Market Insight

RESEARCH NOTE - Growth of LED luminaire shipments help LED power supply market reach $13.1 billion by 2021

April 05, 2017

Victoria Fodale Victoria Fodale Senior Analyst, Power Supply Intelligence Service
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Following is information and insight from IHS Markit about our 2017 Power in LED report, which contains data and analysis for the year ended December 31, 2016.

Highlights

  • The growth of LED luminaire shipments expected to help LED power supply market reach $13.1 billion by 2021
  • Commercial and retail applications were the largest market for LED power supplies in in 2016
  • LED power supplies, a specialty within the power supply market, typically have higher average selling prices compared to external power adapters

Our Analysis

Revenue for LED power supplies used to power LED luminaires is projected to reach $13.1 billion by 2021. IHS Technology estimates that revenue for LED power supplies reached 5.4 billion in 2016.

The market for LED power supplies is being driven by an increase in shipments projected for LED luminaires. According to IHS Technology research, LED luminaires accounted for 12.4% of total LED lighting shipments in 2016. By 2021, LED luminaires are projected to increase to 15.3% of total LED lighting shipments, growing to about 716 million units.

The market for LED luminaires varies considerably from the LED lamp market, as it is more fragmented, not as cost driven and the product designs are typically more complex. Following the trends of the end product, power supplies used in LED luminaires are also fragmented. LED power supplies often require different currents and voltages, depending on lighting and regional requirements. This fragmentation make it challenging for suppliers of LED power supplies to offer standardized products and maintain margins for profitability.

Cost savings drives growth of commercial/retail applications

Commercial and retail applications were the largest market for LED luminaires, accounting for 44.5% of the total LED luminaire market. IHS Technology predicts that this percentage will increase to 54% by 2021. LED luminaires are gaining traction in commercial and retail applications as businesses look to save energy costs by using LED lighting instead of fluorescent lighting.

Drivers for retail penetration of LED luminaires

Penetration of LED lighting penetration in retail applications is higher than other in other commercial applications. There are two primary reasons for this: Luminaire form factors and overall lighting costs.

  • Some luminaire form factors are particularly suitable for retail such as track/accent/spot lights, which offer directional light at a higher light intensity than other lighting technologies
  • Lighting accounts for a far higher proportion of a retail facility’s energy bill than in other applications. As a result, it is easier to show end customers the benefit of upgrading their lighting system to LED lighting

LED power supplies vs external power adapters

LED power supplies are a specialty within the power supply market. They are used to keep the voltage and current flowing through an LED circuit at its rated level. Because of the complexity related to integration in the luminaire, LED power supplies they have higher average selling prices compared to external power adapters. For example, the ASP for an external power adapter used to power a desk lamp with a replaceable LED bulb was about $2 in 2016. In comparison, the ASP for an LED power supply used for a luminaire task light was about $17 in 2016.

The Power in LED Lighting report is published in the IHS Power Supply Intelligence Service. For more information, contact us.

Geography
Global
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