LEDinside Expects LED Suppliers to Accelerate Their Expansion into Niche Markets in 2017

The value of the global LED market is estimated to grow 3.4% annually to US$14.8 billion in 2016, according to LEDinside, a division of TrendForce. The LED industry will again be under tremendous competitive pressure in 2017, and participants will need to accelerate their entries into more profitable niche markets such as fine-pitch LED displays, UV LEDs and IR LEDs. LEDinside forecasts that the value of the global LED market will total US$15.4 billion, up 4% from 2016.
 
“The projected growth in LED market value for this year is marginal, but the industry has witness some major changes,” said Roger Chu, research director of LEDinside. “The surge in demand for fine-pitch LED displays has caused a general tightening of chip supply. As a result, some chip and package products have seen price hikes for the first time in five years.”
 
Chu also pointed out that rising prices for hard commodities such as copper and aluminum during the second half of 2016 have also led to significant price hikes for LED lighting products. “LED lighting vendors have adjusted their prices to reflect the increase in material costs,” said Chu. “The actual contribution of this wave of price increases to the vendors’ profits is limited.” Since the general state of the LED lighting market remains weak, LED suppliers are actively developing strategies to transform their businesses and accelerate their entries into the blue ocean niche markets.
 
Fine-pitch LED displays will be a highly contested application market in new few years
Traditional LED display makers shifted much of their development efforts towards fine-pitch LED displays through 2016 as consumers demand better image quality from these products. “LED display makers’ focus on fine-pitch LED displays has resulted in a several-fold increase in LED usage volume,” said Chu. “And many Chinese LED package suppliers have undertaken capacity expansion just to capture a share of this market.”
 
However, this scramble has also generated intense pricing competition. To avoid getting trapped in a price war, suppliers will have to improve their product specifications and make packages more compact. Currently, fine-pitch LED displays with pitches measuring 1.5mm and less constitute a market segment where LED suppliers are not under pressure to lower their prices.
 
UV-C LEDs will find more applications as their efficiency improve
UV-C LEDs are another emerging market with a lot of blue ocean opportunities. “Deep UV has sterilization and purification features that would be useful in many application areas, including home appliances, water treatment, air purification and so on,” said Chu.
While there is high demand for UV-C LEDs, there are challenges in developing this market. UV-C LED chips are currently very expensive and have low external quantum efficiency. Also, application development for UV-C LEDs used to be mainly led by research institutions based in Japan, Europe and the U.S. These organizations came up with solutions that could not achieve economies of scales. Nonetheless, more LED suppliers are starting to see the importance of UV-C LED products and investing more in developing related applications. The industry’s contribution therefore will speed up the growth of the UV-C LED market in the near future.
 
Applications for IR LED components will become even more diverse as well in the future
IR LED is a relatively mature technology and offers inexpensive solutions in many application areas. Iris recognition sensors and motion sensors for virtual reality devices, for instances, are two of many newly emerged applications that provide lucrative opportunities for IR LED suppliers. Vertical-cavity surface-emitting laser (VCSEL) is another related technology that has gained greater market interest in recent years. Chu noted that VCSEL is now featured in handheld devices and sensor equipment related to the Internet of Vehicles. “The expansion of applications for IR LEDs depends on the willingness of end-system integrators to adopt them,” said Chu. “Successful adoption of IR LEDs in turn is based on the values that they can add to different devices and equipment.”
 
Micro-LED displays may arrive on the market as early as next year
Micro-LED is a next-generation display technology that has the potential to overtake OLED in the future. While major branded companies in various industries have begun to invest in this technology, it will be some time before micro-LED can supplant TFT LCD and OLED solutions that are now available on the market. At the same time, there are many other advanced display technologies that are in the race with micro-LED to achieve commercialization and mass production.

Branded companies that are intent to releasing micro-LED products have developed market positioning plans and applications that would set this technology apart from LCD or OLED. Furthermore, they are working to find the right trade-off between pixel volume and pixel density (as expressed in pixel per inch or PPI) so they can begin mass production as quickly as possible. Therefore, micro-LED displays that will soon hit the market can either have high pixel volume or high PPI but not both together. LEDinside anticipates that devices featuring micro-LED displays will arrive on the market in 2017 at the earliest.

LEDinside Gold Member Report

LED Supply Chain - Backlight / Lighting / Automotive / Display / UV LED / IR LED
Major LED Package Ranking in Applications

LED Industry Demand and Supply Data Base Demand Market Forecast: 
2016-2021 Demand Market Forecast
(Backlight / Lighting / Automotive / Display / UV LED / IR LED/ μLED)
Excel 1Q (February) / 3Q (August)
Supply Market Analysis: 
1. Chip market revenue (external sales, total sales)
2. WW new MOCVD chamber installation volume / WW accumulated MOCVD chamber installation / WW new and accumulated MOCVD by K465i
3. Epi wafer market demand (total / by size)
LED Chip Market Analysis:
Top 10 Chip vendors' MOCVD installation, wafer capacity, and revenue
LED Package Market Analysis:
LED package vendors' revenue and LED revenue
Top 10 LED package revenues in backlight, lighting, COB, automotive, and display
LED Industry Price Survey

Price Survey - Sapphire / Chip / LED Package / Bulb

Excel 1Q (February) / 2Q (May) / 3Q (August) / 4Q (November)
LED Market Demand and Supply Analysis Demand Market PDF 2Q (May) / 4Q (November)
Backlight
General Lighting
Automotive
Display
Infrared LED Market (2Q) / UV LED Market (4Q)
μLED (4Q)
Supply Market
MOCVD Market
Wafer and Chip Market, URT
Supply and Demand Sufficiency Analysis
 
 
If you would like to know more details, please contact:
 
Joanne Wu (Taipei)
joannewu@trendforce.com
+886-2-8978-6488 ext. 912
Disclaimers of Warranties
1. The website does not warrant the following:
1.1 The services from the website meets your requirement;
1.2 The accuracy, completeness, or timeliness of the service;
1.3 The accuracy, reliability of conclusions drawn from using the service;
1.4 The accuracy, completeness, or timeliness, or security of any information that you download from the website
2. The services provided by the website is intended for your reference only. The website shall be not be responsible for investment decisions, damages, or other losses resulting from use of the website or the information contained therein<
Proprietary Rights
You may not reproduce, modify, create derivative works from, display, perform, publish, distribute, disseminate, broadcast or circulate to any third party, any materials contained on the services without the express prior written consent of the website or its legal owner.

New flux bin options offer even better optical performance and efficacy Cree LED has introduced XLamp XP-G3 S Line and XP-G4 White LEDs that are now brighter, with new minimum flux bin options for drop-in increases of output and efficacy. XP-G... READ MORE

For decades, Cree LED has been at the forefront of video LED technology, setting the industry benchmark for large-format displays, digital signage and video screens used in sporting events, concerts and commercial installations. Our expansive ... READ MORE