The LED-market is a fast-moving one, and with the pace in technology also comes innovation. If we move on to assess – How much is the LED market worth? What are the components that form an integral part of the market? A research carried out by Grand View Research tells us that the global LED chips market is anticipated to grow significantly over the forecast period. The report said that LED chips are used in various industries and a large number of applications. For instance: They are used for illumination purposes, and the resultant bulbs are more efficient as compared to conventional incandescent bulbs. LED-chip based bulbs also help reduce electricity bills, thus saving costs in the long run. This, the report asserted will contribute to market growth as we are in an increasingly energy-conscious environment.

Cover Story Meghana Shetty, Co Founder Pg 15
Meghana Shetty, Co-founder, smstudio

Meghana Shetty, Co-founder, smstudio – An architectural and interior firm, while giving us an overview of the lighting and LED market in India. She said: “The Indian lighting industry is evolving rapidly due to the shift from conventional bulbs to LEDs and the move is driven by the many moves taken by the government. The evolution indicates a tectonic shift in technology from electrical to electronics and this represents a significant growth in opportunities for companies offering electronic hardware/ components, products and solutions used in LED lighting.” Adding, she said that India is the second-most populous country in the world and yet, it is only the fifth-largest electricity consumer – a situation that has led to a widening demand-supply gap. “Consequently, the market for energy-efficient products such as LED lighting is bound to grow, riding on the initiatives that encourage the use of LED lights – the focus on smart city projects, an efficient public distribution system and the ever-increasing need for a smart, connected lifestyle,” she added.

Dinesh Aggarwal, Joint Managing Director, Panasonic Pg 11
Dinesh Aggarwal, Joint Managing Director, Panasonic Life Solutions India Pvt. Ltd

Dinesh Aggarwal, Joint Managing Director, Panasonic Life Solutions India Pvt. Ltd assessed the lighting industry from a holistic viewpoint. He said: “The total lighting market and worth stands close to INR 20 Cr. The market is evolving and moving towards complete LEDification. Currently, LED Lighting products hold 70% of the market share. With continuous force on cost due to the lack of high-standard products, every company is driving its strategies in terms of wattages, Efficacy, and Product Design. Right now, the market is more specification driven rather a product-driven. The outdoor lighting market is driven by the development in infrastructure, smart cities and other development initiatives.” At Panasonic Life Solutions, he added, we are offering a complete range of energy-efficient and smart lighting products, right from Indoor Commercial, Industrial, Outdoor, Retail, and Hospitality segment.

Shetty added and said: “According to a report from TechSci (A global research-based consulting firm), the LED lighting market in India is projected to register a CAGR of over 24 per cent during 2016-2021. The Indian LED lighting market stood at US$ 918.70 million in 2016 and is projected to grow at a CAGR of 24.66 per cent, in value terms, to reach US$ 3.76 billion by 2022, on account of increasing government initiatives to boost LED adoption and growing awareness regarding lower power consumption of LED lighting products. Moreover, easy availability at low prices, coupled with the distribution of LED bulbs by the Indian Government at affordable rates is augmenting demand.”

Reports also suggest that other segments of LED, such as backlighting is expected to be a fast-growing application within the LED chip segment over the next few years, and this trend can mostly be attributed to the shift to LED-backlighting for television sets since they improve picture quality and brightness. Also, the reports suggest that the market for blue LED chips is also expected to grow at a fast pace as compared to the global average – mainly on account of their application in backlighting and illumination.

New product innovation a key growth strategy

In comparison, red LED chips are used in automotive for rear lamps as well as for traffic signals. The other segment includes yellow, ultraviolet LED, and infrared chips. The Asia Pacific is expected to be the major contributor to revenue, and account for the largest market share during the forecast period, primarily due to a large number of industry participants in the region. New product development innovation is the key growth strategy, and major manufacturers include Cree, Epistar Corporation, Hitachi Cable, Seoul Semiconductors, and Bright LED Electronics Corporation among others.

Another report conducted by Reports Monitor suggests that the smart lighting market is estimated to grow from USD 13.4 billion in 2020, and is projected to reach USD 30.6 billion by the year 2025, at a CAGR of 18.0%. The major factors driving the growth of the market include the advent of integrated lighting control systems, upcoming smart city projects and the integration of lighting solutions and smart devices. Also, the Power over Ethernet (PoE) wired communication technology market is expected to grow at the highest CAGR during the forecast period. The growth of the PoE protocol segment is driven by factors such as increasing penetration and decreasing cost of LEDs, growing adoption of PoE lighting solutions in commercial and healthcare applications, and rising need for cost-effective lighting solutions.

Shetty does agree that there are factors which could cause a trend and influence demand for LED applications. She said: “The key factors that are expected to boost the market include declining LED prices coupled with favourable government initiatives that provide LED lights at a subsidised cost and promote LED street lighting projects through a special energy services company (ESCO) model created by EESL. Moreover, apart from rising consumer awareness about the cost-effectiveness of LEDs, their enhanced life, energy-efficiency and eco-friendly nature will continue to drive volume sales from the industrial, residential and commercial sectors.” Also, she said that retrofit installations are in demand across all kinds of applications.

The Impact of COVID-19 on the Market Trajectory

A research conducted by Markets and Markets suggests that post the COVID-19 situation, the smart lighting market size is estimated to grow from USD 9.4 billion in 2020 and projected to reach USD 24.2 billion by 2025, at a CAGR of 20.9%. The projection for 2025 is estimated to be down by 21% as compared to pre-COVID-19 estimation. The research highlighted the major factors driving this growth and mentioned that the speciality lighting applications, such as horticulture and UV disinfection lighting, the need for a large number of healthcare facilities to treat an increasing number of patients, and rising demand for sterile manufacturing areas in the pharmaceuticals industry, will influence this demand. Also, the hardware segment is affected owing to the loss in production and manufacturing units across the globe.

Some of the major global players in the smart lighting market are Signify (Philips Lighting) (Netherlands), Legrand S.A. (France), Acuity Brands, Inc. (US), General Electric Company (US), OSRAM Licht (Germany), Zumtobel Group (Austria), Hubbell Incorporated (US), Dialight PLC (UK), Ideal Industries, Inc. (Cree) and Schneider Electric (France) among others. The report indicated that Signify Holding (Netherlands) is an industry leader in the smart lighting market space. The report said that the company has a huge advantage over its competitors in the smart lighting market due to is its extensive product portfolio, with lighting systems compatible with various connecting technologies ranging from DALI, KNX, and BACnet to ZigBee and EnOcean.

Overall, the smart lighting market is estimated to grow from USD 13.4 billion in 2020 and projected to reach USD 30.6 billion by 2025, at a CAGR of 18.0%. The major factors driving the growth of the market include the advent of integrated lighting control systems, upcoming smart city projects in developing economies, increasing adoption and decreasing cost of LEDs, integration of lighting solutions with smart devices, and growing awareness about energy savings among consumers and governments worldwide.