Demand and usage of LEDs is booming, in direct contrast to the bearish global economy and the resulting contraction in many product categories.

Beginning in the second half of 2007, LEDs have recovered from the sluggish sales and unit shipments that characterized the market from 2004 to mid-2007. LEDs – especially certain fast-emerging niche segments like high brightness (HB) for specialized applications – have rebounded, and that resurgence will continue over the next three to five years.

As a result, the LED market will experience robust growth over the next five years, fueled by increasingly more-powerful and energy-efficient offerings that will help businesses and consumers lower their total cost of ownership, accelerate return on investment, and be more environmentally friendly.

NextGen Research, in its new report “LED Lighting: Solid State Lighting Applications, Technologies, and Market Opportunities” forecasts the overall solid-state lighting market to achieve worldwide revenues topping $33 billion by 2013. The illumination segment of the LED market will light the way with a compound annual growth rate (CAGR) of nearly 22% in the 2009-2013 timeframe as cities worldwide shift their streetlights to these more energy-efficient and ecologically friendly solutions. The display portion of the market also will shine brightly, achieving a five-year CAGR of over 14 percent.

Energized by improvements in the technology and significant extensions of product lifespans, LEDs now have powerful proponents in government agencies, municipalities, utilities and even iconoclastic, forward-thinking private citizens, all calling for widespread acceptance and adoption of LEDs.

Research analyst Laura DiDio has identified a number of trends that have combined to make this one of the most dynamic periods in the history of LEDs. These include: bifurcation in the market between commoditized LEDs and higher-end, leading-edge applications; the speed at which LED technology is advancing; standardization and green initiatives; industry consolidation; the emergence of niche market illumination applications, and new markets for mature applications.

On the other hand, says Ms. DiDio, “The LED industry still faces challenges. Vendors must work with legislators and industry groups to foster a smooth, orderly transition from incandescent bulbs to the more efficient LEDs. Vendors also must provide specific product roadmaps to assist users with business continuity planning, and provide excellent after-market technical support and guidance during the transition period.”

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