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STRATEGICALLY SPEAKING:
Insights Into LEDs & Lighting, from Strategies Unlimited
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Recent conferences in Asia highlight LED industry progress
ROBERT STEELE
Two recent LED conferences – one in Japan and the other in China – illustrate how the LED industry continues to move forward, even in the midst of a worldwide recession that has caused substantial downturns in other industries.
Japan
The first conference, LED Japan/Strategies in Light (organized by Strategies Unlimited and PennWell), was held in Yokohama on September 16-17. The most pleasant surprise at this event was the growth in attendance over last year’s event, held in October in Tokyo. Total attendance (including the conference and associated exhibits) nearly doubled, from 2,700 in 2008 to 5,300 in 2009. Likewise the number of exhibitors increased from 45 to 67. This occurred in a year in which the GDP of Japan declined in the first half by 7.95% from 2008. Clearly something interesting is happening to attract this kind of attendance in a very depressed economic environment.
Although Japan has long been a major center of HB LED component manufacturing (accounting for 44% of world supply in 2008), it is a relative latecomer in the adoption of LED lighting, compared to, say, the US, Europe and China. However, that situation is beginning to change, as a number of major (and many smaller) companies in Japan enter the market with well-engineered and well-designed lighting products.
The LED lighting pioneer in Japan has been Panasonic Electric Works (formerly known as Matsushita Electric Works), a well-established supplier of lighting products. The company introduced its first LED lighting products several years ago, and in 2009 is still the largest supplier. More recently Toshiba Lighting and Sharp have entered the market with a wide variety of LED luminaire products as well as replacement lamps.
Regarding the latter, it seems that these companies are beginning to target the consumer market (in addition to the professional lighting market, which is the focus of most LED lighting suppliers at present). In Akihabara, the Tokyo electronics retail district, a large number of shops prominently display retrofit lamps from Sharp and Toshiba, claiming light output equivalent to 40W and 60W incandescent lamps. Retail prices are in the neighborhood of $40.
Other Japanese companies active in the LED lighting market including Ushio, one of the country’s largest lamp manufacturers, as well as Odelic, Daiko Electric, Yamada Shomei, Yamagiwa, Iwasaki Electronics, and several others that are just beginning to enter the market in 2009.
As a country with high electricity prices, as well as a strong focus on energy efficiency and the need for reduction in greenhouse gas emissions, it is not surprising that Japan has begun the move to solid-state lighting in earnest. Because the country already has wide adoption of highly efficient fluorescent lighting, it is understandable that it has waited until the efficiency of LEDs has reached the point where they are competitive with fluorescent sources to begin the adoption of LED lighting. There are a number of regulatory moves underway to promote the adoption of LED lighting, although the details are not yet clear (at least to an outsider). The focus is on facilities that use lighting on a 24-hour-per-day basis, such as factories, convenience stores, gas stations, and the like. As one example, a Lawson’s convenience store in central Tokyo has converted all of its overhead fluorescent lighting to LEDs.
China
The 6th China International Forum on Solid-State Lighting (ChinaSSL 2009), held in Shenzhen on October 14-16, showed similar attendance trends to LED Japan. Attendance increased from 621 in 2008 to 1,087 in 2009. Organized by the China Solid-State Lighting Alliance (CSA), and supported by the China Illuminating Engineering Society, the China Association of Lighting Industry, and the Ministry of Science and Technology, among other organizations and government ministries, this is arguably the most important LED-related conference among the many held in China each year.
China’s enthusiasm for solid-state lighting seems to only increase from year to year. A steady stream of new companies is entering the market, at all levels of the supply chain, from epitaxy and chips to lighting fixtures, mostly funded by private investment, but with some government support as well.
The most recent statistics, reported by Wu Ling, General Secretary of the CSA, and others at the conference, there are now more than 1,000 LED packaging companies in China (although many of them are very small, with more than 80% of them having investment of less than RMB 10 million (US$1.4 million). Perhaps more surprising is the number of epitaxy and chip companies, estimated to number more than 60 by the end of 2009.
Equally impressive is the figure of approximately 240 MOCVD reactors expected to be installed (or at least on order) by the end of 2009. However, looking at the number of epi/chip companies relative to the number of reactors results in a figure of approximately four reactors per company. Compared with the more massive reactor populations installed or planned by competitors in the US, Europe, or elsewhere in Asia, it seems likely that some consolidation among the various Chinese chip companies will be required to achieve economies of scale and to refine large-volume manufacturing processes, as has happened over the past few years in Taiwan.
In addition to the chip and packaging companies, there are also several thousand LED application companies in China. The exact number is hard to determine, and in fact it is growing on a weekly basis. According to CSA data, the total LED applications revenue in China in 2008 was RMB 45 billion (US$ 6.5 billion), up 50% over 2007, with the largest applications being architectural lighting and display.
In addition to this domestic market, Chinese system companies are also active in production for the export market as well. This provides and important market opportunity for foreign HB LED suppliers, as the Chinese exporters are becoming more sensitive to quality, especially for lighting products, and thus many of them are using imported LEDs from Cree, Lumileds, Osram and other foreign suppliers to achieve performance and reliability levels that are not available from domestic LED manufacturers.
LED streetlights continue to be a focus of the Chinese national solid-state lighting effort. In the past, individual cities have taken the lead, installing many thousands of streetlights per city in a number of cases (the best estimate of the cumulative total through the end of September 2009 is 200,000). Vendors were usually chosen from the local region, and product quality was often poor, with many early failures reported.
A new streetlight program, initiated at the national level, will involve 21 cities, each of which is expected to install at least 10,000 LED streetlights. There will be a much greater emphasis on quality, and performance standards will have to be met as part of the bidding process. While in the past suppliers were all based in mainland China, in the new program bidding will be open to suppliers from Taiwan as well.
The total potential number of streetlights that could be installed under this program could be up to 1 million. However, the timeframe over which this could happen is still uncertain. At this point the program is still in the discussion phase, and no installations have yet taken place. In the meantime, many cities continue to install LED streetlights on their own, and a dozen others are clamoring to join the program.
