Market segmentation LED lighting applications penetrate home lighting

In 2015, while tackling the challenges of the global energy crisis and the gradual deterioration of the environment, China is also committed to strengthening industrial restructuring, promoting energy conservation and emission reduction, and transforming development methods. Semiconductor lighting has gradually established an important position in the lighting industry due to its superior performance and high-efficiency green characteristics. With the rise of emerging applications such as the Internet of Things, the trend of intelligence has accelerated, providing a major opportunity for the development of the LED industry.

Global LED lighting application market segmentation

Due to the replacement of alternative light sources and the global incandescent lamp replacement boom, the global LED lighting market grew rapidly in 2014, but in 2015, due to the sharp drop in prices of alternative light source products (including lamps, bulbs), product profits were not as expected. The LED lighting market is not growing enough. The scale of LED lighting market has slowed down. In 2015, the global LED lighting market was 25.7 billion US dollars, up 44% year-on-year in 2014, and the LED lighting market penetration rate reached 31%. It is expected that the global LED lighting market will gradually stabilize from 2016 to 2018, and some alternative light sources have been replaced, and the market growth rate is stable at around 20%. Lighting companies are beginning to shift their focus to professional lighting, such as commercial lighting, engineering lighting and architectural lighting.

The global LED industry presents the following development characteristics: First, the LED lighting application market segmentation. Faced with the downward trend in the price of LED lighting products, global LED companies are looking for a segment of the field. Key enterprises are moving towards the high end of the value chain, strengthening innovation and research in industrial lighting, automotive lighting, plant lighting, intelligent lighting and other sub-sectors, providing alternative lighting solutions for different application environments. For example, in 2015, the global LED industrial lighting market will reach 2.366 billion US dollars, and is expected to reach 3.935 billion US dollars in 2018, with a compound annual growth rate of 18.5%. In the industrial field, LED patio lights are the largest proportion of lighting products, and currently the world's key LED companies have entered the field, such as the United States General Electric, Cree, Toshiba, Iwasaki Electric.

Second, the growth rate of the global high-brightness LED industry has slowed down. Over the past few decades, different application markets have stabilized the high-brightness LED industry's compound annual growth rate by 20% to 30%. However, in recent years, the growth rate of output value has dropped significantly. In 2014, the output value of high-brightness LEDs was 14.2 billion US dollars, and the growth rate dropped from 19% in the previous year to 9%. In 2015, the output value increased only slightly, reaching US$14.5 billion, a year-on-year increase of 2%.

Third, the international LED giants' mergers and acquisitions have sprung up. In 2015, key LED industry companies announced the sale or spin-off of LED lighting business, which changed the industry structure. As the leader of lighting companies, Philips started a series of split and reorganization plans. Last year, it announced that it would sell 80% of its lighting company Lumileds to China Capital GSRGO Scale Capital for $3.3 billion, but was subsequently rejected because it was rejected. This year, it reached an acquisition agreement with a manufacturing company that manufactures OLED light engines and panels in the United States. Philips is currently planning to spin off its lighting and medical businesses.

As the leader of European lighting companies, Osram sold the 13.47% stake in Foshan Lighting to Guangsheng Group in 2015. Currently, the light source part of the business is ready to be sold off.

General lighting of the traditional lighting industry in the United States, in 2015, announced the integration of LED lighting business and solar energy related business, and re-established the new company Current, which made the lighting business have more independence and development space.

Under the pressure of competition, Cree also split the power device and RF device business from the head office and set up a branch to reduce the low-margin lighting products business and enhance the competitiveness of its core business.

Japan's Matsushita Lighting is also a frequent action. In 2014, Shanghai Lighting Factory and Hangzhou Plant in China were shut down. In the future, Indonesia's fluorescent lamp factory and two Japanese factories will be closed to fully shrink the lighting business.

Japan’s Toshiba announced its withdrawal from the white LED business in 2015 due to the decline in the yen exchange rate and business losses.

China's LED industry penetrates into home lighting

In recent years, the market penetration rate of LED lighting in China has increased significantly, and it has been promoted and used in landscape lighting, road lighting, commercial lighting, etc., and accelerated penetration into home lighting. In 2015, the overall industry scale of China's semiconductor lighting industry was 396.7 billion yuan, a year-on-year increase of 15% compared with 2014. Compared with the average annual growth rate of over 30% in the past 10 years, the growth rate has dropped significantly.

From the perspective of import and export, from 2011 to 2014, the export growth rate of China's overall lighting products remained at a relatively high level. In 2014, the total export value of lighting products was 41.5 billion US dollars, reaching the highest level in recent years, up 16% year-on-year. The export growth rate of lighting products remained above 10% in 4 years. Affected by the global economic environment, the export growth rate of China's overall lighting products also declined in 2015. The total export volume of lighting products in the first three quarters was 33 billion US dollars, and the export growth in 2014 was 8.5%. The growth rate fell to the first time. Number of digits.

