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LED Chips Market - Growth, Trends, COVID-19 Impact, and Forecasts (2023-2028)

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  • 120 Pages
  • April 2023
  • Region: Global
  • Mordor Intelligence
  • ID: 4622787
UP TO OFF until Sep 30th 2023

Quick Summary:

In a technological landscape where energy efficiency and cost-effectiveness are paramount, the LED Chips market is poised for extensive growth. In this pursuit of peak performance, numerous industries are rapidly adopting and investing in LED technology, with promising implications for businesses and investors alike. This comprehensive and insightful market research report serves as a guiding tool to navigate the LED chips market, offering key insights to inform strategic decision-making.

Leading the wave of LED lighting adoption is the automotive industry, with major brands implementing innovative LED technologies to enhance vehicle functionality and aesthetic appeal. With the blossoming of LED niche lighting applications such as fishing, healthcare, marine, horticulture and harbor lighting, the demand for LED chips is seeing a steady surge. Pair this with exponential growth in LED application in consumer goods and automotive sectors, healthcare, biomedical instrumentation and forensics and the market's promise becomes undeniable.

The comprehensive market research report available for purchase presents actionable industry insights and trends spanning the globe, providing your business the strategic edge it needs. Dive into an in-depth understanding of competitive dynamics, technological advances and untapped opportunities in the LED Chips market to fuel your business growth and fortify position in this rapidly growing industry.

During the forecast period, the LED Chips Market is expected to register a CAGR of more than 11.9%. The increasing demand for cost-effective and energy-efficient lighting, as well as a variety of other factors, are driving up demand for LED chips. As a result, most developments in the LED chip market aim to provide more efficient and advanced products that offer more brightness and consume less power.

Key Highlights

  • The automotive enterprise is at the forefront of LED lighting adoption, both internally and externally. OSRAM, a leading lighting manufacturer and pioneer in producing lighting for the automotive industry, has supplied lighting equipment to several manufacturers. The ability to 3D print resulted in a lightweight module used for automotive applications, aiding vendors. However, such applications have been limited to high-end vehicles.
  • Moreover, a recent report published by LEDinside stated that Micro LED technology not only offers excellent performance in brightness and contrast that surpass OLED, but it also has a fast response time, low power consumption, and reliability, which makes it a perfect option for mobile and automotive applications. For instance, in December 2021, Osram introduced its brightest LED for automotive front lighting, with 460 lumens at 1 A for low- and high-beam headlights. The Oslon Black Flat X family is available in single- and dual-chip configurations. Furthermore, in mid-2022, the company will introduce multi-chip variants.
  • Recently, the Government of India supported a plan to deploy low-cost LEDs across the country among various end users.According to the Indian government, LED adoption is driving annual energy savings of over 3,350 million kWh, resulting in the avoidance of over 6,725 MW of peak demand.
  • The other primary driver behind global LED chip growth is the rise of LED niche lighting in fishing lighting, healthcare lighting, marine lighting, horticulture lighting, and harbor lighting. For signs and signals, LED chips are increasingly being used. These can operate on solar power or electricity and can be used to control both vehicle and pedestrian traffic at intersections. LED technology with extremely low power consumption values is used in the Signs and Signals lights.
  • Companies keep putting money into new products to increase the number of ways LEDs can be used in high-end applications.In April 2022, Ams Osram announced a USD 850 million investment to expand its LED production plant in Kulim, Malaysia. The new fab will produce LED chips and microLED chips on 8-inch wafers.
  • Therefore, the growth in LED applications in the consumer goods and automotive sectors, along with healthcare, biomedical instrumentation, and forensics, supports the development of the LED chip market. For the TV display application, the industry is moving from the usage of LED to OLED (organic light-emitting diode), which is the latest innovation and is expected to penetrate more of the market. This trend may cater to the volume growth of the LED market and the LED chip market.
  • In the wake of the COVID-19 pandemic, the UVC LED sector gained momentum. UVC products, mainly for surface disinfection, flooded the market due to the COVID-19 outbreak. Disinfection is not included in the present norms and guidelines for using these devices. The UV LED market is expected to expand at the same rate as the traditional UV lamp market when the technology is on par with conventional UV lamps. Such a change could also increase system value due to the transition.

