NEWS REVIEW
Osram opens new LED assembly plant in China
IN A MOVE to strengthen its position in the market for light-emitting diodes Osram has offi cially opened its LED assembly plant in Wuxi, China. The factory has a fl oor area of about 100,000 square meters and will employ as many as 2,100 people by 2017. Osram is investing a low three-digit-million euro amount to set up the plant. “With this step, we’re not only expanding our fully loaded backend LED capacities but also boosting our presence in the world’s largest single lighting market,” said Wolfgang Dehen, Chief Executive Offi cer of OSRAM Licht AG. “Asia, and particularly China, are key growth drivers for the global lighting and therefore the LED industry.”
China accounts for more than 20 percent of the world’s lighting market and has recorded a fast growth over the past years, particularly in terms of the uptake of LED lighting technologies. The size of the country’s total general illumination market was about €15 billion last year
and is expected to rise to about €23 billion by 2019. The market share of semiconductor-based products such as LEDs is forecast to surge to over 60 percent by then compared with only 29 percent in 2013. With the new LED assembly in Wuxi, Osram will be
Market for LED lighting in buildings to reach
$10.3 billion by end of 2014
in a position to address that growth. The contracts for the plant’s location were signed in May 2012, with ground- breaking taking place in August that year. “Osram’s new LED assembly plant will play a key role in forging Wuxi’s LED industry value chain, and we believe operation of the plant will help Wuxi to become one of the foremost optoelectronic semiconductor bases in China, and even Asia,” said Wang Quan, Deputy Secretary of Wuxi Party Committee and Mayor of Wuxi.
The factory is planned and run by the Osram Opto Semiconductors business unit. It is the company’s second backend site where LED chips are turned into light sources by assembling them into housings. The other site is located in Penang, Malaysia.
LEDs overtake fl uorescents for the fi rst time
A Precision-Paragon survey shows lighting professionals expect LED fi xtures should increase from 26 percent in 2013 to 49 percent in 2014. Lighting professionals expect to install more LED than fl uorescent fi xtures over the coming year, according to a recently released 4th Annual Lighting Survey. When asked what is the dominant lighting technology they expect to install in 2014, 49 percent of respondents selected LED, and 46 percent indicated fl uorescent. In the 2013 survey, 26 percent of respondents selected LED, and 68 percent indicated fl uorescent, as the dominant lighting technology.
Conducted annually since 2010, this year’s survey was distributed in December to over 5,000 energy-effi cient lighting industry professionals. The
survey’s topics covered the industry’s performance in the past year, as well as expectations for 2014. Survey respondents indicated that in 2013, LEDs accounted for 37 percent of the fi xtures they installed- up from 27 percent in 2012, and 13 percent in 2011.
The lighting manufacturer has developed products to keep pace with the increased demand for LED lighting, like the TKD fl uorescent-to-LED retrofi t kit.
Overall, the survey respondents reported a positive outlook for the energy-effi cient lighting industry. Sixty-four percent indicated that they had experienced either modest or substantial growth in 2013, and 82 percent expect the overall energy-effi cient lighting industry to experience growth in 2014.
6
www.compoundsemiconductor.net June 2014
MEMOORI estimates that revenue from the global LED Lighting market for buildings hit $8.1 billion in 2013 and will rise to around $10.3 billion by the end of 2014. The market will have grown still further to total almost $23 billion by 2018.
This represents a compound annual growth rate in the overall market of 22.8% over the 6-year period. Beyond the time frame of this report, revenue growth will slow as cost competition intensifi es; with the size of the LED lighting market expected to level off by around 2020.
A combination of continued consumer confusion over the benefi ts of LED lighting, a slow decline in sale prices and lower than expected global GDP growth meant that 2013 revenue growth for LED lighting was disappointing.
However oversupply concerns are likely to ease towards the end of 2014 as capacity is absorbed by a steady increase in global demand.
The major players such as Philips, OSRAM, CREE, Acuity and GE have set in place their strategies to retain a large slice of the market as the LED Lighting business grows. Ever increasing amounts of their revenues are coming from LEDs rather than traditional technologies.
Whilst the future looks bright in the medium term, lighting manufacturers are expressing increasing concern about what’s going to happen after 2020 when the replacement market is essentially saturated; with predicted levels of 70-80% adoption of long-lasting LEDs that will dramatically lengthen replacement cycles.
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