GaN LED Revenue Ascends 10.6 Percent in 2013—but Market’s Era of Fast Growth Is Coming to An End

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El Segundo, Calif. (Feb. 13, 2014)—Driven by surging demand from the lighting, tablet and cellphone backlighting segments, global revenue for gallium nitride light-emitting diodes (GaN LED) climbed 10.6 percent in 2013, but this could mark the last hurrah for the era of double-digit dollar growth for the market.

 

Worldwide revenue for GaN LEDs rose to $12.4 billion in 2013, up from $11.2 billion in 2012, according to IHS Technology (NYSE: IHS). Revenue growth this year is forecast at 4 percent, with sales totaling $12.9 billion, as presented in the attached figure. Although unit shipments will continue to rise, the market will enter a sustained period of flatness starting in 2015, based on data from the new IHS report entitled: “Quarterly GaN LED Supply and Demand Market Tracker: Q4 ‘13.”

 

GaN LEDs are a type of light-emitting diode suitable for high-brightness applications.

 

“The GaN LED market has experienced strong revenue growth in recent years, propelled by the combination of growing demand from the lighting and display backlighting segments,” said Jamie Fox, principal analyst for LEDs at IHS. “However, LED backlighting market revenue has begun to decline—although lighting will continue to expand. The combination of the contraction in backlighting and rise in lighting will result in flat revenue for the GaN LED market in the coming years.”

 

While revenue growth will stall, GaN LED unit shipments will continue to rise in the coming years, but at a more moderate pace than before. Following increases of 17.3 percent in 2013 and 7.3 percent in 2014, unit shipments will rise in the 3 to 4 percent range from 2015 through 2018.

 

Backlighting backstory

 

LEDs are used extensively as backlights for liquid-crystal display (LCD) panels.

 

But backlighting applications including televisions and monitors will soon reach 100 percent LED saturation. Furthermore, the value of the LEDs in each television and PC monitor shipped has begun to decline.

 

Meanwhile, the fast growth of LEDs in tablets is slowing. The backlighting market in this area is starting to mature in terms of LED technology, and shipment levels of the tablet devices also are not growing as rapidly as before.

 

Overall, the GaN LED backlighting segment is projected to decline to $3.7 billion in 2018, down from $4.3 billion in 2013.

 

Lighting the way

 

In contrast, the GaN LED lighting segment will rise to $5.9 billion in 2018, up from $4.2 billion in 2013.

 

All the GaN LED backlighting applications combined still exceeded the lighting segment in 2013, at $5.5 billion vs $4.2 billion. Lighting and backlighting revenue will be on a par with 2014 and 2015, but lighting will take a decisive lead in 2016.

 

Captive audience

 

With its latest GaN LED report, IHS has significantly expanded its estimate of the size of the market. IHS adjusted its market view to account for all captive revenue and also to represent the true size of the Chinese market.

 

An example of a captive LED supplier is U.S.-based Cree Inc., which makes both LEDs and lighting products that employ those LEDs.

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About IHS (www.ihs.com)

IHS (NYSE: IHS) is the leading source of information, insight and analytics in critical areas that shape today's business landscape. Businesses and governments in more than 165 countries around the globe rely on the comprehensive content, expert independent analysis and flexible delivery methods of IHS to make high-impact decisions and develop strategies with speed and confidence. IHS has been in business since 1959 and became a publicly traded company on the New York Stock Exchange in 2005. Headquartered in Englewood, Colorado, USA, IHS is committed to sustainable, profitable growth and employs approximately 8,000 people in 31 countries around the world.

 

IHS is a registered trademark of IHS Inc. All other company and product names may be trademarks of their respective owners. Copyright © 2014 IHS Inc. All rights reserved.

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