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Exploring the Development of the LED Industry in 2013: Optimistic about the LED Backlight and Lighting Market
Aug 01,2013
The LED industry has been widely applied in markets such as mobile phones and displays since 2005. In 2008, it was catalyzed by the backlight application of NoteBook-mini, quickly entering various backlight application fields such as NB, Monitor, TV, etc., accelerating the rapid growth of the LED industry scale, while also accelerating technological progress and price decline, making it possible for LEDs to enter the lighting field. Especially in 2011, influenced by the European economic environment, the prices of various LED products dropped even faster, gradually approaching the prices of traditional lighting products, accelerating the application of LEDs in the lighting field.
In the future, the penetration of various backlights will continue to increase, especially in the areas of medium and large-sized backlight Monitors, TVs, and emerging fields like Pads, where penetration and quantity will maintain a high growth rate. In the lighting field, with the gradual improvement of scale and industry support, the overall efficiency of LEDs will improve, and the terminal prices of LED lighting products will continue to decline, with the penetration speed also accelerating. The overall output value scale of the LED industry will continue to grow.
It is expected that the LED backlight market will still be a significant contributor in 2013.
From the terminal perspective, the growth capacity of the backlight application field in 2013 mainly comes from TVs and Pads. The driving factors for TV growth include the following aspects: first, the continuous penetration in the backlight field; according to relevant research institutions, the penetration ratio is expected to increase from about 70% in 2012 to over 90% in 2013; second, the shipment proportion of medium and large-sized terminals will continue to increase, with an expected growth rate of 5%-10% in 2013, likely approaching 10%; third, from the perspective of emerging markets, including China, the expected growth in emerging markets is about 15%, showing that the market growth in emerging regions is the main driving force. Fourth, with changes in consumer habits, the average size of TVs is increasing; research shows that the average size of TVs has grown from 34.5 inches (diagonal) in 2011 to an expected 36.5 inches (diagonal) in 2013. As the size increases, the number of LEDs used will also increase, thus effectively offsetting the reduction in the number of LEDs used due to technological improvements.
Overall, the increase in penetration rate, high growth in regional markets, coupled with the localization of the backlight procurement ratio driven by the domestic panel industry in mainland China, is expected to result in a 30%-40% growth rate in the mainland China LED backlight market in 2013, with the potential to reach 40% growth due to policy stimulation.
The lighting market is expected to have a good continuation in 2013.
Looking at the overall lighting application market, the average annual growth rate from 2011 to 2016 is 20%, mainly including alternative lighting, architectural lighting, retail lighting, commercial lighting, entertainment lighting, safety lighting, raster lighting, portable lighting, residential lighting, and outdoor lighting. Among these, alternative lighting, architectural lighting, retail lighting, and commercial lighting are expected to grow faster than the industry average growth rate, with a compound annual growth rate of over 20% from 2011 to 2016. The average annual growth rates for retail lighting, commercial lighting, and architectural lighting are 48%, 23%, and 27%, respectively. In terms of market share, commercial lighting accounted for the largest share in 2012, about 30-40%, followed by architectural lighting, portable lighting, and alternative lighting, which are expected to account for 10%-20%. It is expected that commercial lighting will still be the largest in 2013, maintaining a share of 30-40%, while other lighting fields will see some changes, but overall, the changes will not be significant. From 2014 to 2015, with the improvement of LED technology and the continuous decline in prices, the application ratio of LEDs is expected to change, but the main application areas will not see significant changes.
It is expected that policies will still be a major driving factor in 2013.
Globally, the phase-out of incandescent bulbs has entered a critical period. Since 2012-2013, 60-75W incandescent bulbs have entered an accelerated phase-out stage, with the impact factors far greater than those for bulbs above 75W (40-75W is expected to account for about 70% of incandescent bulbs). Additionally, due to the impact of the 311 earthquake in Japan, the global process of nuclear disarmament has accelerated the phase-out of incandescent bulbs and the replacement with new light sources. In terms of timing, in 2013, major countries and regions will prohibit the phase-out of 75W, 60W, and 40W incandescent bulbs. In terms of coverage, the United States, Canada, Mexico, Brazil, Argentina, the United Kingdom, Australia, the European Union, Japan, South Korea, and China have all entered the prohibition and phase-out period for incandescent bulbs. This will greatly stimulate the replacement and use of new light sources, accelerating the promotion and use of LED lighting.
