Changxin, a guest writer for LEDinside highlights several market trends ahead of the upcoming Guangzhou International Lighting Fair, including a thorough analysis of why the industry has escaped being sucked into the vicious cycle of low price wars this year.

The National Association of Independent Lighting Distributors (NAILD) will address the tools needed to navigate the changing landscape of lighting at its annual conference this year, themed Surviving the LED Revolution, April 10-13 in San Antonio, Texas. The conference will guide attendees through an ever-changing industry with educational sessions, networking opportunities and hands-on exhibitions.

Intense price competitions in the LED market over the last few years has caused manufacturers a lot of pain, but it is also the driving force of technology innovation. An emerging trend is the transition of L1 manufacturers migration into L2 manufacturing, projected Sean Zhou, Regional Marketing Director Asia, Lumileds at LEDforum 2015, held at Room 201, National Taiwan University Hospital International Convention Center, Taipei, Taiwan.

If LED manufacturers were a K-pop group releasing a catchy song with a repetitive chorus, it would probably be “price wars are killing me slowly.” It has been a recurring subject in LED manufacturers presentation at LEDforum in the last three years. Intense price competitions in the LED market over the last few years has caused manufacturers a lot of pain, with the worse still to come in 2016, said Sean Zhou, Regional Marketing Director Asia, Lumileds.

Go Scale Capital’s ultimate motive for acquiring Lumileds is to list the LED chip company on the Chinese bourse, a Commercial Times report cited Epistar Chairman B.J. Lee saying at a recent company shareholder meeting.

The latest research by LEDinside, a division of TrendForce, sees a significant growth for the infrared (IR) LED market in the near future. LEDinside’s 2Q15 Gold Member Report - 2015 Global LED Supply and Demand Market provides a clear outline on the IR LED’s wide range of applications, such as imaging sensors, motion sensors, light sensors, proximity sensors, position detection systems, biometric recognition systems, and heart rate and blood oxygen monitors.

LEDforum 2015 in Guangzhou, Guangdong Province, China is less than 60 days away! If the LED industry’s performance in 2014 was extraordinary, than 2015 will be glorious. LEDinside estimates that the global LED lighting market will reach $25.7 billion dollars and its market penetration will increase 31% in 2015, while the overall lighting market is projected to grow to $82.1 billion.

India’s LED industry is undergoing dramatic changes, and is entering an exponential growth phase as more manufacturers jump in, said Deepak Loomba, Managing Director and CEO of De Core Nanosemiconductors during a New Critical Territory in Global Lighting Marketing forum last Thursday at TILS 2015, Taipei, Taiwan.

Many LED industry experts have been worried that LEDs long lifetimes of more than two decades would result in longer replacement cycles that could become obstacles to company business models. Pessimistic manufacturers even forecast LED orders could eventually ease as time moves on. Ellis Yan, the CEO of U.S. manufacturer TCP Lighting (TCP), however, shared a very different outlook during a recent interview with LEDinside in Taipei, Taiwan.

Representatives from Everlight and Edison Opto have recently rebutted an earlier Digitimes report claiming the two companies were in acquisition talks.

According to a recently published smart lighting report from IHS Technology, increasing emphasis on reducing commissioning costs is promoting the use of more distributed lighting control architectures with fixture-level control. 

As the LED industry inventory adjustments ends, Epistar has received a large order from Samsung in December, which is expected to spur the Taiwanese LED manufacturers growth, according to an UDN report.

For many LED manufacturers, 2014 has been a prosperous and challenging year. Lighting market demands were stronger than expected in 1H14, leading to a period of LED supply shortages. Despite the positive development, the industry was impacted by clients double booking and distributors rising inventory levels during second half of the year. Many manufacturers were impacted by the markets cooling demands, and price competition as a result. As a result a lot of manufacturers’ performance in first and second half of the year was very polarized.

Manufacturers, who hope to leave the fiercely competitive Chinese lighting market and other mature lighting markets, are turning their attention to emerging Southeast Asian markets or even Russia, said Roger Chu, Research Director of LEDinside at LEDforum 2014 which took place in Taipei, Taiwan last month.

