US LED Lighting Market Report: Ken Research

What is the Potential of the US LED Lighting Market?Lighting market was traditionally dominated by fluorescent tube lights (FTLs) and incandescent bulbs (ICLs) until a decade ago. The government of the US identified the glitches in the lighting sector and therefore started aggressively promoting energy efficient sources of lighting in the country. This led to the advent of Compact Fluorescent Lights (CFLs). With the advancements in technology, superior sources of lighting such as LEDs came into the market. Light Emitting Diodes (LEDs) are solid state semiconductor devices without mercury content being present in them. The manufacturing of LED lights is quite complex and requires raw materials such as LED chips, heat sink and thermal interface material.

Light-emitting diodes (LEDs) are semiconductor devices that convert electricity to light. LED lighting is also called solid state lighting because the light is emitted from a solid object, which is a block of semiconductor material rather than from a vacuum or gas tube, as in traditional incandescent or fluorescent lights. The market for LED lighting in the US expanded owing to the technological improvements and decreased cost of such lights overtime. Additionally, LED lights market witnessed increased demand overtime as such lights are long lasting, energy efficient, environment friendly and durable

The low voltage required by LEDs to emit lights made it a suitable lighting source for residential, commercial and industrial sectors of the US.The increased demand for LED lights is supplemented by the rising awareness among people towards the environmental issues. The growing concern among the population about the amount of heat emitted by traditional fluorescent lights has made them shift to more energy saving resources, thereby expanding the overall size of LED lighting market in the country. Over the past few years, the US government has been increasing its focus to replace traditional and less efficient lighting systems with highly energy efficient, environment friendly and cost effective LED technology.

Reduction in the price of LED has accelerated over the past few years. The considerable overcapacity of LED chips and packages has built up due to huge investment in LED chip/package production lines in China. The US government is focusing to shift people from the use of traditional fluorescent lights to the use of LED lights due to the reason that such lights are energy efficient and cost effective. The US Department of Energy invited manufacturers to participate in LED Lighting Facts Program, wherein they could display their products and showcase product testing procedures.

OSRAM is a top manufacturer of LED components, as is General Electric, under its Ohio-based subsidiary Lumination (formerly Gelcore). While these traditional lighting giants have so far played a leading role in the LED general lighting industry, they face competition from new LED lighting firms, especially in Japan, Taiwan, Korea, and other Asian countries.The revenues generated from the sale of LED lights in the US were evaluated at USD ~ million during 2013, inclining from USD ~ million during 2011. There was an increase in efforts from marketers and LED Vendors to shift people from regular modes of lighting to LED technology. Campaigns and advertisements witnessed a rise so as to make customers aware about the benefits of using LED lights in both residential and commercial sector.

The Retrofit program during the review period provided incentives to commercial businesses to save the upfront cost by installing light emitting diodes in their units. This program contributed ~% to the total savings of business programs. The sales of LED general purpose lighting is negligible from retail stores. Instead, LED distribution has occurred primarily through Internet sales and direct sales to businesses and builders. For example, Cree has made volume shipments to significant building projects including corporate campuses, hotels, and restaurants. These large businesses have managed to generate economics of LED-based lighting increasingly compelling, especially since much of their lighting is on most or all of the time, and frequent replacement of traditional bulbs is expensive.

Rising awareness for global warming made people switch to LED lights from the traditional use of fluorescent bulbs that emits heat and CFC. This augmented the growth of LED lighting market in the country. With the saturation of LED technology, there were innovative designs in the market which attracted people to use LED lights for decorative purposes, thereby boosting the retail sales of light emitting diodes in the US. Which LED Type is generating Maximum Revenue for the US LED Lighting Market?Lower initial cost and ease of installation of LED lamps have made LED lamps dominate the market contributing ~% of the revenue to the total revenues of US LED lighting market in 2016. LED lamps were traditionally used by residential sector, whereas lower cost of installation was one of the major factors behind its usage in commercial sector in the present scenario. Considered as short term lighting solutions, LED lamps are still the most familiar LED lights known to people due to their early acceptance than other LED technologies.

limitation of variety and ultra modern designs in LED lamps makes this segment witness a decrease in market share overtime.LED luminaires have been successful in driving the overall LED lighting market of the US by increasing their revenue share from ~% in 2014 to ~% in 2016. The designs offered in LED luminaires including troffers and downlights to be fixed in ceilings, add to the reasons for the increased sales of luminaires overtime. Despite being expensive then LED lamps, the modern concept of LED luminaires became popular with the modern techniques and the increased demand of the customers for new products in the LED market. The wider acceptability of LED luminaires for outdoor lighting solutions has made this segment increase its share in the recent past.

