The LED revolution in lighting technology is comparable to another technological transformation: transistors. When transistors replaced vacuum tubes in the 1940s, they were instrumental in the later development of personal computers, notebooks, and smart phones. LED has the ability to be similarly transformational. Like the transistor, LEDs are smaller and have a longer operating life and lower total cost of ownership than previous technologies.
LEDs boast several other advantages over conventional lighting (such as incandescent halogen, compact fluorescent, and high-intensity discharge lighting):
- Quality white-light source
- Instant, dimmable light
- No heat emission
- No mercury
- Small size (miniaturization)
- High efficacy
In particular, LED's high efficacy—the ratio of the perceived power of light (in lumens) to input power (in watts)—has the potential to far exceed that of other technologies.
Note also that this contributes to meeting energy efficiency targets; consider, for example, the 2009 EU regulation for introducing energy-saving lamps. Ongoing research and innovations will help further expand the technology's potential. Already, LEDs—once used almost exclusively in indicator-type applications—are now applied in many different ways, including general illumination, portable devices, displays and signage, traffic signals, automobiles, and medical devices.
Value Chain Revised
LED is poised to dominate the market in the years ahead, with expected annual growth of roughly 50 percent through 2015.
By 2020, the LED share of the lighting market could realistically reach 90 percent.
The LED revolution is also gaining momentum in terms of market dynamics.
While demand for replacement lamps has accounted for significant growth thus far, that market is dwindling as fewer replacements are needed given LEDs' longer life span.
Also, new players from the semiconductor and consumer-electronics segments are entering the general lighting market with LED products.