The European revenue of the LED packaging market is expected to grow at a CAGR of 8.2 %. LED packaging refers to the usage of Light Emitting Diodes in the products under consideration. The LED technology has captured the imagination of the lighting industry by offering small and efficient lighting solutions to a diverse set of consumers, with power-saving features and enhanced efficiency. Thus, manufacturers are focusing on LED design for appropriate packaging and viability of the end product.
- The LED packaging market's growth is driven by the surge of demand for efficient UV LED packages amid the pandemic of disinfection systems. UV LEDs are also used in UV curing and biomedical research. UV radiation can be classified into UV-A, UV-B, and UV-C. The pandemic has boosted the demand for UV-C LEDs, with the light having germicidal properties by killing the bacteria and viruses by destroying their nucleic acids and disrupting the DNAs. Currently, UV-C LEDs are used in air, water, and surface disinfection systems while offering longer lifetimes and reliability.
- The recent government initiatives and regulations are promoting the use of LEDs for energy conservation, efficiency, and environmental benefits. This has driven the market for SMD LEDs that are versatile and can accommodate chips with complex designs. SMD LED packages used in luminaires are growing continuously due to the superior energy efficiency of these LEDs compared to other conventional light sources. This growth can also be attributed to the steep fall in the price of SMD LEDs, thereby making them affordable for consumers.
- LED packages market is also driven by the automotive interior and exterior lighting due to the high demand for central stack displays and instrument cluster displays. The latest trend in LED packaging technology is CSP technology, which has gained momentum in recent years in the automotive vertical owing to its features such as high optical density, good lumen maintenance, color stability, reduced current consumption, and reliability over conventional LED packages.
- Additionally, the automotive display market in the region is expected to experience substantial developments in the coming years. For instance, the introduction of augmented reality-enabled OLED in the automotive display market and some of the major automotive manufacturers in Europe have started to integrate OLED displays in dashboards and other screens from 2020 in most of their vehicles due to the high demand for central stack displays and instrument cluster displays.
- The market is witnessing intense competition owing to the surged price pressure and increased number of manufacturers offering these LED packages. The global consumer base for TVs has reached saturation as consumers keep using old products as long as they serve their expectations, resulting in limited demand for new technology-based products. Additionally, the increased pricing competition in the LED packaging market has pressured LED manufacturers to develop innovative lighting solutions.
- The LED packaging business saw a decline in the European Market market due to the COVID-19 pandemic. Many countries in Europe implemented more stringent infection control measures because of the spread of COVID-19. Some of the primary critical players in the market saw an unprecedented slump in the LED packaging business. The ongoing trade disputes, geopolitical uncertainties, and the continued decline in automotive manufacturing are the other crucial challenges in the European LED packaging market.
Key Market Trends
Increasing Demand from Residential Segment to Drive the Market
- The residential sector is being driven by a shift in consumer demand toward energy-effective lightings, such as LEDs. Moreover, recent government initiatives and growing awareness among consumers expect to impact the industry significantly.
- Total residential lighting consumption in the European Union is increasing, owing to rising welfare, particularly in some countries, and a fast increasing number of lamps per home. The efficacy and luminous properties of LED bulbs are rapidly improving. LED lights are predicted to save a significant amount of energy in the future. LED lamps have a lifespan of 5 to 25 times that of traditional lights.
- Out of all the lighting sources, LED lights hold a significant share. The growing awareness and increasing policies of the various governments have globally increased the penetration rate of LEDs. The global LED penetration is on the continuous surge YoY.
- According to International Energy Agency, the sales of LEDs are reaching at a record number of sales of more than 10 billion units in 2019, including both light sources (bulbs, tubes, modules) and luminaires. Both residential and commercial LED deployment is advancing and LED sales are now exceeding that of fluorescent lamps. According to IEA France, commercial buildings should be in line with the clean energy transition, thereby minimizing the carbon footprint.
- The increasing prominence of LEDs can also lead to intelligent lighting systems (connected lighting) in industries. Because LEDs are more flexible in terms of color change and brightness, networked systems are more likely to profit from the usage of LEDs over traditional lighting sources.
