the packaged LED market to show moderate growth in the coming years, reaching $18.5B in 2021 (CAGR 2016 – 2021: +3.4%).
In this context, making “standard” LED device for “standard” bulbs and / or luminaires is no more lucrative for the overall industry. As a consequence, many LED device manufacturers have decided to open their strategy beyond mainstream applications and devices (e.g.: automotive lighting, µLED…), and even beyond visible LED (e.g.: IR LED, UV LED…) to increase their margins (and survive). Some of them are even getting vertically integrated (up to the lighting module / system) to capture more value within the supply chain.
In a global way, the LED industry need to reshape itself and undergo some major transformations to make the LED business sustainable at middle / long term.
In this presentation, we will present an overview of the LED market and industry, and highlight strategy of LED manufacturers toward new opportunities such as: automotive lighting, agricultural lighting, µLED, UV LED, IR LED, LED module (…).