Industrial LED Market

Market Overview

The global industrial LED market size was valued at USD 12,102.9 million in 2022. It is estimated to reach USD 47,270.6 million by 2031, growing at a CAGR of 17.4% during the forecast period (2023–2031).

The light emitted by the filament inside an incandescent light bulb results from the electrical energy getting converted into heat energy eventually converted into light energy. A light-emitting diode (LED) is a semiconductor light source that directly transforms electrical energy into light energy. Instead of incandescent light sources, these devices are frequently used in lamps. Industrial LED is a factory lighting system requiring great illumination and energy efficiency. Industrial LEDs also help prevent workplace mishaps by helping identify unsafe or hazardous working conditions and providing an illumination source for workers to conduct daily activities.

Industrial LED can be used in various settings, including loading docks, cold storage, outdoor areas, offices, task lighting, and manufacturing floors. Industrial lighting has several benefits, such as ease of retrofitting, increased efficiency, less maintenance, better durability, even coverage, unequaled controllability, improved light quality, and a safer atmosphere.

Highlights

• LED fixture dominates the product type segment
• Indoor lighting dominates the application segment
• The oil and gas industry dominates the industry verticals segment
• Asia-Pacific is the highest shareholder in the global market

Market Dynamics

Global Industrial LED Market Drivers

High Demand for Cost-Effective and Energy-Saving LED Lighting

Lighting consumes approximately 15 percent of the total energy produced in the world. Moreover, about 5% of the world's carbon emissions come from lighting. In order to lower carbon emissions, the United Nations Environment Programme (UNEP) has published some advice on energy-efficient lighting options. Over the next two decades, the lighting sector is anticipated to develop tremendously due to fast urbanization and economic expansion, creating a strong demand for LED-based lighting. Consequently, the demand for more LED-based lighting to achieve high cost and energy savings is anticipated to propel market expansion in the future.

Government Campaign Toward LED Adoption and Surge in Need to Replace Traditional Lighting

Governments from various countries have focused on deploying LED technology-based lights to curb cost and pollution. The global market is expanding because of different nations' favorable attitudes toward adopting LED technology. For instance, multiple test labs have been developed in India to overcome the lack of national testing facilities, facilities for testing, and recognized laboratories. In addition, the Indian Government has curtailed VAT to promote LED technology adoption. Similarly, the German Government provides subsidies to municipalities to replace lighting in publicly owned facilities, such as old street lighting, with new LED technology. Thus, all these factors significantly contribute to the growth of the global market.

Additionally, conventional lighting consumes high energy and requires a glass bulb to contain essential coatings and gases. For instance, fluorescent lamps generate light using a gas discharge to excite phosphors; high-intensity discharge (HID) lamps utilize an electric arc discharge, while incandescent lamps rely on a heated filament to emit light. In the case of an LED, it can directly convert electrical energy into light energy, which characterizes it with less power consumption and higher reliability. Moreover, LEDs are now much more efficient than traditional lighting due to features like their exceptionally small and compact size and long-lasting resilience, which is predicted to boost the demand for industrial LEDs during the projection period.

Global Industrial LED Market Restraint

Voltage Sensitivity and Temperature Dependence

The performance of an LED majorly depends upon the temperature of the operating environment. Overdriving an LED in high ambient temperature conditions leads to overheating the overall LED package, resulting in device failure. The problem arises in automotive, medical, and military applications where LEDs are expected to operate over large temperature ranges with a minimum failure rate. LEDs should also be supplied with voltages over the threshold and currents below the rating because they are voltage sensitive. These factors limit the adoption of LEDs, thereby hampering the market's growth.