The LED segment might have made significant technology advancements that have driven down costs, and made the bulbs more affordable to most households, the office lighting sector remains a difficult segment for LED manufacturers to tap into, said Michael Schmitt, Regional Market Director, Asia-Pacific, Osram Opto Semiconductors at LEDforum 2014, which took place in Taipei, Taiwan last Friday. 

LED prices will continue to fall over the next few years, but this is a phase that will probably pass, said Sean Zhou, Regional Marketing Director, Asia, Philips Lumileds at LEDforum 2014, which took place Friday in Taipei, Taiwan. Manufacturers aiming to improve profits will be increasingly turning towards cost-effective technologies, such as flip-chip LEDs.

Global LED trends show backlight applications are in decline, and that lighting will remain the major market driver, said Sean Zhou, Regional Marketing Director, Asia, Philips Lumileds at LEDforum 2014, which took place Friday in Taipei, Taiwan. In terms of regional market performances, LED market growth in Japan has waned compared to other regions.

Korean electronics conglomerate Samsung Electronics intends to close down its LED luminaire business, according to a report by Korean media Yonhap Infomax.

Following the spin-off of Osram from Siemens, global lighting giant Philips recently announced it would split off its lighting business into a stand-alone company on September 23. That move follows an announcement in June that Philips would combine Lumileds, its LED components business and automotive lighting business into a separate company.

The LED industry in Guangdong Province, China showed the most growth out of eight emerging industries in 2013, according to a Securities Times report.

To expand its presence in the international market, Leyard Optoelectronic (Leyard) recently announced scaling up financing two subsidiaries to speed up business developments and management.

Osram stated in its recent 3Q14 financial earnings press release intentions of implementing various additional measures to further improve the competitiveness of its operating units. The associated capacity adjustments of about 7,800 positions worldwide over the next three fiscal years. A Reuter’s report noted 1,700 positions in Germany would be affected, while the remaining 6,100 job cuts will be directed towards other global jobs. Depending on the implementation speed of the measures and the restructuring costs’ effect on earnings, the reported EBITA margin could be below the targeted 8 percent EBITA margin in the fiscal year 2015. Below is Osram's financial report for 3Q14.

Once three market indicators that signal the arrival of the maturing LED industry are reached, clients will no longer be focused on energy efficiency anymore, a China-led.org report cited Taiwan LED Lighting Industry Alliance Secretary Horng-Ching Hsiao saying at Green Lighting 2014 in Shanghai, China.  

Increasingly market popularity for Patterned Sapphire Substrate (PSS) has led to Aceplux Optotech to increase capital by NT $297 million (US $9.90 million), according to a Money DJ report.

The industry’s new round of global LED patent competitions will bring new challenges to the industry, said Ryoichi Tohmon, Director of Intellectual Property Project of Global Marketing and Sales Department at Toyoda Gosei during a talk at LEDforum Guangzhou 2014 in Guangzhou, China on June 11, 2014.

The arrival of LED industry’s prosperous three years is for real this time, a recent CNA report quoted Epistar Chairman B.J. Lee saying at the company’s latest stockholder meeting.

Although significant consolidation has already occurred across the LED value chain, Memoori Research remains of the opinion that further consolidation is required for the market to mature into a stable state. Achieving economies of scale, cost reductions, sustainable market share and access to innovative IP to meet rising output requirements, will all remain as drivers. This will further increase the likelihood of deal activity to 2018.

Barbados, an island country located in the Caribbean is a place most LED manufacturers overlook as a potential market, but not for Caribbean LED lighting (CLL).

Osram officially spin-off from parent firm Siemens AG of Germany in July 2013, becoming an independent firm in order to fully provide for their clients. Lighting Japan 2014 invited Osram to give a keynote speech in their smart lighting conference to elaborate on the changing trends in the LED industry. During the conference, Osram mentioned having a complete supply chain including chip, package, module, lamp, solution, and after sales services in order to fully develop the LED lighting market. How to use the advantages of LED products and technology to develop energy management systems is consistently a deeply discussed topic.