Global Manufacturing Trends · Market research and consulting firm - founded in 1979 Long history of market research ... LG Innotek 5. Seoul Semiconductors . 6. Philips Lumileds Cree

LED Lighting

By Vrinda Bhandarkar

Strategies Unlimited June 13, 2012

--Global Manufacturing Trends

© 2012 Strategies Unlimited 2

Outline

• About Strategies Unlimited • Lighting Industry • LED Packaging • LED Lighting • Outlook

June13, 2012


About Strategies Unlimited

Market research and consulting firm - founded in 1979 Long history of market research

photovoltaics, compound semiconductor materials and devices, image sensors and lasers

Have followed the LED market since 1994 Reports on

overall HB LED market (annual), LEDs in lighting (annual), LED luminaire market, LED driver ICs, and LED replacement lamp market LED outdoor lighting market

Annual LED industry conference, Strategies in Light, since 2000

Acquired by PennWell Corporation in 2001

June13, 2012


About PennWell

June13, 2012

Connecting you with your target audience through industry intelligence in print, online and face-to-face events


Outline


June13, 2012

Lighting Industry

June13, 2012

• Lamps—Light source – Technologies include Incandescent, Halogen, Compact fluorescence(CFL), Linear

Fluorescent Tubes(LFT), High Intensity Discharge(HID) includes, Mercury Vapor(MV), Low Pressure Sodium (LPS), High Pressure Sodium(HPS), Metal Halide and Ceramic Metal Halide, Induction, and LED

• Fixtures- does not include the light source

• Ballasts – Power Management

• Luminaires – Light Source + Fixture

– New nomenclature for SSL – Convergence of light sources, ballasts and fixtures

• Controls – Lighting system controls including Dimmers, Color dials,

Mood Lighting, Wall plug controls, facility wide lighting controls, wi-fi, radio and internet controls


US Lighting Industry

June13, 2012

-

1,000

2,000

3,000

4,000

5,000

6,000

2005 2006 2007 2008 2009 2010

Reve

nues

in $

Mill

ions

Electric Lamp Bulb and Part Manufacturing

Residential Electric Lighting Fixture Manufacturing

Commercial, Industrial, and Institutional Electric Lighting Fixture Manufacturing

Other Lighting Equipment Manufacturing

Source: Bureau of Economic Affairs


US Market for Lighting

June13, 2012

$19,252

-

5,000

10,000

15,000

20,000

25,000

2005 2006 2007 2008 2009 2010 2011

$ m

illio

ns

US Market ( $ Millions)

Industry Shipments for NAIC 3351 Imports Exports US Market=Industry shipments+Imports-Exports

Source: International Trade Administration, Department of Commerce, U.S. Bureau of Economic Analysis


Estimated Inventory of Lamps in the U.S

Residential 71%

Commercial 25%

Industrial 2%

Outdoor 2%

June13, 2012

By End-Use Sector

Incandescent, 45.1% Halogen,

3.8%

Compact Fluorescent,

18.9%

Linear Fluorescent,

29.1%

High Intensity

Discharge, 1.7%

Other, 1.4%

By Light Source Technology

Total: 8.2 Billion Lamps

Source: 2010 U.S. Lighting Market Characterization, DOE


Lumen Output & Energy Used

June13, 2012

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Residential

Commercial

Industrial

Outdoor

All Sectors Incandescent

Halogen

Compact Fluorescent

Linear Fluorescent

High Intensity Discharge

Other

By Lumen Output

By Energy Used


0% 20% 40% 60% 80% 100%

Residential

Commercial

Industrial

Outdoor

All Sectors Incandescent

Halogen

Compact Fluorescent

Linear Fluorescent


Energy Used by Lamp Type in US

June13, 2012

0%

10%

20%

30%

40%

50%

60%

Incand. Halogen CFL LFT HID Other

Energy Used No. Of Lamps



Average Lighting Efficacies in US

June13, 2012

0

10

20

30

40

50

60

70

80

residential commercial industrial outdoor

lum

ens/

Wat

t

2001 2010

37% 12%



More Changes Expected…

• Incandescence under pressure to improve efficiencies

June13, 2012

• Prices of fluorescent phosphors are increasing and supply is limited, 2011 saw lamp price increase-10-25%

• High efficiency standards for ballasts for fluorescence as well as metal halide light sources

