The LED lighting market size is projected to be $111.57 billion in 2024 and is expected to reach $191 billion by 2029, with a compound annual growth rate (CAGR) of 11.35% during the forecast period (2024-2029). The rise of smart lighting systems (controllable via smartphones and other smart devices) has also driven the growth in demand for LED lighting. This is because LED lighting systems are more easily integrated with intelligent controls compared to fluorescent lighting technology, creating smart and responsive living environments in homes, offices, and cities, providing illumination where and when it's needed. Manufacturers have begun to reduce costs without compromising on quality, making residential applications an apt choice for LED lighting. Homeowners can also reap the benefits of saving money when using LED lights due to their long lifespan and lower energy consumption. Many homeowners are continually looking for more environmentally friendly methods. LEDs meet this demand as they do not contain mercury and are recyclable.
Besides residential use, offices have also become a common application of LED lighting. In today's business world, managers and owners are more focused on the overall well-being of their employees. By switching to LED lighting, offices can provide bright illumination for their employees. This can help them see more clearly, reduce eye strain, and the color of the lights can help boost mood and comfort.
One of the main challenges the market faces is the high initial investment required. The reason for the high initial investment in LED light manufacturing is the cost of raw materials. LED lights require high-quality semiconductor materials such as gallium arsenide, gallium nitride, indium phosphide, which are expensive. Additionally, LED lights also need other materials, such as electronic components and phosphors, which are also relatively costly.
Moreover, trade wars have had significant economic and political consequences. For example, in April 2018, the US government, after a Section 301 investigation, proposed a list of 1,300 Chinese export products and announced a 25% tariff on these products. Later in July of the same year, the US government released a plan to impose tariffs on $200 billion worth of Chinese goods, including LED products. Notably, the first list of LED products was mainly intermediate products such as wafers and backlight products. These tariffs have affected US companies with factories in the US that purchase intermediate products from China for manufacturing.
LED lighting refers to a lighting technology that uses light-emitting diodes (LEDs) as the primary light source. They are semiconductor devices that directly convert electrical energy into light through electroluminescence. LED lighting can be used for a variety of applications, including residential and commercial, outdoor, automotive, and decorative lighting.
The LED lighting market is segmented by application (commercial offices, retail, hospitality, industrial, highways and byways, architecture, public places, hospitals, residential, automotive), product type (lamps, luminaires), distribution channel (direct sales, wholesale/retail), and geography (North America (USA, Canada), Europe (UK, Germany, France, Rest of Europe), Asia-Pacific (China, Japan, India, Rest of Asia-Pacific, and other regions), Latin America, Middle East, and Africa). The market size and forecasts for all these segmented markets are provided in terms of value (USD).
Residential Sector Expected to Hold Major Market Share
The residential sector is expected to hold a major market share. One significant way many homeowners make substantial efforts for sustainability is by installing LED lighting throughout residential communities. These properties contain large networks of lighting that operate for the majority of the day and need to remain operational. Upgrading to LED lighting can result in significant energy savings. Consequently, many tenants and homeowners are also proactively using various LED options to upgrade their indoor lighting. The main advantages of LED lighting are energy efficiency and durability. LED lighting also provides design flexibility that other types of lights cannot achieve. Due to their small size, LEDs can be used in lamp shapes that are not possible with halogen bulbs and fluorescent bulbs. LEDs can also be designed to produce any light color required for interior design, and some products have adjustable color outputs. These advantages offered by LEDs have accelerated their application in the residential field. According to the latest Residential Energy Consumption Survey (RECS) completed by the IEA in 2020-2021 and released in 2022, 47% of US households currently use LED products to meet most or all of their lighting needs. Residential LED lighting also holds a larger market share than halogen lights, incandescent lights, and fluorescent lights. Ambient lighting provides overall illumination for a room. LED-based ambient light comes in different forms, such as ceiling-mounted LED downlights, LED strip lights, LED bulbs, and even chandeliers that produce light using LED fixtures.
The primary purpose of LED ambient lighting is to illuminate a room. However, due to the high quality of light emitted, LEDs can also provide highly attractive lighting effects. One of the most popular methods of creating ambient lighting today is through indirect installation, where LED fixtures are hidden but still spread soft, even light throughout the room. In June 2022, the Syska Group launched the Syska Glowring LED recessed and surface-mounted downlights. The main body of the lamp is made of thermoplastic material, which is lightweight, has a high safety factor, and has good heat dissipation. These lights come in two wattage and size options, with the 6W size being 87.5 x 42 mm, which can be recessed or surface mounted, and there is also a 12W option, sized 114.5 x 44.5 mm. These lights also have dual-color and three-way switching capabilities, helping to match various aesthetics. The Asia-Pacific region is expected to hold a significant market share.
The demand for LED lighting in the Asia-Pacific region is expected to increase, primarily due to the growing need for energy-saving lighting solutions and various initiatives undertaken by governments to promote their application across multiple industries in the market. LED lights are becoming increasingly popular in the region for their many advantages, such as low power consumption, longer lifespan, and a variety of color options. The growth of the LED lighting market in the Asia-Pacific region is also attributed to the strong development of the transition to energy-saving lighting solutions, upgrades to lighting infrastructure, and the increasing adoption of smart lighting solutions, as well as the growing awareness of their importance.
The integration of innovative features into LED lighting systems, such as dimming technology, motion sensors, and Bluetooth connectivity, further drives the growth of the LED light market. Smart lighting products, such as voice-controlled lights, motion sensors, and timers, are becoming increasingly common due to their convenience and energy efficiency, making them more popular in residential and commercial settings. The continuous rise in demand for energy-saving lighting from numerous end-users is expected to drive market growth in the Asia-Pacific region. Many professionals use LED lighting to provide competitive advantages over traditional compact fluorescent lamps or other lights. LED lighting effectively improves worker productivity, facilitates better quality control, and eases operations. These lights are also safe and cost-effective. LED lighting enhances brightness and quality while significantly reducing energy consumption. All these factors will stimulate the adoption of energy-saving lighting during the forecast period.
The research markets in many Western countries have become saturated, and the price war among manufacturers of the China LED lighting market is intensifying. Many manufacturers are looking for opportunities in other regions within Asia. The growing demand for LED lighting (including smart LEDs) in developing countries like India and Vietnam can provide massive opportunities, thus boosting domestic demand for LED lighting in the region.
Overview of the LED Lighting Industry
The LED lighting market is fragmented due to the presence of many regional and international players such as Heliospectra AB, Dialight PLC, Eaton Corporation, General Electric Company, and OSRAM GmbH. These major participants hold a significant share in the market and are focused on expanding their customer base abroad. These companies utilize strategic collaborative plans to increase their market share and profitability. However, with technological advancements and product innovation, small and medium-sized companies are expanding their market presence by securing new contracts and entering new markets.
February 2023 - Heliospectra launched MITRA Flex, a revolutionary flexible far-red light suitable for application-based cultivation. The new solution offers a three-in-one spectrum without sacrificing power, making it an ideal choice for specialized and application-based cultivation such as far-red light treatment at the end of the day or production, ensuring crop health throughout the year, even in low-light seasons.
January 2023 - Nichia Corporation and Infineon Technologies AG announced the launch of the industry's first fully integrated micro-LED (µPLS light engine) light engine for high-definition (HD) adaptive driving beam applications. The µPLS light engine features Nichia's unique internal LED chips, micro-LED technology, and Infineon's integrated LED driver IC, which can individually drive all 16,384 micro-LEDs using pulse width modulation (PWM) control.
