LED industry enters third growth cycle

PARIS – Packaged LED revenue will amount to $11.4 billion in 2012 and peak to $17 billion by 2018, according to market research firm Yole Développement (Lyon, France).

In its latest report, "Status of the LED Industry", Yole Développement noted that growth will be generated by the display (LCD TV) and general lighting applications until tremendous adoption of LEDs in lighting. As from 2014, the third growth cycle of the LED business will accelerate with the general lighting applications accounting for more than 50 percent of the total packaged LED market.

And, talking about volume, Yole said it expects that LED die surface will increase from 22.5B mm², in 2012, to 80B mm², in 2018, prompting substrate volume growth from 8M x 2” equivalent (TIE), in 2011, to 39.5M x 2” equivalent, in 2018, with a CAGR of 26 percent.


However, Yole explained that the massive adoption of LEDs in general lighting will be possible only if the cost of packaged LEDs is reduced by a factor of ten. And, this mostly depends on technology and manufacturing improvements.

“In 2012, most companies have moved to the new “El Dorado” of LED business: general lighting, which represents the next killer application for LEDs. But enabling massive adoption of the technology for such an application still requires a large decrease in the cost of LED-based products,” said Pars Mukish, Market and Technology Analyst, LED at Yole Développement, in a statement.

Industry consensus points out a cost reduction per lumen of packaged LEDs by a factor x10, Yole reported. This can be achieved through a combination of manufacturing efficiency and performance improvement, including the access to larger size wafers; improvements in LED epitaxy cost of ownership through yield and throughput; as well as improved packaging technologies (phosphors, optics…).

Additional cost reduction will also be possible via improved packaged and luminaire design, Yole concluded.