LED Light Engine Market Size, Share & Trends Analysis Report By Product Type (Lamp, Luminaire), By Installation Type (New Installation, Retrofit Installation), By Application (Indoor, Outdoor), By End-Use (Residential, Commercial, Industrial), By Sales Channel (Direct Sales, Indirect Sales), By Power Range (Low power (<10W), Medium power (10-100W), High power (>100W)), By Connectivity (Wired, Wireless) and By Region(North America, Europe, APAC, Middle East and Africa, LATAM) Forecasts, 2022-2030

Market Overview

The global LED light engine market size was valued at USD 29,708 million in 2021, presumed to reach USD 80,728 million, expanding at a CAGR of 13.31% during the forecast period.

An integrated assembly known as the LED light engine (LLE) is made up of one or more LED arrays (modules) or light-emitting diodes (LEDs), as well as an LED driver and additional optical, mechanical, thermal, and electrical components. It is a cutting-edge lighting innovation with greater longevity and efficiency. The LED light engine is a luminaire's primary component. Since the LED light engine is directly connected to alternating current or AC power, it does not need an AC/DC transformer like conventional LEDs.

The LED light engine market is expanding primarily due to quick urbanization, infrastructure development, falling LED prices, and the rise of government-run programs to embrace energy-efficient lighting systems. Additionally, the market is expected to increase rapidly throughout the forecast period due to the enormous advantages of LED technology over conventional lighting technology and the growing use of LEDs as general illumination sources. These light engines can be used in place of regular bulbs. On the other hand, throughout the forecast period, it is anticipated that incorporating wireless technology into LED lighting systems and launching cutting-edge LED light engine products would generate attractive growth prospects for the market.

Market Dynamics

Global LED Light Engine Market Drivers

• The Increasing Urbanization Pace and Infrastructural Development 

Globally, there has been a rapid urbanization trend, particularly in several growing economies like China and India. As a result, there is an increase in the need for new luminaires and lamps installed in several homes, raising the market demand for LED light engines. In addition, there is a significant increase in urban middle-class people, who are expected to make up more than 75% of the middle-class population in 2022. China, for instance, had around 57% of its population living in urban areas in 2017. The market for LED light engines is expanding due to the rise in demand for high-class residential communities and luxurious homes. Additionally, urbanization has facilitated a significant increase in infrastructure construction, which is expected to increase demand for lighting systems further and propel the market for LED light engines.

• The Reduced LED Prices

The price of LED bulbs has been falling over the past few years, a development appreciated by both customers and environmentalists. The cost of generating LED lamps has decreased thanks to recent technological advancements, which have also increased LEDs' efficiency and operational life. Additionally, during the past few years, the price of LED lighting equipment has fallen dramatically due to intense rivalry among LED lighting makers. For instance, the average cost of 60-watt equivalent LED goods fell from roughly USD 45–50 in January 2011 to under USD 10 by July 2018, according to data from LEDinside, between January 2011 and July 2018. Therefore, the market for LED light engines is growing due to the sharp decline in the price of LED lamps.

Global LED Light Engine Market Restraints

• The Awareness Among Consumers

When selecting a lighting system, the price is frequently the deciding factor. Due to ignorance regarding the installation costs of LED light engines, only approximately half of the world's nations have started a phase-out of inadequate lighting. Most of these are developing countries and emerging economies. Additionally, one of the problems limiting market expansion in such nations is a lack of technological capabilities, expertise, and financial resources. This creates the LED light engine market from expanding. 

Global LED Light Engine Market Opportunities

• The Integration of Wireless Technology and Emergence of Innovative Products

Lighting has been incorporated into the Internet of Things thanks to the fast adoption of LEDs. Systems for lighting that are Internet of Things (IoT) enabled must have wireless connectivity. Wireless connectivity, which combines automatic lighting control with wireless networking, gives LED lighting its smart and intelligent nature. The market for LED light engines is expected to benefit from this trend of wireless technology integration in LED lighting systems. The market expansion is facilitated by introducing novel LED light engine goods. In 2019, Innovations in Optics, Inc., a U.S. maker of high-power LED light sources, unveiled LumiBright UV-LED Light Engines, a powerful solid-state source used for photocuring coatings and adhesives and photo-masking photolithography exposure systems.

Regional Analysis

The region-wise segmentation of the global LED light engine market includes North America, Europe, Asia-Pacific, and LAMEA.

North America and the Asia Pacific will Dominate the Regional Market

North America will command the market with the largest share while expanding at a CAGR of 11.41%. Due to the massive demand from commercial and residential locations throughout states like Florida, Georgia, and North and South Carolina, the U.S. is the leader in growth in North America. The region's demand for LED light engines is also fueled by elements like strict government rules relating to energy saving, an increase in automation in smart homes and buildings, and several well-known organizations. A higher rate of LED light engine adoption has also been observed in this region due to the rapid improvement of technology and several government programs promoting the use of LED light engines.

According to the International Trade Association, the United States has a substantial market share of 50% for semiconductors. Additionally, it is a significant exporter, having exported almost 80% of all semiconductor and electronics goods made in the nation. The U.S. market for LED light engines is increasing due to this aspect. Additionally, the market participants in this nation are consistently launching cutting-edge items on the market, offering even more profitable growth chances for the industry. This also significantly contributes to the North American market expansion. 

