LEDs’ longevity could cause problem for market

LEDs are known to last longer than traditional bulbs, but that very trait could actually have a negative effect on the market – after all, if they last longer, they don’t need to be replaced as often. That’s the conclusion of UK-based IMS Research, now part of IHS Inc., in its recent Packaged LEDs – World – 2012 Report.

The lighting sector is currently driving growth, as most other LED end markets are nearly saturated, so global packaged LED revenue likely will peak in 2015 at $13.5 billion and then decline or remain flat through the end of the decade, IMS reports.

“This is mainly due to fewer replacements being required each year, due to the longer lifetime of [compact fluorescent lamp] and LED lamps reducing the overall market,” said IMS Research analyst Stewart Shinkwin.

The report projects the market to reach about $10.9 billion for 2012. Of this total, $2.9 billion is expected in lighting, with $8 billion in all other applications. Of the 2015 total, $5.8 billion is expected in lighting – doubling in three years – and $7.7 billion in other areas.

The company noted that if the LED adoption rate ends up being slower than predicted over the next three or four years, growth could possibly extend beyond the mid-decade.

Price erosion, set to stay in the double-digit figures, could cause the LED lighting sector’s mid-decade contraction. No other markets will grow significantly, IMS predicts.

The market report also covers how low the price of an LED could really fall and exactly how much the rate of lumens/watt improvements will slow in the second half of the decade as fundamental limits are reached. It also analyzes the television sector, the second-largest market for packaged LEDs.