Global Industrial LED Market Opportunities

Surge in Adoption of Smart Lighting Technology

Creating smart cities is projected to gain a lot of momentum thanks to smart lighting solutions. Using smart lighting to overcome issues with sustainable development creates ample opportunities for the industrial LED market. The "smart cities" market was estimated to be worth USD 517.63 billion in 2017 and is anticipated to grow to USD 2,402.12 billion by 2025, with a CAGR of 21.28% between 2018 and 2025. Governments have played a crucial role in the smart cities market through their regulations and initiatives focused on deploying smart services as a major part of their infrastructure. In addition, government regulations for implementing smart cities, supported by the adoption of new technologies that support Industry 4.0, smart energy initiatives, e-governance solutions, and the need for enhanced quality of life, are estimated to act as the main opportunities for the market's growth.

Regional Analysis

Based on region, the global industrial LED market is bifurcated into North America, Europe, Asia-Pacific, and LAMEA.

Asia-Pacific Dominates the Global Market

Asia-Pacific is the most significant global industrial LED market shareholder and is estimated to exhibit a CAGR of 17.5% during the forecast period. Asia-Pacific is one the fastest regions toward the adoption of advanced technology. Emerging countries in the Asia-Pacific region, like China and India, are the nations with the highest market shares for industrial LEDs are Japan and Australia. Government rules and policies dominate the Asia-Pacific industrial LED market, promoting long-term investments in the industry. In addition, technological development in the LED market in Asia-Pacific boosts the industry's growth. Characteristics of LEDs such as long durability, reliability, and compact and robust nature fuels the market growth. Similarly, the surge in demand for low-power consumption lighting solutions creates ample opportunities for the prominent players operating in the market.

Europe is estimated to exhibit a CAGR of 15.8% over the forecast period. LED features such as sustainability, lower emissions, and lower energy consumption drive the growth of the European market. Similarly, the supply of low-tech components from developing countries for manufacturing high-tech solutions is expected to present lucrative opportunities for market expansion. Consumers in Europe have shifted their preference from traditional to more ecological lighting sources, with Germany being the dominant country. In addition, major applications of LEDs include automotive, street lighting, and backlighting. The European streetlight market is a limited competition with limited products and a fairly stable supply chain. Features such as sustainability, lower emissions, and lower energy consumption drive the growth of the European market. Furthermore, the supply of low-tech components from developing countries for manufacturing high-tech solutions presents lucrative opportunities for market expansion. Developing smart cities and smart infrastructures across the region propels market growth.

North America LED market is driven by a growing demand for energy-efficient lighting systems and the growing adoption of LED lights in the building automation system. Light-emitting diodes are currently being used in various digital lamps. North America is among the highest revenue contributors to the global industrial LED market, owing to innovations, technological advancements, and investments in the respective industry. In addition, an increase in demand for smart lighting solutions is expected to offer lucrative opportunities for the industrial and LED market growth. Likewise, increased awareness about lighting technologies decreased lighting costs, and increased energy efficiency supplemented the market growth.

In LAMEA, the market is analyzed across Latin America, the Middle East, and Africa. The adoption rate of advanced systems and solutions in various industry verticals is comparatively slow in LAMEA. This region accounts for the smallest share of the industrial LED market. However, it is anticipated to witness a high growth rate during the forecast period. The inclination toward advanced technological products, increase in investments in the various industry verticals, and surge in R&D facilities drive the growth of the LAMEA industrial LED market. LEDs' lower power consumption and high brightness are anticipated to increase their adoption during the forecast period. Furthermore, manufacturing low-cost, high-performance LEDs with production technology innovations is a major opportunity for market expansion.

Segmental Analysis

The global industrial LED market is bifurcated into product type, application, and industry verticals.

Based on product type, the global industrial LED market is bifurcated into LED lamps and LED fixtures. 

The LED fixtures segment dominates the global market and is predicted to grow at a CAGR of 18.8% over the forecast period. The light, LED fixture, or light fitting is a piece of electrical equipment that includes an illumination-producing electric lamp. The LED light fixture is versatile and flexible, as it can be used virtually in any residential or commercial area. LED fixtures have the longest life rating and offer the best visual lighting. These may last up to 100,000 hours. Further, initial cost involvement is high for the fixture market; however, various new projects opt for LED fixtures for lighting.