2010 2012 2014 2016 2018 2020

100W

75W

60W

40W US EISA 2007

Selected Countries

Lamp Manufacturing

June13, 2012

• Mass Commodity Market - High volume, low margin - Manufacturing scaled to reduce cost - China is largest manufacturer with established

supply chain - India, Bangladesh, Vietnam increasingly

participating in manufacturing - Some specialty lamp manufacturing scattered in

industrialized countries • Few large players dominate

- Philips, GE, Osram, Sylvania, Toshiba • Many medium scale companies with

manufacturing in China—TCP, Satco, Feit


Fixtures

• Fragmented manufacturing, – now mostly in China

• Large scale manufacturing of commercial lighting fixtures

• Large number of product types-SKU • Access to channels key competitive

requirement for introducing new products • Dependent on customer service—either

offered by distributors or manufacturers representatives

June13, 2012


Outline


June13, 2012


LED Applications-Market Segments

June13, 2012

Mobile Signs

Lighting Automotive TV/Monitor Display

http://www.spectral-online.de./~~~~~~~~~~~~~~~~1030


LED Packages 2009-2011

June13, 2012

$0

$2

$4

$6

$8

$10

$12

$14

2009 2010 2011

$5.4

$11.2 $12.5

Reve

nue

in $

Bill

ion


Market for LED Packages

June13, 2012

Source: Strategies Unlimited

Backlight TV/Monitor,

24%

Mobile, 23%

Sign, 11% Lighting, 16%

Auto, 9%

Others, 17%

2011 Market= US$12.5B


LEDs in Lighting

June13, 2012

0

500

1000

1500

2000

2500

3000

3500

2010 2011 2012 2013 2014 2015 2016

Reve

nues

in $

Mill

ions

Commercial/Industrial Replacement Lamps Architectural Retail Display Outdoor Area Consumer Portable Entertainment Residential Emergency Lighting Off-grid

46%

2011 Worldwide Supplier Ranking

©2012 Strategies Unlimited February 7-9,2012

EFShum Page 21

Japan30%

Korea26%

Taiwan/SE Asia19%

China6%

US/Europe19%

1. Nichia 2. Samsung LED 3. Osram Opto 4. LG Innotek 5. Seoul Semiconductors 6. Philips Lumileds Cree 7. Sharp 8. TG 9. Everlight


Billion $ Club

68%

2011 Market

US$12.5B


LED Industry-2011

– Slower than expected penetration in TV and Display market led to overcapacity in manufacturing and packaging LEDs in Taiwan and Korea

– Subsidies in China increased manufacturing capacity

– Attrition and consolidation has started in China

– It is expected to take 2 to 3 years before the overcapacity is worked out

June13, 2012


LED Performance

$/kilolumen

$/ kilolumen for 2700 K per 1 W package $ 8.50

$/kilolumen for 3000 K per 1 W package $ 7.50

$/ kilolumen for 3000 K - 4000K per 1 W package $ 5.00

$/ kilolumen for 4000 K and up per 1W package $ 4.50

Price $/kilolumen for 1W High-Power LED with CRI: > 75 2011

$302

$231

$185

$140

$101 $77

$48 $32 $22 $16 $13 $6 $5

$-

$50

$100

$150

$200

$250

$300

$350 Source: Strategies Unlimited

15 20 25 33 40 47

75

93 102

130 132 139

160

34 40

58 61

78 84

109 117

150

0

20

40

60

80

100

120

140

160

180

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

lm/W

Cool White Warm White

Best Commercially available efficacies for 1W chip 2000-2011 2012 values represent multichip packages


June13, 2012


Lumens/Watt


Trends in LED Packaging

• LED Count dropping fast • Prices dropping even faster

– 35% to 45% reduction in prices of LED chips in 2011 – 30-35% decline in prices of LED packages – Price of low end products declined faster than the high end

• Major growth in the use Low & Mid power LED for

ambient lighting applications • Koreans and Taiwanese have excess capacity to package

mid-power and low power LEDs • Increasing use of Multichip Arrays/COB for lighting

applications • All major suppliers offer multi-chip/COB/ arrays • Prices of mid-power and low power dropped the fastest


Outline


June13, 2012


LED Lighting Market Segmentation

LED Lighting Market

Luminaires

Replacement Lamps

June13, 2012



LED Lighting Market

Luminaires

Replacement Lamps

A19 /Standard

PARS

MR16

Candelabras /Globes/

Decorative

L F T

June13, 2012



LED Lighting Market

Luminaires

Architectural

Entertainment

Retail display

Residential

Commercial /Industrial

Consumer Portable

Safety & Security

Outdoor

Off-grid /(Solar Powered)