Which Types of Lamps and Luminaires Dominated the US LED Lighting Market?The traditional use of incandescent bulbs is being replaced by LED reflectors to a great extent, making this segment generate the maximum revenue among all types of LED lamps available in the US. LED reflectors contributed ~% to the revenues generated by from the sale of LED lamps in the US during 2016. The overall lighting market of the US, which was traditionally driven by the use of fluorescent tube lights, witnessed a change with LED tubes making a positive impact in the market, contributing ~% of the revenue to the total market for LED lamps in 2016.

The increasing use of LED downlights for both residential and commercial purposes has made this segment dominate the LED luminaires market with revenues of USD ~ million during 2016. The latest change of plastic troffers with metal grids to fix the LED lights attracted people towards the new designs of the perfectly fit frames, thereby helping this segment generate revenue of ~% to the total revenue of luminaires in 2016. Other luminaires contributed ~% to the revenue from sales of LED luminaires in 2016.which is the Most Acceptable LED Light in the US?The increased demand for directional LEDs by shopping malls to showcase their products and their use in flood lights, made this segment dominate the LED market with revenue share of ~% in the overall sales of LED lights in the US.

The overall lighting market in the US has evolved with the acceptance of A-Type LEDs over standard fluorescent bulbs. A-Type LEDs generated revenues worth USD ~ million in the LED lighting market of the country. Varied sizes from a foot to 8 feet as per the use and the advantage of being considered as the long life lighting source added to their total sales, thus making LED linear fixtures mark revenue of ~% in 2016. The distinguishing feature of color tunability to match the building architecture made them an ideal choice for both residential and commercial sectors, making this segment contribute ~% of the revenue in 2016.

Decorative lamps and luminaires have been significant by their use in commercial and residential sectors of the US over the recent past. Freedom of designs along with saving energy has made this segment more popular over regular CFLs which are not suited for decorative purposes. The low height of ceilings in parking garages demanded LEDs with control systems to emit lights in large area. LEDs used in parking garages contributed ~% to the revenues of LED lights market in the US. LEDs used in luminaires installed on roads solve the issue of visibility for drivers and also illuminate outdoor pedestrian walkways.

Durability and their excellence in directional light sources have made Roadways LEDs generate revenue of USD ~ Million in 2016. Small directional LED lights are usually installed in limited qualities to emit lights that can act as a path for the people. For instance, these LEDs are commonly used in auditoriums and theatres in Exit boards and along the pathway to show walking directions to the people. The revenue contribution of such lights in the overall LED lighting market of the country inclined to USD ~ million in 2016 from ~ million in 2014. Improvement in light utilization is the distinguishing feature provided by parking lot LEDs to the users which has made this segment generates 2% of the revenue in 2016. High and Low Bay LED lights contributed ~% revenue to the total revenue earned by sales of LED lights in 2016.

Which Among Various Types of Indoor LEDs and Outdoor LEDs is Mostly Used?The demand for LED lights increased in the commercial and industrial sector as these consumers are typically concerned with the lifetime cost associated with the lighting product. LED lights being more efficient and long lasting cater well to the customers in this sector. The increasing awareness about energy saving resources in the US further boosted the demand of residential sector for indoor LED lights, making this segment contribute USD ~ Million to the total revenue earned by the sales of LED lights in the country. Consisting of parking lightings, area and roadway lightings, exterior building lightings and other open area lightings, outdoor LED lights serve the propose of creating a sense of personal security by illuminating larger areas.

Outdoor LED lights are considered important for the fact that they help in attracting people towards a particular space and this distinguishing feature to emit more light in open places is the major reason responsible behind generating ~% of the revenue in the overall LED lighting market of the US. Litom Solar Lights Bright, Dusk-to-Dawn LED, Solar Motion Sensor LED, LED Barn Light and Barbecue Grill Light are the top selling LED lights in the US which are typically used for street and area lighting.Which is the Most Preferred Distribution Channel in the US LED Lighting Market?The rising demand for LED lights in the US has been a major reason responsible behind the wide network of electrical wholesalers which caters to the requirements of residential, commercial and industrial sectors across the country. Electrical wholesalers have an approximate margin of ~% on the sales of LEDs. Home center contributed ~% to the revenues generated by different channels from the sales of LED lights in the country in 2016.

