3. LED ighting application growth might slow down
In recent years, lighting applications has emerged as a popular choice among LED manufacturers, due to its market growth potential. It is forecasted the global LED lighting industry will increase at a CAGR of 3% per year, due to price erosion from 2015 onwards. Lighting would eventually replace backlight to be the industry’s main growth driver in the next 5 years.
It is forecasted that LED replacement lights would deliver good performance in the next 5 years, but revenue is expected to come down. LEDs long lifetimes of 20 years or more would reduce the annual global LED retrofit market annual demands from about 12 billion bulbs to an estimated 8 billion bulbs by 2019, indicating the total LED retrofit volume would drop.
Moreover, it is more and more difficult for LED chip manufacturers to profit from LED light bulbs as backlighting LED technologies are adopted in LED fixtures. It is possible to buy a LED bulb for less than US$10 in the retail market, and export is less than US$3. The low costs are made possible from mass production technology found in LED backlight sector, which leads to very low cost package, LED bulbs have come down from US$30~US$50, to now US$ 10~US$15.
All in all, LED lighting suppliers need to find alternative application markets as backlight market saturates, and cutthroat price wars rage on in the bulb market. Smart lighting might emerge as a blue market for manufacturers.