Replacement Lamps

June13, 2012


June13, 2012


2010 Rev : $5.5 B

Off-Grid 2%

Entertainment 3%

Emergency 6%

Outdoor Roadway/

Area 6%

Retail Display 4%

Residential 7%

Consumer Portable

20%

Replacement Lamp 15%

Architectural 18%

Commercial/Industrial

19%

2011 Rev: $9.9B

Entertainment 3%

Off-Grid 3%

Residential 4%

Safety & Security 5%

Retail Display 6%

Outdoor Area Lighting

6% Consumer Portable

12%

Architectural 16%

Commercial/Industrial 22%

Replacement Lamps 23%


LED Lighting

June13, 2012


Outline


June13, 2012


Looking Ahead

June13, 2012

Total cost -28% LED -35% Mechanical / Thermal -20%

Driver -24% Optics -17%

CAGR 2010-2015

Based on calculations for downlights in the DOE SSL 2011 Manufacturing Roadmap

2010 Total Cost Index=100

2015 Total Cost Index=20 LED, 50

Mechnical /Thermal,

15

Driver, 20

Optics, 10

Assembly, 5

LED, 6

Mechnical /Thermal,

5

Driver, 5

Optics, 4

Assembly, 0


LED Lighting Market Forecast 2011-2016

June13, 2012

-

5,000

10,000

15,000

20,000

25,000

2010 2011 2012 2013 2014 2015 2016

Replacement Lamps Safety & Security Consumer Portable Residential Off-Grid Outdoor Area Lighting Commercial/Industrial Retail Display Entertainment Architectural

71%

Reve

nues

in M

illio

ns


Targets for LED Lamps in the U.S

Residential 71%

Commercial 25%

Industrial 2%

Outdoor 2%

June13, 2012

By End-Use Sector

Incandescent, 45.1% Halogen,

3.8%

Compact Fluorescent,

18.9%

Linear Fluorescent,

29.1%

High Intensity

Discharge, 1.7%

Other, 1.4%

By Light Source Technology

Total: 8.2 Billion Lamps


Residential Sockets Average Lamp Distribution in Residences in US

0% 20% 40% 60% 80%

Others LFT CFL

Incan+Halogen

By Room Type

0% 50% 100%

Garage

Basement

Laundry / Utility Room

Kitchen

Other

Closet

Office

Living / Family Room

Bedroom

Exterior

Hall

Bathroom

Dining Room

Incandescent

CFL

LFT

Other

June13, 2012

Incandescent +Halogen 66%

CFL 23%

Linear Fluorescent Tubes 10%

Others 1%

Source: 2010 U.S. Lighting Market Characterization


LED Lamp Market

June13, 2012

Large scale adoption

Commoditization

Energy savings

Rebates, incentives

-Majority residential -Sold through retail channels -Lower value placed on cost of maintenance and extended life -Most lamps used only for a short time in a day -The perceived payback period should be less than one year (CFL experience !) -Rebates subsidies need prices associated with commoditization

Dimensions of Consumers’ Perceived Value Price/value for money Emotional Social, quality/performance


Perceptions

How much of a difference do you think the actions of individuals like yourself can make when it comes to solving the country’s energy problems? Can your actions make…….

– A very large/large difference 41% – A moderate difference 28% – Small or no difference 31%

Source :Conducted by The Associated Press-NORC Center for Public Affairs Research Interview dates: March 29 – April 25, 2012

June13, 2012


CFL Market

June13, 2012

Source : NEMA


Electricity Used

June13, 2012

Source: European Environment Agency

Per Capita Energy Use in 2008 By Region

Price of Electricity


Replacement Lamp

June13, 2012

-

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

2010 2011 2012 2013 2014 2015 2016

Rev

enue

$ M

illio

n

Revenue CAGR 2011-2016 11%

30% 29%

44%

18%

15%

19%

27%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

North America

Europe China South Korea

Japan South East Asia

ROW

CAGR of Units 2011-16 By Region




Opportunities in Commercial

June13, 2012

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Building Type

Commercial Sector: Lamp Distribution by Commercial Building Type in 2010

Other

HID

Linear Fluorescent

CFL

Halogen

Incandescent



Commercial & Outdoor

June13, 2012

0

10

20

30

40

50

60

70

80

residential commercial industrial outdoor

lum

ens/

Wat

t

2001 2010

37% 12%



Luminaires

Not yet Commoditized! • Rethinking about use of light, cost of light • Disruptive Technology • Premature standardization can lead to suboptimal

use of technology • Time to work out form factors that can be

standardized • Trade off between quality and cost

to the individual, to the society

– Potential to offer quantity, quality and control over light

June13, 2012


LED Luminaire Revenue Forecast

June13, 2012

-

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

2011 2012 2013 2014 2015 2016

Reve

nues

in U

S $

Mill

ions


Growth Markets for LED Lighting

• Retrofit market in OECD countries • New Construction in Emerging Economies

– Population growth – Urbanization – Rise of new middle class – Increasing ranks of the rich*

