For the first time since market research firm Strategies Unlimited started to publish data on the HB LED market in 1999, the overall market is likely to decline in 2009, according to Bob Steele.
Steele was speaking today at the Strategies in Light conference in Santa Clara, California. Strategies in Light is owned by Pennwell and supported by LEDs Magazine as a flagship media sponsor.
The 2009 event is the tenth annual Strategies in Light conference, and Steele gave a historical perspective on the HB LED market, which was a mere $820 million in 1999.
Between 1999 and 2008, said Steele, the HB LED market grew by a factor of 6.2, reaching $5.1 billion last year.
Year-on-year growth has varied dramatically; approximately 50% growth in 2000, 2002 and 2003 was driven by strong activity in the mobile appliances market, but in between the market saw virtually zero growth in 2001 as the tech sector went into recession.
Growth rates dropped to below 10% in 2005, but have since risen gradually, and in 2008 the market increased by 11% compared with 2007. However, the fourth quarter of 2008 showed signs of market deterioration, particularly in automotive and mobile phones.
Unit sales of LEDs grew by more than 25% in 2008, reaching 48 billion units. Mobile appliances remained the largest application, with 43% of the overall market, compared with 9% for lighting.
The mobile appliances sector showed the first positive growth (8.3%) since 2004, because of non-phone products (smartphones, MP3 players, laptop PCs, GPS, digital cameras). Not surprisingly, the highest growth sector was lighting at 39%.
Bleak outlook - except in lighting
Looking forward, said Steele, the "negative economic environment and bleak outlook for many LED end-use sectors indicate a lower market in 2009."
Visibility is very limited, and conditions could worsen. "Recovery could be delayed beyond 2010," said Steele. "The only 'bright spots' are backlights for LCD TVs, and of course lighting."
Strategies Unlimited expects the penetration of LEDs into the lighting market to continue into 2009, but with a lower growth rate of 17%, compared with the level of 35% that was forecast previously.
In the longer term, there is a positive outlook for the lighting sector, and Steele said that the market will get back on track, following the economic recovery.
Overall, the HB LED market is expected to decline by 5%. However, this includes a conservative forecast for growth in LCD TV backlights. This sector is the most uncertain of all LED markets, and excluding this area the remainder of the HB LED market will shrink by 10% in 2009.
Looking further out, Strategies Unlimited expects growth to resume in 2010, assuming the economy as a whole recovers. Between 2008 and 2013, the compound average annual growth rate is predicted to be 19.3%, with the market reaching $12.4 billion in 2013.
