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The LED Lighting Market size is estimated to grow by USD 41.5 billion, at a CAGR of 8.08% between 2023 and 2028. The declining manufacturing cost of LED lights, driven by advancements in technology and economies of scale, is making LED lighting more affordable and accessible, driving market growth. The phasing out of traditional lighting technologies such as halogen, incandescent, fluorescent, and HID lamps, due to their inefficiency and environmental impact, is further boosting the demand. Additionally, the need for LED lighting in hazardous areas, where traditional lighting may not be suitable, is creating new opportunities for growth in the market, especiially in automotive lighting applications. Overall, these factors are driving the widespread adoption of these across various industries and applications.
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The market share growth of the residential segment will be significant during the forecast period. In 2022, residential construction was the largest and fastest-growing application segment of the market, driven by increasing urbanization and rising energy efficiency requirements across the globe. The increase in urban population is having a positive impact on the focus market as the use of outdoor landscape lighting in the residential segment is increasing as consumers are now focusing on trendy and personalized home decoration. In addition, the governments of several countries offer support because LED lights are energy efficient compared to traditional lights.
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The residential segment was valued at USD 25.80 billion in 2018. With the increasing number of smart cities, many lighting companies have started providing these systems to these cities owing to properties including lesser Cox emission than conventional lighting systems. This, in turn, drives the sales of LED lights in households worldwide, leveraging the growth of the residential segment of the market during the forecast period.
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APAC is estimated to contribute 42% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period. The market in APAC is growing at a rapid rate, primarily because of the increased demand for energy-efficient lighting solutions from the residential and commercial segments. Furthermore, the region is becoming a hub for retail, hospitality, and healthcare industries, as many multinational companies are setting up their offices in APAC. In APAC, China is the major revenue-contributing country of the regional market in focus owing to the presence of many manufacturing units and industries.
The market is witnessing rapid growth driven by its superior energy efficiency compared to traditional lighting sources, leading to reduced energy consumption and a lower carbon footprint. Technological advancements have made them more environmentally sustainable by eliminating hazardous materials. Initiatives like the Renew America's Schools grant program are promoting the adoption of these in educational institutions. LED technology is widely used in various applications including indoor and outdoor lighting, automotive utility lighting, and vehicle lighting, contributing to significant energy savings. Developing countries are increasingly adopting these products, supported by local manufacturers and advancements in wireless technologies like Wi-Fi for smart lighting solutions. Occupancy sensors and daylighting features further enhance the efficiency of these products such as LED strips, bulbs, and tube lights, making them ideal for industrial, warehouse, and stadium lighting applications.
Also, the market is expanding rapidly across various sectors, including indoor applications such as residential, retail, and healthcare and educational institutions where energy-efficient LED lighting enhances ambience and reduces costs. Outdoor applications like street and roadway lighting, parking lots, and smart stadiums benefit from LEDs' superior energy input efficiency and longevity, ensuring reliable illumination and cost savings. Integration with Wi Fi enables smart functionalities, allowing for remote control and automation in both indoor situations and outdoor environments. In landscape and architectural lighting, LEDs offer versatility in design and performance, catering to aesthetic preferences and sustainability goals. As the market advances, LED technology continues to redefine lighting solutions, providing innovative options for efficient and effective illumination across residential, commercial, and public sectors.
The declining manufacturing cost of LED lights is notably driving the market growth. The decline was primarily due to the decrease in the average selling price (ASP) of chips and components used in manufacturing LED devices. This reduction in LED production costs has also LED to lower initial installation costs for LED lamps and lanterns as well as grow lights, thereby accelerating their installation across all application segments. This trend is supported by the integration of features such as Wi-Fi, occupancy sensors, and daylighting in LED products, including LED strips, LED bulbs, and LED tube lights.
Further, the decrease in manufacturing costs can be attributed to government subsidies for purchasing semiconductor equipment, such as metal-organic chemical vapor deposition (MOCVD), which is crucial for LED manufacturing. This has encouraged manufacturers to expand their production capacity. This expansion is driven by technological advancements and the demand for energy-efficient lighting products. Additionally, government support has helped companies reduce variable production costs by operating their production facilities at full capacity. These factors are expected to drive market growth during the forecast period.