LED Chips Market Trends

Automotive is Expected to Hold Major Market Share

  • Vehicle manufacturing is on the rise around the world, which has a positive impact on the automotive lighting industry. The increasing production of electric automobiles heavily influences the automotive lighting market's revenue due to lower fuel costs and less harmful environmental emissions. As ambulances and police cars increasingly rely on lighting systems for signaling purposes, the demand for vehicle lighting techniques has increased. Government activities primarily drive the worldwide car lighting market to maintain road safety, such as generating awareness about vehicle protection and illuminating roadways with appropriate usage of automotive lighting.
  • Further, in April 2021, Lumileds, a leading provider of lighting solutions to the automotive industry, introduced its advanced line of Philips X-treme Ultinon LED headlights and fog light bulbs. The Philips X-treme Ultinon LED headlight bulbs have a highly compact, one-piece bulb design that reduces headlamp space requirements and simplifies installation in various vehicles. Such developments will further drive the studied market's growth.
  • Moreover, rising concerns about the need for a better lighting system, cost-effectiveness, and less power consumption are the key factors driving the LED market among automotive end-users. LEDs are currently in the process of replacing classic bulbs in modern vehicles. They provide high luminous efficiency, increased safety, more design freedom, and significant savings potential. Cree color LEDs are optimized for transportation lighting, including emergency vehicle lighting. Further, in March 2021, Osram Continental intends to incorporate LED technology into every headlamp. It would make the deployment of LED headlamps across all automotive classes less expensive.
  • LED lamps mainly consume only one-tenth of the electricity an incandescent lamp consumes. In this context, the European Union has officially recognized LED headlamps as an energy-efficient technology. Companies like OSRAM offer a broad range of LEDs for the automotive industry; for example, Audi is using OSRAM LEDs in the headlights of a new model of the Audi A8. For general lighting, OSRAM has almost all SMD LEDs from 0.1W to 5W in all dimension packages, i.e., 3030, 5050, 5630, 2835, and others.
  • Although automotive production globally witnessed a significant drop during the COVID-19 pandemic, the industry saw a rise in 2021. According to OICA estimates, automobile production stood at 80 million units in 2021, up from 78 million in 2020. As a result, the growing automobile industry will boost market growth over the forecast period, as automakers are heavily focusing on incorporating LED lights into their vehicles.

Asia Pacific is Expected to Witness the Highest Growth Rate

  • The Asia-Pacific region has a good demand for consumer electronics and automobiles, where rapid technological changes result in high performance. As a result, the need for increased and medium-power LEDs is expected to rise. Given rising disposable income, rapid urbanization, and a shift in spending habits, the region has been the largest market for consumer electronics. Further, according to IBEF, the consumer electronics industry stood at USD 9.84 billion in 2021 and is expected to more than double to INR 1.48 lakh crore (USD 21.18 billion) by 2025.
  • Furthermore, the government is actively introducing initiatives to move the country further along the path of transforming illumination and energy efficiency. Furthermore, EESL intends to attract investments totaling INR 8,000 crores (USD 1.09 billion) under the Street Lighting National Programme (SLNP) by 2024, covering the entire rural India.The company plans to install and retrofit approximately 30 million LED streetlights. Such investment will further drive market growth.
  • Moreover, the expansion of LED applications, such as in the automotive sector, supports the growth of the LED chip market. Likewise, according to IBEF, the Indian passenger car market was valued at USD 32.70 billion in 2021 and is expected to reach USD 54.84 billion by 2027, accelerating market growth.
  • China is also a significant exporter of LED solutions worldwide; along with this, the country is home to numerous local vendors that cater to local demand. For example, Chenfeng invested 600 crores in October 2021 to produce LED light components in a single unit.The Chinese company will establish a manufacturing base in the 750-acre township area developed by the Greater Noida Industrial Development Authority. It will produce LED lighting components.
  • Further, in November 2021, SmartVision announced the release of its first self-developed micro LED chip and a B+ funding round to target the AR/VR market. Furthermore, on October 31, 2021, SmartVision hosted the 'Xinji-Liandong' AR/VR Integrated Circuit Public Service Platform inauguration ceremony and the 2nd AR/VR Seminar at the Jiangbei New Area in Nanjing. The Tianmu III-010-A is the company's first self-developed silicon-based micro LED chip.
  • Moreover, in March 2021, the government launched the GRAM UJALA project for rural households to circulate LED bulbs at an affordable price of INR 10 per bulb. To match India's climate change action, the government plans to distribute 1.5 crore (15 million) LED bulbs under this scheme, resulting in substantial energy savings of 2025 million kWh per year and CO2 reductions of 1.65 million tonne per year.
  • Furthermore, to promote investments in the market, the Indian government has imposed a free tariff (basic tariff) on LED component imports, facilitating the entry of LED products and LED chips as semi-finished products. Furthermore, with the Indian government's announcement of installing 2.1 lakh LED lights in Delhi, the state capital has fully embraced India's LED revolution.