From the perspective of LED development plans in various countries, the United States, the European Union, South Korea, Japan, and China have all proposed timelines for the replacement rate of LED lighting products. Among them, South Korea and Japan are particularly proactive. South Korea proposed that by 2012, the government office lighting LED replacement rate would be 30%, and by 2015, ensure that LED lighting products enter 30% of the general lighting market. Japan proposed that by 2015, the LED lighting replacement rate would be 50%, by 2020, 100%, and by 2030, the usage rate of LED lighting would be 100%. After experiencing product promotion, certification, and gradual correction and improvement of standards from 2010 to 2012, 2013 will enter a critical period, and policy promotion will be a strong guarantee for achieving the 2015 goals.
In mainland China, since the release of the "Roadmap for the Gradual Phase-out of Incandescent Bulbs in China" consultation draft in October 2011, the National Development and Reform Commission issued a notice in November regarding the organization of the 2012 annual financial subsidy for the promotion of the semiconductor lighting industry. In May 2012, the State Council proposed energy-saving appliance subsidies in the "12th Five-Year Plan for the National Basic Service System," mainly targeting televisions and lighting products, with 2.2 billion yuan mainly for lighting product subsidies. At the provincial and municipal levels, regions such as Guangdong, Anhui, Jiangxi, Henan, and Shandong have relevant plans, aiming to increase investment in various aspects of LED and promote and implement lighting applications during the 12th Five-Year Plan period, which is expected to drive the market scale in various regions to exceed 10 billion yuan. At the local level, nearly 30 cities have introduced relevant promotion and subsidy plans, mainly accelerating urban road lighting, public lighting, and architectural lighting, with cities like Guangzhou, Dongguan, Huizhou, Foshan, Qingdao, Nanchang, Ningbo, Weifang, Yangzhou, and Baoding being particularly proactive, with expected investment scales exceeding 1 billion yuan.
From the implementation timeline perspective, the announcement of the central government's bidding results in October 2012 was a landmark event, stimulating provinces and cities to reference the central bidding model, accelerating the promotion and implementation of LED lighting. This has already been reflected recently, with many government public lighting bidding announcements in places like Qingyuan, Dongguan, Zhuhai, and the Huning Expressway. The overall release of government bidding projects will be reflected in 2013, and the company's performance will mainly be reflected in 2013, which may be the year when LED policies are truly implemented.
Markets with high electricity prices start up quickly, and markets with longer lighting times also start up quickly.
The replacement of traditional light sources by LED lighting is mainly constrained by price, luminous efficiency, lighting time, and comprehensive cost considerations, primarily influenced by the investment recovery cycle and scale. In terms of lighting application types, lighting is currently mainly applied in general lighting, commercial lighting, chain lighting, and factory lighting.
The main differences in various application fields lie in the duration of lighting and the scale of unit batches. In terms of lighting duration, general lighting usually lasts 5-6 hours per day at the shortest, followed by commercial lighting (comprehensive shopping malls, building lighting, department stores, etc.), chain supermarket lighting (Family, Lawson, 7-11, Lianhua, Walmart, Carrefour, Suning, etc.), and factory lighting (the semiconductor industry, LCD panel industry, precision processing industry, PV industry, etc., often have 24-hour lighting), with lighting duration gradually increasing. In terms of replacement scale, household lighting typically has about 100 lights per household, but the number of lights in a single shopping mall is expected to be several times that of household lighting, and chain lighting and factory lighting can directly generate economic benefits.
Based on the duration of lighting, factory lighting is expected to recover costs in about six months, chain lighting in about one year, commercial lighting in about 1.5 years, and household lighting in about two years. Therefore, considering the scale effect, the willingness to replace factory and chain lighting is stronger. Thus, we believe that LED lighting will first be replaced and penetrate in the fields of factory lighting, chain lighting, and commercial lighting, and finally in household lighting.
From the perspective of electricity prices, the urgency of replacement can be assessed by assuming prices of 0.5 yuan/kWh, 0.7 yuan/kWh, 1 yuan/kWh, 1.5 yuan/kWh, and 2 yuan/kWh. In the fields of general lighting, commercial lighting, chain lighting, and factory lighting, the higher the electricity price, the shorter the investment recovery period. The investment recovery period between the highest and lowest levels in the same application field differs by four times. Therefore, overall, Western countries with high electricity prices have more motivation for the promotion and replacement of LED lighting. According to international comparisons of electricity prices, European countries and regions have relatively high electricity prices, such as Germany, Spain, and Italy. Additionally, Australia and Japan also have high electricity prices. Therefore, the penetration of LED lighting is implemented more quickly and with stronger willingness in countries and regions with relatively high electricity prices.
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