LED: A Big, Big World?

Estimated reading time: 2 minutes

LED technology is the best bet for future developments in the automotive lighting market segment; it has already spread through interior lighting and exterior back lighting applications. The next big challenge will probably focus on exterior front lighting, mostly headlamp systems… So, could the automotive lighting sector ensure a bright future for LED technology?

“We expect LED technology’s penetration rate in this sector to continue growing in the coming years”, asserts Pierric Boulay, Technology & Market Analyst at Yole Développement (Yole). “As cost decreases, OEMs expertise Tier 1s will increase and novel functionalities will emerge, especially for advanced front lighting systems”. In parallel, other technologies such as laser and OLED are being developed, still considered as complimentary approaches (Source: Automotive lighting: Technology, Industry and Market Trends report, April 2016).

Throughout the year, the “More than Moore” market research and strategy consulting company, Yole, explores the lighting world and proposes dedicated technology and market analysis. From UV LED (UV LED: Technology, Manufacturing & Applications Trends report, July 2015) to LED modules (LED Lighting Module Technology, Inudstry & Market Trends report, November 2015), Yole’s experts highlight the latest innovative LED technologies, related market challenges and competitive landscape. Pars Mukish, Business Unit, LED, OLED, Lighting Technologies and Sapphire technologies at Yole, would like to tell you more about the LED lighting module at the 6th International LpS Event on Solid-State Lighting (LpS 2016 - September 20-22 - Bregenz, Austria). His talk entitled “LED Lighting Module - The Next Growth Opportunity in the Lighting Industry” will take place on September 20 at 2pm. Discover the LpS 2016 agenda today!

The automotive lighting industry is today controlled by 5 main players, confirm Yole’s analysts. In 2015, the top 5 industry players (i.e. Tier-1s) held ~80% of total automotive lighting revenue. Yole lists: Koito (JP), Magneti Marelli (IT), Valeo (FR), Hella (DE), and Stanley (JP). The remaining revenue was distributed across a very fragmented industry with more than 20 players.

But this situation could change in the future due to the rapid evolution of the automotive lighting market. Indeed some emerging players including Xingyu (CN), Olsa (IT), Ta Yih (CN), and Grupo Antolin (ES), have already exhibited a very high growth rate: “More than +10% between 2014 and 2015, compared to the total market’s average +5.4% growth,” explains Pierric Boulay. To effectively differentiate from market leaders and gain additional market share, these players mainly focus on innovative systems and/or lower-cost solutions and/or emerging markets like China.

And Pierric adds: “Also, it is important to understand that the introduction of new technologies/functionalities will push OEMs to be closer to device/component developers (i.e. Tier-2s and Tier-3s) and new suppliers. As a result, they will probably bypass more and more Tier-1s for development and production in the future, and therefore create a new supply chain.”

At the LED module level, the story is different. The attractiveness of this part of the LED supply chain has been full demonstrated. Yole announces: “Today, value is mainly located at module level”.

Indeed, depending on the application and its requirements, players select and develop the most appropriate LED solution. And with LED modules, lighting integrators gain numerous benefits: faster product development cycles, less complexity for integration and accurate management of high-level parameters. However, selecting its LED module is not easy. It requires thorough knowledge and understanding of the three areas: application, technology, and system architecture (Source: LED Lighting Module Technology, Industry and Market Trends 2015 report, Yole Développement & Piseo, November 2015). Pars Mukish will outline all the specificities of this sector and highlight business opportunities and technical challenges at LpS 2016.