The Asia Pacific will expand at a CAGR of 16.21% and hold USD 26,508 million. The expansion of the LED light engine market is primarily driven by the acceleration of industrialization and urbanization, as well as the increase in investments aimed at constructing new infrastructure throughout Asia-Pacific developing nations. In this region, the need for LED light engine devices is growing exponentially, and India, China, Japan, and other Southeast Asian countries have a big part to play in that. Furthermore, 2.1 million LED lights were erected in India in 2017 as part of the government of India's Street Light National Program. The region's market for LED light engines is anticipated to grow due to such initiatives. Also expected is that within the projected period, China's and India's growing populations and an increase in the adoption of LEDs will significantly impact the market's expansion.

Segmental Analysis

The global LED light engine market is classified based on product type, installation type, application, end-user, and region. 

On The Basis of Product Type

Based on the product type, the segments are lamp and luminaire.

The luminaire section is projected to advance at a CAGR of 12.31% and hold the largest market share. In the market for LED light engines, a luminaire is a complete lighting unit made up of one or more lamps, a socket, and other components that hold and shield the lamps. The expansion of the construction sector is driving massive demand for luminaires. The need for adequate lighting solutions is also fueled by the rising industrialization and urbanization of the world, propelling the growth of the luminaire market for LED light engines. Consumer awareness of energy conservation and installing lighting systems with high energy efficiency is increasing, strengthening the category.

The lamp section will hold the second-largest market share. Built-in light engines in LED lamps are helpful for various purposes in residential, commercial, and industrial settings. The lamp segment growth of the LED light engine market is primarily driven by increased progress in the area of energy-efficient lighting systems. The advantages of luminosity, energy efficiency, consistency, durability, and control make LED lamps with built-in light engines quite popular.

On The Basis of Installation Type

Based on the installation type, the segments are new installation and retrofit installation.

The retrofit installation section is projected to advance at a CAGR of 14.61% and hold the largest market share. An existing fixture is converted to an LED lighting fixture during a retrofit installation. It substitutes the lighting systems in part. The energy-saving LED light replacement trend, which is on the rise, is fueling the expansion of the retrofit installation market. Due to their advantages, such as a more extended operational period and fewer energy usage, LED bulbs are quickly replacing the older generation lamps in fixtures.

The new installation section will hold the second-largest market share. By gradually replacing the previous lighting system's bulbs, fixtures, and various controllers with LED lamps, institutions, and controls, the new installation replaces the old one. Additionally, the development in the number of buildings around the world increases the demand for efficient lighting solutions, which is anticipated to drive the market growth for new installations of LED light engines.

On The Basis of Application

Based on the application, the segments are indoor and outdoor.

The indoor section is projected to advance at a CAGR of 12.12% and hold the largest market share. It includes residential, commercial, and industrial indoor LED light engine applications. The demand for more aesthetically pleasing lighting for the human eyes in homes, offices, and commercial areas is a major factor in this market's expansion. Additionally, a significant sub-segment of the indoor lighting market—residential buildings—is anticipated to have enormous growth potential in the years to come. Further, because of government rules requiring energy conservation, several nations worldwide are predicted to use energy-efficient lighting systems in residential applications.

The outdoor section will hold the second-largest market share. It includes exterior LED light engine applications for buildings, public spaces, and roads. IoT-based lighting solutions are now in use due to the growth of smart cities. The infiltration of LEDs as a source of light in outdoor lighting applications like highways & roadways, bridges & tunnels, airports, and architectural and public places are the main factors driving the growth of the outdoor applications segment of the LED light engine market.

On The Basis of End-Use

Based on end-use, the segments are residential, commercial, and industrial.

The commercial section is projected to advance at a CAGR of 11.91% and hold the largest market share. The commercial section includes LED light engines in commercial spaces or structures, including hotels, hospitals, office buildings, government, and private offices, malls, gas stations and restaurants, and retail stores. The expansion of this market is driven by increased urbanization and the construction of new commercial complexes, including malls, offices, hotels, retail stores, showrooms, and restaurants. Additionally, the commercial lighting industry has seen penetration of LED lighting products thanks to recent developments in light-emitting diode technology, which offers enormous growth potential.

The residential section will hold the second-largest share. This section focuses on using LED light engines in homes or other structures for residential purposes. Land utilized as a permanent dwelling or domicile, such as a house, nursing home, apartment, school, daycare center, or prison, is included in the residential areas. The expansion of this segment is driven by the global increase in both urbanization and the number of smart cities.

Impact of covid-19

COVID-19 has positive and negative market consequences, as carbon emissions have decreased globally due to the lockout. COVID-19's reduction in emissions is a short-term benefit. Still, when industries and enterprises attempt to recoup some of their financial losses in the first quarter of the year, carbon emissions will rise dramatically. COVID-19 had a negative impact on global recycling efforts. Countries, notably the United States, have halted or decreased recycling programs to focus on collecting additional domestic waste or because services have been disrupted by the virus.

Also, with industries slowly returning to normalcy following the COVID-19 outbreak, this shift in workplace health and safety is expected to increase due to mandatory social distancing and continuous personal care through sanitization to eliminate even the tiniest possibility of COVID-19 spread. COVID-19 has impacted various companies' revenues, and if the lockdown is lifted, companies will turn their attention to operations to make up for their losses.

Recent Developments

• In 2022, Acuity Brands, Inc. revealed a new program to introduce scannable QR code instructions to minimize paper use by more than 15 million sheets and preserve an estimated 1,500 trees annually.
• In 2022, Acuity Brands, Inc. expanded the footprint of its partnership with Microsoft to add additional features to the building automation, smart lighting, and lighting controls offered by Acuity Brands.