*Upper Middle class spending in China as a percentage of luxury-goods market

– 12 % in 2010 – 22% in 2015

Source: McKinsey

June13, 2012


Luminaire vs Replacement Lamp

June13, 2012

-

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

2011 2012 2013 2014 2015 2016

Reve

nues

in U

S $

Mill

ions


Regulatory Outlook

Standards setting is moving rapidly, – consistency between regions-IEA-4E-Harmonization of Standards—a Global

effort

Standardization of product interfaces —drivers, dimmers, controls –Zhaga

Many countries now recognize the importance of standards including China, and India

– S DOE Efforts to set standards and CALiPER testing has far reaching global influence

Europe: - CELMA-Optical Safety, Color Quality and other standards - ErP Directive (Ecodesign Requirements for Energy-related Product, Directive

2009/125/EC) –will be reviewed in 2014 - 20-20-20 target for EU - Carbon Reduction Commitments (CRC) in UK

ASHRAE Releases 90.1-2010

June13, 2012


GDP Growth rates

-10

-5

0

5

10

15

2009 2010 2011e 2012f 2013f GDP

Gro

wth

Rat

e (%

)

World

High income

Euro Area

Developing countries

China

Russia

Turkey

India Source: World Bank

June13, 2012


Urbanization

June13, 2012

Distribution of the world urban and rural population by major area

Source: United Nations, Department of Economic and Social Affairs, Population Division: World Urbanization Prospects, the 2011 Revision. New York, 2012


Urbanization

June13, 2012


China—a closer look at the market • LED lighting revenues in 2011 are estimated to be 34% of the total

market • The 12th Five Year Plan includes subsidies for LED lighting products-

mostly LED replacement tubes and lamps • Mining, manufacturing, converted to LED • Very enthusiastic user of LED building decoration lights • The 21-city program installed hundreds of thousands of streetlights • LED is identified as the next generation energy efficient technology • China has more building space than any other country in the world • Urbanization:

– In 2010, 53% of the population lived in rural areas. In 2011, 21 million people moved to the cities. By 2012 majority (> 50%) of the people lived in urban areas. In the next 20 years 75% of the population is expected to live in urban areas.

• New Public Housing units – 10 million in 2011 – 7 million in 2012

June13, 2012


China—a closer look at the industry

• GGLED estimates about 60% of global LED products in all applications are manufactured in China

• There are over 4000 enterprises –mostly small – About 13% are only tube manufacturers, 10% manufacture only bulbs

• Active IPO scene – 2010: Nationstar Optoelectronics Co., Ltd. and Changelight Co., Ltd. – 2012: Shenzhen Mason Technologies Co., Ltd. (SMT), MLS Co., Ltd.,

MOSO Switching Co., Ltd., Ningbo Hualong Electronics Co., Ltd., Click Technology Ltd., Kennede Electronic Mfg. Co., Ltd., Ocean’s King Lighting Co., Ltd., Shenzhen Chang Fang Semiconductor Light Co., Ltd., and Shenzhen Jufei Optoelectronic Co., Ltd

• IPOs of Chinese companies outside China: – China Intelligent Lighting – TCP filed for IPO in April 2012 (Revenue: $281 million in 2011)

• Recent Bankruptcies: JDL Enterprise Group, Bolunte Optoelectronics Technology Co., Ltd. of Shenzhen

June13, 2012


New Applications

June13, 2012

Source: Hera

Source: C3 Continental Case Lighting

Source: Bosch Appliances


New Applications

June13, 2012

Source: Grupo MCI Mundocolor Iluminación Técnica y Mundolighting


Thank you

Questions? Vrinda Bhandarkar [email protected] www.strategies-u.com

June13, 2012

mailto:[email protected]



Documents

Global Manufacturing Trends · Market research and consulting firm - founded in 1979 Long history of market research ... LG Innotek 5. Seoul Semiconductors . 6. Philips Lumileds Cree