LED Lighting Market Size & Trends Analysis for 2021 

Due to over-capacity and the outbreak of COVID-19, 2020 saw a decrease in the size of the global  upstream LED component (e.g. LED chips) industry and midstream LED packaging industry. The downstream application market, though, shows strong resilience still. In 2021, as the global epidemic continues, the global LED industry is expected to benefit from a modest rebound in the upstream LED chip industry and midstream packaging industry, as well as the strong development resilience of the downstream application market. The global LED Lighting market size is expected to reach USD 180 billion by 2021, expanding at an annual growth rate of 8.2%.

In terms of the global LED market size, 2020 saw a decrease in the size of the global upstream LED component (e.g. LED chips) industry and midstream LED packaging industry, as a result of over-capacity and the outbreak of COVID-19. The downstream application market, though, shows strong resilience. The global LED market size is projected to be 166 billion US dollars approximately, with a 1.6% increase from 2019. Among them, the scale of upstream LED chip industry is expected to be 9.64 billion U.S. dollars, with a decrease of 18.7% due to the decline in light source prices; the midstream packaging industry is expected to be 16.9 billion U.S. dollars, with a 11% fall due to overcapacity and decrease in profits; with the increasing demand for filament lights, UV LED disinfection lights, and plant grow lights, the downstream application industry will be stimulated with a 5% increase totaling USD 139.5 billion. As indicated by Haitz’s law, with process improvement in production, the costs involved in LED supply chain continue to decrease by about 20% every year. The reduction in the scale of the LED chip and packaging industry reflects the fact that the actual market demand has saturated in this field, while the continued LED application market growth indicates a minimum of 20% increase in market demand.

China has become the world’s largest exporter of LED lighting fixtures. In addition, the Asia-Pacific (APAC) LED market, dominated by emerging economies, has developed significantly better than the European and American LED markets which are dominated by developed economies. On one hand, East Asia, West Asia, Southeast Asia, and Oceania markets are among those that are developing well in Asia-Pacific LED market. On the other hand, the South Asian market is greatly impacted by the recession in the Indian market, which accounts for more than 60%. Saudi Arabia, South Korea, and Thailand, as representatives of West Asia, East Asia, and Southeast Asia respectively, have achieved extraordinary high growth despite the negative impact from Covid-19, showing its vitality. Among EU and American LED markets, the North American market has been leading the recovery. The European LED market has suffered the most, with a decline of more than 10% in market size. Major European economies such as Germany, Britain, the Netherlands, and France have all suffered varying degrees of damage.

With the ongoing Covid-19 pandemic in 2021, the global LED industry is expected to benefit from the modest rebound of the upstream LED chip industry and the midstream packaging industry, as well as the strong development of the downstream application market.

The industry scale is estimated to reach 180 billion US dollars, with a YOY (year-over-year) increase of 8.2%. Among them, the LED chip industry is expected to reach $ 10.06 billion, with an increase of 4.3%; the packaging industry is expected to reach $ 16 billion, with a decrease of 5%; the LED product market is expected to reach $ 153.5 billion, with an increase of 10%.

When it comes to import and export, the demands for filament lamps (general lighting), display screens, plant lighting (landscape lighting) and other segments have increased, despite that the downward trend in LED light source prices has continued in 2020. In 2020, the LED products exported from China only from January through September totals $ 23.46 billion, with a YOY increase of 5.5%. It is estimated to achieve an annual growth of 3%. Among them, the export of UV LED lights for Covid-19 prevention reached $ 386 million, a YOY increase of more than 5 times.

Analyzing the market scenario of the LED industry, we see the three main characteristics:

Firstly, the industry has entered a stage of structural adjustment, and industrial concentration continues to rise. Small-and-medium-sized LED chip companies have compressed production capacity and even shutdowns, resulting in a decline in the demand for LED front-end equipment. In the midstream LED packaging field, small-and-medium-sized low-end LED packaging companies have been forced to shift towards customized light sources. In the downstream LED application field, the traditional general lighting field has been impacted by channel changes. Large companies with strong design capabilities, adequate channel resources, and big-name brand advantages have maintained growth against the trend, while it’ been  increasingly difficult for small-and-medium-sized companies to survive.

Secondly, continuous innovations in industrial technology and applications inspire market growth in the industry. With advancements in LED technology, the energy conversion efficiency of high-power white LED chips and silicon-based LED chips continues to improve, and large-scale manufacturing processes continue to make breakthroughs. A variety of high-quality, full-spectrum LED technology routes have emerged. LED general lighting tends to be high-quality and intelligent, which becomes value-added to general lighting and leads the growth of sub-sectors such as smart buildings, smart homes and smart street lights.

Thirdly, European and US LED markets have come close to saturation, while there is still strong momentum for market growth in Asia and Africa. Although European and US LED lighting markets have relatively more mature systems of lighting standards and more open markets, international cooperation is still dominated by the comeback customers of traditional lighting, and the market size has become saturated. In contrast, the LED markets in Southeastern Asia, Western Asia, Latin America, Southern Asia/Central Asia and Africa have gradually become the main destinations for LED lighting exports due to their government investment in semiconductor lighting infrastructure and low tariff policy advantages. Take the Middle East as an example, although emerging markets are more sensitive to the prices of LED lighting products due to economic development and needs for cost-effective products, they are more enthusiastic about infrastructure investment and holding world-class events as well as major events. The demand for LED product import is relatively strong.

The LED industry still faces bottlenecks that demand attention. The spread of Covid-19 has impacted the global LED market demand adversely, resulting in low willingness to invest and deterioration of corporate assets and liabilities. As LED light source prices continue to fall, top LED companies have been actively seeking new breakthroughs.

In 2021, it is vital for the LED industry to promote international communications and improve industry sustainability. Fundamental works include creating a public service platform for the LED industry, and facilitate technology and talent exchanges among enterprises. Follow-ups include implementing LED demonstration projects, supporting the application of innovative LED products, as well as promoting pilot projects of independent LED product applications in key fields, such as commercial displays and HDTVs (high-definition televisions). Furthermore, setting up a research & development fund for the LED industry will help leverage social capital to support the industrial growth.

The LED market is foretasted to hold a bright future in the next ten years.

As a veteran LED light manufacturer with more than 10 years of experience in the industry, IBRZ is committed to achieving its vision “Make quality products, shine the world, and go for win-win with customers” in 2021. The exceptional service and outstanding products will contribute to the development of the LED industry as a whole.