LED Chips Market Competitor Analysis

The LED chips market is favorably competitive and consists of several leading players. In terms of market share, few significant players currently dominate the market. The manufacturers focus on product differentiation to gain a competitive advantage. The manufacturers also try to show their products superior quality to achieve higher sales.

InJuly 2021, Osram introduced a new Quantum Dot LED. Osconiq E 2835 CRI 90 (QD - quantum dot) expands ams Osram's portfolio of high-quality lighting solutions with a new mid-power LED. Even at high color rendering indices, in-house quantum dot technology ensures efficiency values of more than 200 lm/W.

In March 2021, SMART Global Holdings, Inc. announced the completion of its acquisition of Cree, Inc.'s Cree LED Products business unit. SGH's Cree LED business unit will operate as Cree LED. SGH expects to go over the Cree LED acquisition in greater depth at its increasing quarterly earnings.

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Table of Contents

1.1 Study Assumptions and Market Definition
1.2 Scope of the Study
4.1 Market Overview
4.2 Industry Attractiveness - Porters Five Forces Analysis
4.2.1 Bargaining Power of Suppliers
4.2.2 Bargaining Power of Buyers
4.2.3 Threat of New Entrants
4.2.4 Threat of Substitutes
4.2.5 Intensity of Competitive Rivalry
4.3 Industry Value Chain Analysis
4.4 Assessment of Impact of COVID-19 on the Market
5.1 Market Drivers
5.1.1 Backlighting Application of Devices Boosting the LED Chips Market
5.1.2 R&D Investments and Government Initiatives
5.1.3 Power Efficiency of LED Chips
5.2 Market Challenges
5.2.1 Growing Adoption of OLEDs in Consumer Electronics
6.1 By Application
6.1.1 Backlighting
6.1.2 Illumination
6.1.3 Automotive
6.1.4 Signs and Signals
6.1.5 Other Applications
6.2 By Geography
6.2.1 North America
6.2.2 Europe
6.2.3 Asia Pacific
6.2.4 Latin America
6.2.5 Middle East and Africa
7.1 Company Profiles
7.1.1 OSRAM Opto Semiconductors GmbH
7.1.2 Nichia Corporation
7.1.3 Philips Lumileds Lighting Company
7.1.4 Epistar Corporation
7.1.5 SemiLEDS
7.1.6 Bridgelux Inc.
7.1.8 Seoul Viosys Co. Ltd
7.1.9 Samsung Electronics. Co. Ltd
7.1.10 Cree Inc.
7.1.11 Formosa Epitaxy

Companies Mentioned

A selection of companies mentioned in this report includes:

  • OSRAM Opto Semiconductors GmbH
  • Nichia Corporation
  • Philips Lumileds Lighting Company
  • Epistar Corporation
  • SemiLEDS
  • Bridgelux Inc.
  • Seoul Viosys Co. Ltd
  • Samsung Electronics. Co. Ltd
  • Cree Inc.
  • Formosa Epitaxy