LED lamp or LED bulb is an electric light used in fixtures of lights, which produces the light using one or more LEDs. The lifespan of LED lamps is longer than equivalent incandescent lamps and significantly more efficient than fluorescent lamps. Modern LED lamps are equipped with new LED filaments in high-quality glass design. Lamps are available in different socket sizes, shapes, wattages, or light temperatures. The LED lamp lasts between 30,000 and 50,000 hours. The researcher predicts that replacing traditional lighting with LED lamps across all the industry verticals would minimize more than 50% of energy consumption, thus reducing around 735 million tons of carbon emission annually.

Based on application, the global industrial LED market is bifurcated into indoor lighting and outdoor lighting. 

The indoor lighting segment owns the highest market share and is predicted to exhibit a CAGR of 16.1% over the forecast period. Indoor lighting help create a perfect work environment during work time, boost productivity, and reduce employee fatigue and frustration. Indoor LED lights generate light with a diode instead of a fuel source. An indoor LED consists of lighting within the premises, such as schools, offices, supermarkets, commercial complexes, shops, hotels, sports halls, warehouses, car parking, etc. In addition, wall lights, luminaries, reflectors with LED lighting, and spotlights are the different sectors of indoor lighting. Flexible design, energy efficiency, and prolonged durability of LEDs drive the demand for indoor LED systems. Furthermore, the faster adoption rate of LEDs in indoor lighting applications presents a major growth opportunity for market expansion.

Outdoor LED lighting provides extended lifespans, less maintenance, and conserving energy, thus offering an environment-friendly solution. Most traditional outdoor LEDs take time to warm up and achieve full brightness. Outdoor lighting consists of lighting in open areas rather than indoors, such as street lighting, architecture, security, amenity, transportation, sports facilities, etc. The surge in the need for the longer service life of light panels/bulbs and brighter light in outdoor applications is expected to fuel the market growth. In addition, LEDs consume less energy than traditional lighting systems, which supplements the market's growth. Furthermore, reduced device failure rate in high ambient temperatures will offer ample opportunities to key players.

Based on industry verticals, the global industrial LED market is divided into oil and gas, mining, pharmaceutical, manufacturing, and others. 

The oil and gas segment is the most significant contributor to the market and is anticipated to grow at a CAGR of 14.0% over the forecast period. LED lighting is important for the oil and gas industry, especially for locations with a high risk of explosion. In addition, safe, efficient, and economical LEDs are vital for hazardous environments, where operating circumstances are a primary challenge in the oil and gas industry. LEDs can be used in various industrial fields, including manufacturing, oil and gas, and pharmaceuticals. The use of LED lighting solutions is boosted by design flexibility, dependability, reduced power consumption, and increased light versatility across various industries. Moreover, LEDs' exceptional and dependable performance at room temperature presents a wealth of growth prospects for the market.

The pharmaceutical industry requires precise LED solutions for laboratories and clean rooms. This LED lighting needs to be chosen and fitted precisely for its specific purpose in this industry. In addition, avoiding any contagious microbes is among the major contributors to the need for cleanrooms in this industry. The need for a controlled manufacturing environment imposing control over the attention of airborne particles, temperature, humidity, and microorganisms in the pharmaceutical industry boosts the number of cleanrooms in this industry. The demand for industrial LEDs is anticipated to rise over the forecast period because of the expansion of cleanrooms in the pharmaceutical industry.

Recent Developments

• March 2023- Cree LED introduced new J Series 5050C E Class LEDs for directional lighting applications with groundbreaking light output, high efficacy, and extended lifetimes.

• March 2023- Dialight (LSE: DIA), the world leader in hazardous and industrial LED lighting innovation, introduced a seven-year warranty for its Obstruction Lighting Solutions. When installed by Certified Installation companies, Dialight's Aviation Obstruction Illumination Systems include an additional two years of full system warranty and the standard five-year warranty.