ESCO conducts energy saving programs to create awareness among the people about the benefits of shifting to energy efficient techniques, which has made this segment contribute USD ~ million to the revenues of during 2016. The sale of LED lights from utilities generated USD ~ Million in 2016. Lighting showrooms are the most accepted retail channel by the household segment of the US and thus the growing residential sector has made them contribute ~% to the total revenues from various channels of LED lighting sales in the country in 2016. Direct Sales of LED lights by the manufacturers to the customers generated USD ~ Million in 2016.What is the Cost Composition in the US LED Lighting Market?The production of an LED light involves the use of various components. All these components including LED chips, drivers, heat sinks and related parts contribute to the cost of LED light manufactured in the plant. Mechanical, thermal and electrical charges occupy majority share of cost irrespective of the type of LED lamp manufactured. The cost of LED package directly depends upon the size of LED lamp to be packed. Packaging cost thus varies with each type and model of LED light produced.

What is the State of Competition in the US LED Lighting Market?US LED lighting market is highly concentrated with the presence of few leading lighting manufacturers in the country. Since the sector requires large amount of capital to be invested, this has inhibited the emergence of several companies in the space. Lighting products segment currently faces competition from traditional lighting fixture companies, lamp manufacturers and from nontraditional companies focused on LED lighting systems including fixtures and lamps. Lighting companies such as Cree, Acuity brands, Copper Lighting division of Eaton Corporation, general electric company, Hubbell Incorporated, Philips and Osram are the major competitors in the market. Apart from this, there are also small and medium sized lighting companies.

LED Lighting products compete against traditional lighting products in US such as incandescent, halogen, ceramic metal halide, high pressure sodium and other lighting technologies. These products are competed against superior energy savings, extended life, improved lighting quality and lower cost of ownership. Nichia is the leading company in US for Nitrite based LED chips. Apart from Nichia, there are several other LED chip manufacturer such as Osram, Toyoda Gosei, Epistar Corporation, Sanan Optoelectronics and others. The companies in this segment operate on the basis of performance, price and strength of intellectual property. Some of the major companies which are operating in US LED components market are Nichia, OSRAM, Lumileds Holdings, Samsung and others. The companies apart from brand image compete on the basis of performance, price and usability.

what is the Future Outlook for the US LED Lighting Market?LED lighting market in the US is expected to increase with a CAGR of ~% in between 2017 and 2019 in terms of revenue due to elevating demand for energy saving electrical products and appliances in the country. The increasing awareness towards environmental issues caused by the radiations and heat emitted by traditional lighting technologies will make more people shift to LED lights from fluorescent lights, thereby expanding the overall LED lighting market of the US. Advances in production improved efficiency and light output of commercial LED lights, while lowering costs. The LEDs produced today are over twice as efficient as some produced only five years ago. This trend will continue and LED efficacy will go up as production costs go down. This rapidly developing field not only brings new technology to consumers but also brings new producers to the technology.

US LED lighting market revenue is expected to grow at a rapid pace with a significant from 2019 to 2021 owing to the rising number of players entering the LED lighting industry and efforts of the Government to shift people to energy saving technologies. In long term, the LED lighting market will witness innovative products being introduced which will lead to an increase in demand by the population, thus making the LED industry contribute a larger share to the total economy of the country.LED lighting manufacturers would expand in size and number, offering more products to customers, along with providing awareness about the low cost benefits that will act as the drivers for increase in customers purchasing LED lights. More companies getting them registered with Energy Star will fuel the growth of LED lights in the US.

Within the next three years, it is believed that commercial LED efficacy pass the ~ lumens per watt mark. This level of efficiency, especially when compared to the ~ lumens per watt attained with incandescent bulbs, shows that the future for solid state lighting is certainly bright. In terms of type of LED, LED directional lights will continue to dominate the market due to the rising demand for spotlights and multi-directional lights by the residential and growing commercial sector in the US. The growing commercial sector which highly relies on the use of directional LEDs for various purposes will augment the growth of such lights during the outlook period. The revenues for A-Type LED bulbs will increase overtime due to the simplicity of installation and the low cost of such lights over other LED lights available in the market. Infrastructural developments in the US will lead to increasing demand for building exterior LED lights over other LEDs used for outdoor purposes.

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