LED Lighting Industry Trends US

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Part
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LED Lighting Industry Trend US

Since the research instructions don't specifically focus on the 'top' trends, we focused on data regarding general trends currently present and potentially happening in the future in the US LED industry. Looking at industry reports on the subject led to a compilation of eight current industry trends and four potential industry trends. The current trends in the LED market involve growing mergers and acquisitions in the market, application of non visible LED lights, increasing awareness of energy saving, rising electricity prices in the US, development of lighting sales channels, external legislation and subsidy programs, further sales growth and introduction of light-emitting diodes. The potential industry trends are as follows: slowing LED market growth in the near future, shrinking profit margin, increasing replacement lighting market penetration and the increasing value of non-visible lighting applications.

OVERVIEW

LED technology has a unique sets of values that it can offer to consumers over traditional technologies. This involves the fact it offers "halogen, incandescent and compact fluorescent lamp (CFL) lighting". It also offers more versatility than other technologies and LED lights are "currently three to five times more energy efficient than traditional technologies and will become even more efficient" which is important to consider when thinking about the fact that "more than 50% of the total cost of lighting comes from the energy consumed". Additionally, LED lights are offered in a big range of colors, with the added advantage of LEDs coming in small sizes which offers different innovative applications. Another important advantage LEDs have is their longevity, as they can last ten times longer than incandescent lamps and 4 times longer than CFL lighting.

Since the research instructions don't specifically focus on the 'top' trends, we focused on data regarding general trends currently present and potentially happening in the future in the US LED industry. Looking at industry reports on the subject led to a compilation of eight current industry trends and four potential industry trends.

Current industry trends

1. GROWING MERGERS AND INTEGRATIONS IN THE MARKET
The bigger, more organized players in the market, especially in the US, have started to secure and maintain their position by merging with and acquiring the lesser players that have just entered the market.

2. APPLICATION OF NON VISIBLE LED LIGHTS
Non-visible LED spectrum includes ultraviolet (UV) and infrared (IR) LEDs.
A strong atmosphere of competition among manufacturers in the LED market led to a creation of "an environment where each vendor introduces new concepts to out-do the competition. This competitiveness has led manufacturers to focus on LED applications in the non-visible light spectrum such as the use of UVs or IR LEDs".

3. INCREASING AWARENESS OF ENERGY SAVING
The U.S. government, as well as the individual producers of LED lights, are putting a lot of effort into making "people know about the positive impacts of using these lights over traditional means".

4. RISING ELECTRICITY PRICES IN THE US
The rising prices of electricity are making people think about how to reduce costs and consume less energy, which leads them to switch from traditional sources to LED lights: "Smart lighting is expected to offer lucrative opportunities for application in commercial and industrial areas. It has the ability to adjust the amount of light required using control zones. Smart city schemes have become prevalent in the U.S. and Europe with rising focus on strategies to reduce peak power demand and the overall consumption of energy."

5.DEVELOPMENT OF LIGHTING SALES CHANNELS & OPPORTUNITIES
During the recent years, the amount of lighting agents and retailers increased in the US.
The ever growing need to interconnect smart devices and systems led to a new opportunity for LED manufacturers. Now, the manufacturers of smart phones and other IoT devices are starting to integrate LED systems into different devices.
The potential growth can also be seen in the large "penetration of smartphones and energy saving advantages associated with connected lighting systems" that are thought to be the new drivers of the market for LED lighting, particularly in countries where technology is adopted fast, e.g. United States.

6. EXTERNAL LEGISLATION AND SUBSIDY PROGRAMS
The U.S. government recently banned the sale of some forms of incandescent lighting, which leads to more consumers switching to LED lights as the more accepted alternative.

7. FURTHER SALES GROWTH
The benefits that LED lights offer over incandescent and fluorescent lamps is the reason why LED lighting market is seeing growth at the moment. LED lights offer efficiency, higher brightness and longevity.
More and more LED lighting is used for outdoor application, mainly roadways, traffic lights, tunnels, parking lots, and garages. This new lighting sales channel is expected to secure an additional growth of the market, but is so far categorized as an opportunity.
Additionally, the US market is expected to see growth when it comes to outdoor and residential application LED sales. On top of that, manufacturers such as Philips and General Electrics are constantly offering innovative solutions in order to attract customers on a global scale.
High production costs can have a big impact on the future of the LED market. However, the increasing use of LEDs in screen and display backlighting can be seen as the drivers of additional demand to the market.

8. INTRODUCTION OF LIGHT-EMITTING DIODES
Light-emitting diodes (LEDs) are "a type of solid-state lighting (SSL)" which are considered to be the transforming force of the entire lighting market. LEDs are better performing in "terms of lifetime, energy efficiency, color quality and versatility," and due to "their increasing cost competitiveness, this technology has begun to successfully compete in a variety of lighting applications".

Potential industry trends

1. SLOWING LED MARKET GROWTH IN THE NEAR FUTURE
The growth rate for the entire industry is expected to not be higher than 10% in the next five years.

2. SHRINKING PROFIT MARGIN
There is a chance of numerous manufacturers withdrawing from the LED market in the next few years based on the fact that LED lighting is now sold for a price that is very close to manufacturing costs, which reduces companies’ profitability.

3. AUTOMOTIVE LIGHTING REVOLUTION
LED automotive lighting introductions have grown from only the most expensive car models to all models in the high class as well as the middle class.

