Led Industry Analysis

Jeff Hsu quasi1209@gmail.com

March 15, 2014

Brief Analysis of the LED Industry

LED Insustry

The LED Industry is Entering a rapid expansion period

1) Low market penetration rate implies that there is great potential for growth in the industry.

Figure 1: LED Lighting Penetration Rate

Key Ratios and Statistics

Key Ratios and Statistics

Two main applications for the LED industry are (a) Backlight for vision machines and (b) General lighting. According to LEDInside, a website of TrendForce corp., the market penetration rate at 2013 of them are 97% and 25%, respectively (Figure 1 & 2). Thus the key driver for the LED industry would be lighting for the following years. Source: LEDinside

Figure 2: Devices Penetration Rate

LED lighting is for sure more efficient than traditional light bulbs, and people understands this fact. In the past few years, we can see LED lighting being widely used in the commercial and industrial segments given its longer usage time and lower electricity used. Though the backlight sector is continually estimated to decline in the following years, the increasing demand and currently low penetration rate in lightning sector can offset the decline and lead the LED industry to a multi-year expansion period.

2) New housing and government support triggers the demand side of LED lighting

As the economy slowly recovers, new housing growth rate in countries such as the US (Figure 3) and China might indicate another signal for LED residential lighting demand growth. Government support also plays another important role for the increasing demand. For example the US government bans the production of several incandescent light bulbs, another example is subsidiary programs in China. With a price rebate up to 60%, the government support acts as another trigger to LED increasing demand.

Source: iSupplier Figure 3 : New Residential Construction Annual Rate Authorized

Source: US Census Bereau

March 15, 2014 Brief analysis of...