After three years of downturn, LED industry prospects seem to be improved next year; it’s mainly because the growth of general lighting, and also the demand for backlit of tablet PC. UBS Global Asset Management report analyzed that if calculate by chip area, the general LED lighting demands will grow 62%, also suppose the same price decline rate, the LED lighting revenue in year 2014 will grow 37%. In other words, LED lighting penetration rate will increase to 9% next year from 3-5 % of this year, and estimates will drive the LED chip demand growth by 25%, while the traditional incandescent lamp will be to reduce 5% annually.
UBS pointed out that in the lighting market, the home lighting with the lowest market share, that because the LED light bulb was too expensive in the past years, home facelift need take years to recovery, but now the situation is changing, the LED bulb price falls, governments continue to ban incandescent bulb, plus the overall global economic recovery, all those factors will encourage the growth of LED lighting. UBS estimates that global household LED lighting revenues will grow 90% next year, much higher than the 37% of commercial lighting and 57% of industrial lighting.
International lighting manufacturers such as Philips and Osram only outsource the downstream packaging module in the past. UBS analyst Fredric Stahl believes that due to the substantial increase in demand of LED lighting, such manufacturers may consider to adopt Asian LED chip on the upstream end so as to improve price competitiveness.
As backlight market, TV market has been declining, UBS noted that the penetration rate of LED TV grown from 75% to 95% this year, but the number of chips for each TV has greatly reduced by 25% (due to the use of Direct Illumination-type LED Backlight reduce the LED quantity). Fortunately, there will be slightly improvement in 2014 due to the larger size TVs, and the popular of high-definition TV such as 4K*2K. UBS estimates that TV backlight LED proportion will reduce to 16% and 13% the next two years from 36% this year.
Tablet PC LED demand will surge 90% next year, mainly drove by the Apple iPad, and coupled with improved resolution and tablet PCs are still in the growth stage. UBS estimates that the Tablet PC representing LED chip demand will reach 24% in 2014.