El Segundo, CA--Driven by demand from the general-illumination and screen-backlighting segments, global revenue for gallium nitride (GaN)-based LEDs climbed 10.6% in 2013, but this could mark the last hurrah for the era of double-digit dollar growth for the market, say analysts at IHS Technology (NYSE: IHS).
Worldwide revenue for GaN LEDs rose to $12.4 billion in 2013, up from $11.2 billion in 2012, according to IHS. Revenue growth this year is forecast at 4%, with sales totaling $12.9 billion, as shown in the 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.”
“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% in 2013 and 7.3% in 2014, unit shipments will rise in the 3% to 4% range from 2015 through 2018.
Backlighting backstory
Backlighting applications, including televisions and monitors, will soon reach 100% 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 versus $4.2 billion. Lighting and backlighting revenue will be on par with 2014 and 2015, but lighting will take a decisive lead in 2016.
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