4. NON-VISIBLE LED LIGHT APPLICATIONS INCREASINGLY VALUED
As the market for LED lighting is extremely competitive, there is a big need to develop special lighting applications such as non-visible LED lights in order to drive more profit.

CONCLUSION

Among the current LED lighting industry trends are growing mergers and acquisitions in the market, application of non visible LED lights, increasing awareness of energy saving, rising electricity prices in the US, development of lighting sales channels, external legislation and subsidy programs, further sales growth and introduction of light-emitting diodes. The potential industry trends could lead to a slowing LED market growth in the near future, a shrinking profit margin, an increase in replacement lighting market penetration and an increase in the value of non-visible lighting applications.
Part
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Part
02

LED Lighting Industry Trends US: Products and Vendors

OVERVIEW

LED lighting has been dominated mostly by the residential lighting market, but the automotive and architectural markets are now quickly catching up to the residential market. Innovations in LED lighting are also giving rise to new ways to use LEDs such as new types of displays for phones, larger screens in automobiles and zone controlled lighting in both residential and commercial buildings.

FINDINGS

KEY PLAYERS TO NOTE

In 2016, the LED lighting industry made $26.09 billion in the US and it is projected to make $54.8 billion by 2022. LED's are finding homes in everything from phones, automobiles, indoor and outdoor lighting.

INDUSTRY TRENDS

RESIDENTIAL LIGHTING TRENDS

The largest portion of the LED lighting industry is in residential lighting applications. Residential lighting held 40% of the total market share in 2016. This includes all indoor lighting of residential buildings (rooms, hallways, kitchens, etc.). There has been a global move to LED lighting in homes because it is more energy efficient, are brighter and they last longer. Globally the push to LED lighting should see 6-7 billion LED lighting applications per year before 2022.

MOBILE APPLICATION TRENDS

Samsung previously dominated the OLED display supply market, until Apple unveiled its iPhone X, thus creating competion. Apple's switch to an OLED display for the iPhone X has prompted some Chinese smartphone makers to consider mini-LED backlight panels instead of OLED displays. These makers (Huawei, Oppo, and Xiamomi) want to move to mini-LED displays so that they don't have to fight over the supply of OLED supply with Apple and Samsung. They have asked a Taiwanese supplier to create the mini-LED displays for products they plan to debut in the second half of 2018. Along with mini-LED backlights, these products will also feature a flexible substrate that will enable curved backlighting.
While Samsung Display has held the market on OLED displays for Apple, Apple is working on a deal with LG Display that will significantly increase their supply of OLED panels to around 190 million displays in 2018.

AUTOMOTIVE TRENDS

Along with the adoption of mini-LED's in the mobile industry, the automotive industry is also adopting the technology for the display screens seen in most cars over the last five years or so. Initially, these displays were only used for a few functions in the car and only around 7 to 9 inches in size. Now, these panels are used to control most of the operation of the vehicle and range in size from 10 inches to over 12 inches and can display high definition entertainment and feature curved displays. Mini-LED's are going to replace Micro LEDs that backlight LCDs and are expected to be in commercial production this year. Instead of one single backlight display, the mini-LEDs will be thousands of LED chips which offer a better quality of the display, more flexibility, less power consumption and better visibility in strong sunlight. It is estimated that 15.56 million mini-LED chips will be in demand in just the first year of commercial use.

ARCHITECTURAL TRENDS

Architectural lighting includes lights for pools, gardens, landscaping and building facades. In China, LED screens are being used to create light and music shows all over the country. The demand for LED in architecture is being spurred along by government policy and initiatives to switch to LED lighting rather than traditional methods. Groups like The Climate Group are helping to push this movement forward and now LED lighting is not just in homes but can be found in more commercial buildings nowadays.

COMMERCIAL AND INDUSTRIAL TRENDS

In the commercial and industrial LED lighting market, commercial use accounts for the largest portion of LED lighting. One of the popular commercial uses is smart lighting, which is the ability to adjust the amount of light required using control zones. Smart city plans have been found to reduce peak power demand and the overall energy consumption of many cities across the US and Europe. There are also future government bans on incandescent lighting which will help to push the LED lighting market forward in the commercial industry. Currently, the high initial cost of LED lighting is preventing widespread use, but with the coming bans, this soon won't be as much of an obstacle.

PRODUCT SPECIFIC TRENDS

LED chip prices were low in 2017 so Chinese LED manufacturers have created an expansion plan. The purpose of the plan is to drive up the use of LED chips thus driving up the cost.
UV-C LED lighting is used in consumer lighting products and companies such as LG Innotek, Seoul Viosys and Biorayton are expanding the consumer market with cheaper products. This creates a demand for UV-C LED's, and suppliers can offer them at higher prices, but new companies trying to get into the industry will have to fight harder to gain a spot in the market due to the higher prices.
With the increase in the use of infrared technology, infrared LED chips are rapidly becoming more popular. The technology is used in industrial surveillance, virtual reality, and facial recognition products. In 2017, it was expected that this market would reach about $441 million and that it should increase to $699 million by 2021.

CONCLUSION

LED lighting is seeing more widespread use throughout many industries due to government policies and the lower energy demand of these products. Residential applications have been the most common use of LED lighting, but other industries are catching up. In the mobile and automotive industries LED lighting is increasing for use in backlighting displays. The commercial industry (including architecture) is beginning to use LED lighting for applications such as smart lighting and landscaping. Products such as LED chips, UV-C lighting, and infrared technology have been low cost and on the market, but more companies are picking up these products causing the prices to soar for suppliers.
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