1 February 2017

LED lighting market to grow at 13% CAGR to $54.28bn in 2022

The global LED lighting market accounted for $26.09bn in 2016 and will rise at a compound annual growth rate (CAGR) of about 13% from 2017 to reach $54.28bn in 2022, according to a report 'LED lighting Market for Residential, Architectural and Outdoor Applications: Global Industry Perspective, Comprehensive Analysis, and Forecast, 2016 – 2022' from Zion Market Research.

As lighting sources for general lighting applications, light-emitting diodes are ten times more efficient than incandescent lighting. Such an attribute, combined with their long working life and reliability, has made them suitable for the next generation of lighting systems (including emergency, backlight, automotive, indoor and outdoor), notes the report. To ensure accurate operation and to control the light intensity, LEDs need an efficient driver, normally implemented by power electronics-based conversion stages to match the LED characteristics with the AC grid voltage and to generate a controllable and high-quality light.

Benefits offered by LED lights over incandescent and fluorescent lamps are the major factor driving LED lighting market growth. In addition, the energy efficiency of LED lights, higher brightness, and longer life span are some of the major reasons offering market opportunities for LED lighting in the coming years, says the report. The continual introduction of new products (with innovative technology) by manufacturers such as Philips and GE are attracting customers globally. However, high production costs are expected to have an adverse impact on the LED lighting market. Nonetheless, screen and display backlighting market development is likely to open new doors for LED lighting demand.

The residential application segment (including lighting for bathrooms, hallways, dining rooms and kitchens) dominated the LED lighting market, comprising over 40% of market share in 2016. Increasing use of LED lighting for outdoor application (such as roadways, traffic lights, tunnels, parking lots, and garages) is expected to provide significant growth opportunities in coming years. Architectural applications include both functional and decorative lighting. Decorative LEDs are used to light up pools, gardens, fountains, and statues. Functional applications include landscaping and building facades.

Europe held the largest share of the global LED lighting market (over 31% in 2016) and is set to continue to dominate during the forecast period. This growth is attributed mainly to the rising demand for outdoor applications paired with stringent energy-efficiency regulation. The significant demand for LED lighting for residential purposes is the major factor in the surging market growth in this region. Implementation of the European Union (EU) Green Paper can lead to new opportunities for the European LED market in the near future, says the report.

As another leading regional market for LED lighting, North America is expected to see notable growth in the near future. Regulation over energy-efficient products plus high disposable income will help to drive demand for LED lighting for architectural application. The USA is consequently expected to be one of the most lucrative markets for LED lighting manufacturers.

The Asia-Pacific is considered to be the fastest-growing market for LED lighting and is expected to account for a significant market share in years to come. He developing road infrastructure, upcoming development projects, and the booming construction industry in developing countries such as China, India, and Indonesia are expected to create massive demand for LED lighting for residential as well as outdoor applications. This will include roadways, traffic lights, tunnels, parking lots and garages, as well as lighting in bathrooms, hallways, dining rooms, and kitchens.

The Latin American market is comparatively new and is still open for new companies and brands. Brazil will lead in LED lighting implementation, reckons the report, since it is aggressively picking up on the deployment of government-installed LED-based streetlights. The Middle East and Africa is also forecasted to see significant growth in the coming years. The United Arab Emirates (UAE) and Saudi Arabia are also predicted to hold a notable market share in near future.

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