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LED lighting has grown from strength to strength over the last decade driven by energy efficiency regulations, widespread manufacturing and reduced prices of LED light sources. Approximately 15% of building energy is utilised for lighting and the usage of LEDs has resulted in significant energy savings to buildings across the globe. The World Green Building Council (World GBC) has issued a bold new vision for buildings and infrastructure around the world to reduce carbon emissions by 2030, and achieve 100% net zero emissions buildings by 2050. LED lighting is an important component in achieving net zero goals by reducing energy consumption and carbon emissions.

By mid-2018, LEDs transformed from being mere light sources to offer an aesthetic value to places of installation. Smart and color-tunable LEDs are currently on demand for the controllability they offer in commercial and hospitality segments. At the same time, companies are also focused on circadian lighting – lighting that supports the key aspect of well-being. Horticultural lighting gained prominence during the same period. Beyond the traditional players like Signify and OSRAM, companies like Heliospectra, LumiGrow, Thrive Agritech, and Gavita catalyzed this vertical.

Companies are also optimistic about the prospect of additional value and revenue streams from data transmission through light (Li-Fi). Pilot and field testing for Li-Fi installation has been carried out in schools, offices, hospitals and even inside flights. PureLiFi is partnering with lighting companies like Zumtobel and Lucibel to offer innovative LED solutions.

Clearly, lighting is moving beyond its traditional purpose of illumination and adding value to tangible aspects of sustainability irrespective of the market.

Market Consolidation

Frost and Sullivan’s analysis of the LED lighting market in 2018 predicted that the market is heading towards consolidation, with the number of prominent players decreasing every year. Over the last two years, major players such as OSRAM, GE, Cree, Cooper Lighting, have either sold part of their lighting business or have been wholly acquired by another company. Here is a list of major acquisitions since 2018:

  1. Savant Systems’ acquisition of GE’s lighting business for an undisclosed amount
  2. Signify’s acquisition of Cooper Lighting from Eaton for $1.4 billion and Firefly LiFi for an undisclosed amount
  3. Ideal Industries’ acquisition of Cree Lighting Business for $300 million
  4. OSRAM selling Sylvania Lighting Solutions to WESCO International and Siteco luminaire business to Stern Stewart Capital
  5. American Industrial Partners’ acquisition of GE commercial lighting business
  6. Ecosense’s acquisition of Lumium Lighting and SORAA
  7. Leviton’s acquisition of Viscor

Market Recovery Post COVID-19

COVID-19 has had a significant negative impact on many markets as manufacturing units were shut down, resulting in disruption to the supply chain of critical raw materials. As a result, lighting companies have revised their outlook for the year 2020 due to uncertainties in resuming business as usual. There are also plans to increase the price of LED light sources to an extent of 10% by some manufacturers. The pandemic, however, has opened up a new opportunity that has so far been intensely discussed but scarcely implemented, which is healthcare lighting.

Ultraviolet light has been used to sterilize and disinfect medical equipment for quite some time. Mercury UVC lamps were used for a long time but their warm-up time and UV emittance level (254nm) were severe limitations. Mercury laden lamps also pose severe environmental risks unless recycled properly. Mercury lamps dumped without proper disposal measures end up contaminating the soil and groundwater, causing severe health issues. The onset of COVID-19, triggered researchers across the globe to develop an ultraviolet LED solution to disinfect and sterilize hospital beds, floors, surfaces that could keep the virus active for days together. UVC LEDs can be configured to ideal wavelengths (260-270 nm) that could kill the COVID-19 virus as well as offering an attractive price and sustainability benefits. Leading players are already working with healthcare facilities across the globe to accelerate the use of UVC LEDs to eliminate the threat of infection from touch or contact.

Other applications that might see growth, in the new normal of COVID-19 are offices and industries that will accelerate the transition to LED lighting to manage their workplace, reduce operational costs and ensure the safety of the employees. Smart LED luminaries with sensors will track employee movement within the office space and optimise lighting needs.

Applications segments that are being affected due to COVID-19 include architectural, decorative lighting and outdoor lighting. Consumers are apprehensive and circumspect on their spending towards large scale architectural projects to maintain a cash reserve. The decline in outdoor lighting, however, will be offset by the growth in smart street lighting projects being witnessed across the globe.

Frost and Sullivan’s analysis predicts building IoT to provide the impetus for LED adoption in buildings and locations that has high people movement. LED lighting will be at the core of building IoT, acting as a future-proof platform through which evolving technology trends like Li-Fi, smart workplace will be offered.

LED lighting market will continue to evolve on the back of avenues like IoT, human-centric lighting and wireless technology. Market consolidation, through acquisition, is expected to continue albeit at a slow pace for the next two years. Clear guidelines and regulations from countries on energy efficient lighting will help them achieve net zero energy targets in the future and reduce carbon emissions to promote a green environment.

About Dennis Victor

Dennis VictorDennis Marcell Victor is a Senior Research Analyst within the Industrials Group at Frost & Sullivan. He has over 6 years of experience across information technology services, telecommunication, and energy and environment industries. His area of expertise lies in tracking global mega trends and transformative technologies that will impact the homes and buildings market. Over the years he has published several research reports, specifically on the lighting and lighting controls market. He has also been part of consulting projects involving market and industry assessment, technology development and competitive bench marking.

About Dennis Victor

Dennis Victor

Dennis Marcell Victor is a Senior Research Analyst within the Industrials Group at Frost & Sullivan. He has over 6 years of experience across information technology services, telecommunication, and energy and environment industries. His area of expertise lies in tracking global mega trends and transformative technologies that will impact the homes and buildings market. Over the years he has published several research reports, specifically on the lighting and lighting controls market. He has also been part of consulting projects involving market and industry assessment, technology development and competitive bench marking.

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