The emergence of smart cities is the key trend in the market. The government's energy conservation and resource management initiatives are promoting the development of smart cities. Smart lighting is an important part of building smart cities because it helps save energy, has shorter switching times, and reduces costs. Intelligent lighting systems increase the energy efficiency of cities and offer practical benefits to city dwellers, such as access to information about traffic and public space.
Moreover, street lights that are widespread in cities use innovative lighting solutions that automatically implement traffic-based brightness control, remote light control, error reporting, theft prevention and tracking of street light power cords, and remote meter reading. The application of intelligent lighting can significantly save electricity, improve public lighting control systems, and save maintenance costs. Thus, the increasing development of smart cities will fuel the growth of the market during the forecast period.
The limited thermal tolerance of LEDs installed in industrial facilities is the major challenge impeding market growth. Considerable energy loss occurs in light bulbs, as most of the consumed power evaporates as heat. The light efficiency of these products in industrial also degrades when exposed to high temperatures, high humidity, and other hazardous environments common in commercial and industrial areas. They are sensitive to high temperatures, and when used in an enclosed space, they can negatively affect the light output and lifetime of the LEDs.
Additionally, these bulbs and fixtures connected to external LED drivers often fail prematurely due to high internal operating temperatures. Since the temperature in industrial and manufacturing facilities is usually high, this raises the internal temperature of the LED driver above the case temperature point (Tc). The TC point of a conductor is defined as the hottest point on its surface during use. As a result, these drivers often fail prematurely. This leads to the failure of LEDs installed in industrial premises, which hinders the growth of the market during the forecast period.
The report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the market report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Global Market Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
SMART Global Holdings Inc. - The company offers LED lighting such as XLamp Element G XEG LEDs and XLamp XM L Color Gen 2 High-Intensity LED under Cree LED.
The report also includes detailed analyses of the competitive landscape of the market and information about 15 market companies, including:
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
The market research report provides comprehensive data (region wise segment analysis), with forecasts and estimates in "USD Million" for the period 2024 to 2028, as well as historical data from 2018 to 2022 for the following segments
The market is pivotal in advancing environmental sustainability across various applications including indoor settings like residential, commercial, and office lighting, as well as outdoor environments such as street, parking lots, and landscape lighting. With support from government initiatives and regulations promoting energy efficiency, LED technology has transformed lighting solutions by outperforming traditional inefficient lighting systems like CFL and halogen lights in energy savings and strong illumination. LED manufacturers are innovating with products tailored for healthcare facilities, offering surgical illumination, exam lights, and phototherapy devices that enhance consumer safety and energy use efficiency in the medical device sector. The market's expansion into smart city initiatives and building automation systems underscores its versatility and ability to integrate with Wi-Fi and Light Fidelity (Li-Fi) technologies, positioning LED lighting as a cornerstone of modern architectural, commercial, and residential infrastructure.
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Market Scope |
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Report Coverage |
Details |
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Page number |
169 |
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Base year |
2023 |
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Historic period |
2018 - 2022 |
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Forecast period |
2024-2028 |
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Growth momentum & CAGR |
Accelerate at a CAGR of 8.08% |
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Market growth 2024-2028 |
USD 41.5 billion |
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Market structure |
Fragmented |
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YoY growth 2023-2024(%) |
7.32 |
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Regional analysis |
APAC, Europe, North America, Middle East and Africa, and South America |
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Performing market contribution |
APAC at 42% |
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Key countries |
US, China, Japan, Germany, and UK |
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Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
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Key companies profiled |
Acuity Brands Inc., ams OSRAM AG, Bridgelux Inc., Dialight Plc, Digital Lumens Inc., Eaton Corp. Plc, Ennostar Inc., General Electric Co., GrowRay Lighting Technologies, Hubbell Inc., IDEAL INDUSTRIES Inc., Koninklijke Philips N.V., LSI Industries Inc., Lumileds Holding BV, OSRAM Licht AG, Panasonic Holdings Corp., Sharp Corp., Signify NV, SMART Global Holdings Inc., and Toyoda Gosei Co. Ltd. |
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Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, Market growth and Forecasting, COVID 19 impact and recovery analysis and future consumer dynamics, Market condition analysis for the market forecast period |
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Customization purview |
If our market forecasting report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Application
7 Market Segmentation by Product
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Opportunity/Restraints
11 Competitive Landscape
12 Competitive Analysis
13 Appendix
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