Government Initiatives in the Region is Significantly Driving the Market Growth
- The European Commission adopted new regulations on energy efficiency and energy-labeling in December 2019. EU member states voted to phase out inefficient halogen lamps and compact fluorescent lamps in 2021 while introducing minimum performance and quality standards for LED lamps and luminaires. This regulation applies to applications including household, commercial, industrial and street lighting. The new rules will come into force on September 1, 2021.
- The SSLs (Solid-State Lighting) based on components is based on LEDs, OLEDs, and LDs challenges conventional technologies. It is thereby anticipated that in the short term, all-electric lighting will be based on SSLs, and the market for SSLs will increase on a massive scale.
- The UK Government Energy Efficiency program has increased the adoption of the LED lighting market in the UK. The government incentivizes by offering various rebate and tariff programs to replace existing traditional light sources with the LED lamps; the government has collaborated with multiple electricity providers for the program’s implementation.
- One of the most significant market shares is held by the highways & roadways lighting application segment of the outdoor smart lighting application owing to government support and subsidies encouraging the installation and use of smart lighting control solutions. The rescaling of energy labels is stricter and designed, so that very few products are initially able to achieve the “A” and “B” ratings, leaving space for more efficient products to gradually enter the market with the most energy-efficient products currently on the market will typically now be labeled as “C” or “D.” The rules provide for an 18-month period where the products bearing the old label can continue to be sold on the market in physical retail outlets to sell the existing stock.
The market is witnessing mergers and acquisitions by vendors, thereby, offering lucrative opportunities to the companies that enable them to boost technological advancements and market growth. Some of the prominent players in the market are investing in new technologies and solutions for the labeling industry, which is expected to drive the investment in the market further.
- January 2021 - Osram group has launched Osconiq C 2424, a chip scale package LED. Outdoor luminaires may be made more efficient and cost-effective with their industry-leading efficiency. Furthermore, it has a long lifespan.
- October 2020 - Cree, Inc. announced that it had reached a deal with SMART Global Holdings, Inc. to sell its LED Products business unit (“Cree LED”) for up to USD 300 million, comprising fixed upfront and deferred payments, as well as contingent consideration.
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Table of Contents
1.2 Scope of the Study
4.2 Market Drivers
4.2.1 Government Initiatives and Regulations to Adopt Energy-efficient LEDs
4.2.2 Increasing Demand for Smart Lighting Solutions
4.3 Market Restraints
4.3.1 High Level of Competition into the Market
4.4 Industry Value Chain Analysis
4.5 Industry Attractiveness - Porter's Five Force Analysis
4.5.1 Bargaining Power of Suppliers
4.5.2 Bargaining Power of Consumers
4.5.3 Threat of New Entrants
4.5.4 Threat of Substitutes
4.5.5 Intensity of Competitive Rivalry
4.6 Assessment of Impact of COVID-19 on the Market
5.1.1 Chip-on-board (COB)
5.1.2 Surface-mount Device (SMD)
5.1.3 Chip Scale Package (CSP)
5.2 By End-user Vertical
5.2.3 Other End-user Verticals
5.3.2 United Kingdom
5.3.6 Rest of Europe
6.1.1 Cree Inc.
6.1.2 OSRAM Licht AG
6.1.3 Samsung Electronics Co. Ltd
6.1.4 LG Innotek
6.1.5 TT Electronics
6.1.6 Nichia Corporation
6.1.7 Seoul Semiconductor Co. Ltd
6.1.8 Stanley Electric Co. Ltd
6.1.9 Lumileds Holding BV
6.1.10 Everlight Electronics Co. Ltd
A selection of companies mentioned in this report includes:
- Cree Inc.
- OSRAM Licht AG
- Samsung Electronics Co. Ltd
- LG Innotek
- TT Electronics
- Nichia Corporation
- Seoul Semiconductor Co. Ltd
- Stanley Electric Co. Ltd
- Lumileds Holding BV
- Everlight Electronics Co. Ltd