As a fast-growing product in the lighting industry, LED lighting products have seen a rapid increase in product exports from 2011 to 2014. Driven by the global ban on incandescent lamps, China's LED lighting exports have maintained a high level. In 2014, exports totaled US$9 billion, up 50% year-on-year. The growth rate for four consecutive years was above 60%. Since 2015, with the gradual increase in the penetration rate of LED lighting, market demand has slowed down, and the export volume of LED lighting products in China is also slowing down. In the first three quarters of 2015, the total export value was US$8.4 billion, a year-on-year increase of 20% in 2014, and the growth rate dropped sharply.

Diversified applications to expand industrial growth points

From the perspective of development opportunities, the first is the “One Belt, One Road” and other national policies to create a good environment for industrial development. With the release of the national “One Belt, One Road” policy, new opportunities have been opened for complementary and open development of countries along the route, and a new platform for international cooperation has been achieved. On the basis of satisfying the domestic market, China's LED industry does not need to expand structural and overcapacity by expanding exports and international cooperation. Emerging countries and regions such as India, Russia, Africa, Southeast Asia, etc., with the support of national policies, economic development and industrial transformation and upgrading, the LED lighting market will be further opened. For example, the Indian government is expected to bid for 200 million LED bulbs in 2016, and the public bidding for the replacement of LED lamps for street lamps will make the LED lighting market in India further released in 2016. The Southeast Asian market mainly includes six countries including Thailand, Singapore, Malaysia, Vietnam, Indonesia and the Philippines. The scale and penetration rate of the LED lighting market have steadily increased. The introduction of the national “Belt and Road” policy has provided an important opportunity for LED companies to go abroad, and has created a good environment for industrial development.

Second, the diversification of application demand provides a new market entry point for industrial development. With a series of new application fields such as plant lighting, security defense, medical electronics, light source communication, intelligent lighting, etc., the application fields of LED products in China are gradually expanding, providing an important entry point for industrial development. In the past two years, intelligent lighting has provided more than 60 billion yuan of market space for China's LED industry; applications such as plant lighting and medical electronics have opened up the market for UV LEDs. The market size of deep ultraviolet LEDs will exceed 6 billion in the next 3 to 4 years. Yuan; In 2015, the market scale of infrared LEDs used in security defense, monitoring and other fields has increased to 120 million US dollars, and it is expected to continue to climb in the future.

Third, the trend of multi-technology integration creates important opportunities for industrial development. In the context of the development of the Internet of Things and the Industrial Internet, the convergence of LED technology and communication, sensing and integrated circuit technology has become a major trend. Internet of Things applications include smart homes, smart wearables, smart buildings, etc. Among them, intelligent lighting technology has become an important platform, and enterprise cross-border integration has become the norm. Through cross-border interaction, the combination of lighting and light source, as well as the combination of hardware technology and mobile Internet, provides a more energy-efficient, efficient and comfortable lighting environment, while achieving intelligent control.

Enhance the core competitiveness of the industrial chain

From the perspective of the challenges, the first is that core patents, technologies, and standards are subject to people. At present, the global LED high-end product market and core patent technology are basically monopolized by the international five giants. Philips, Cree, Osram, Nichia Chemical, and Toyota Synthetic Co., Ltd. have reached a license agreement through cross-authorization to form a LED technology patent pool to consolidate the industry. The leading position, the weak patent awareness of enterprises and the lack of core patents will become a major obstacle in the development and expansion of Chinese enterprises and import and export trade.

Second, the high-end market lacks competitiveness. At present, most domestic enterprises have mastered the low-power LED chip technology, but they lack competitiveness in high-end fields such as high-power and special application chips. For example, China's market share in high-end high-power lighting chips is relatively low, 80% depends on imports; high-end chips such as automotive lighting are basically completely dependent on imports, and enterprises capable of mass production are still a minority.

Based on this, two suggestions for industrial development are proposed: First, strengthen the benign interaction of the industrial chain and promote independent core technology innovation. By guiding upstream and downstream enterprises to jointly tackle the problem, product synergy is achieved. Focusing on the new requirements of upstream chip technology and midstream packaging technology in emerging application fields such as downstream plant lighting, automotive lighting, and intelligent lighting, through multiple channels, strengthen guidance and focus on supporting the upstream and downstream backbone enterprises of the industry chain to carry out strategic cooperation and joint To solve problems, achieve concentrated breakthrough of key common technologies and collaborative development of products. Focus on promoting key technology innovations, such as silicon-based LED technology with independent intellectual property rights, homoepitaxial technology, patterned substrate technology, MOCVD equipment, etc., to enhance the core competitiveness of the industry chain.

The third is to promote the development of industry standards and improve the testing system to raise patent awareness. Improve the LED integrated standardization technology system. We will prioritize the development of standards that are urgently needed for industrial development and mature conditions, and carry out the revision and formulation of LED system basic standards, component standards and system evaluation standards in a phased and focused manner, and ensure the promotion and implementation of standards. Relying on national and local quality supervision and inspection centers to strengthen market regulation and supervision. At the same time, relying on the competent authorities of the industry and associations and other institutions to build a public service platform for LED intellectual property rights, explore the establishment of an early warning mechanism for intellectual property rights and a patent sharing mechanism, and establish a patent pool.

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