LED Phosphor Market

Market Overview

The global LED phosphor market size was valued at USD 1.2 billion in 2023 and is projected to reach USD 8.7 billion by 2032, registering a CAGR of 22% during the forecast period (2024-2032). The increasing favoritism towards LED lighting technologies over traditional lighting systems drives market growth. 

LED phosphor is a luminescent substance that can absorb the energy emitted by violet and blue light from LED chips, such as gallium nitride, and convert it into visible light. An LED's efficiency, light quality, and stability are determined mainly by its phosphor composition. White LEDs typically have a blue light-emitting indium gallium nitride die and phosphor. The phosphor turns the blue light into a broad-spectrum light that peaks at yellow or amber. 

The increasing popularity of white LEDs has significantly boosted the LED phosphors market. Moreover, the automotive industry is projected to expand due to the growing emphasis on automotive lighting manufacturing various components. In recent years, there has been a significant increase in the need for automobile headlights to meet high-performance standards, particularly in their ability to withstand intense heat and light. LED phosphor technology digitizes vehicle headlights, creating new features like advanced driving beam (ADB). The rising demand for a wide range of colors for headlights and the rapid development in automobile production is expected to drive the demand for LED phosphors in the automotive industry in the forecast period.

Highlights

• Silicate phosphor generates the highest revenue share based on product type.
• General Lighting accounts for the largest market share by application.

Market Dynamics

Global LED Phosphor Market Drivers

Demand for LED Phosphors within the Automotive Industry 

The automotive industry is expected to grow due to increased focus on automotive lighting for different parts of automobiles. Over the years, there has been a notable rise in performance demands, specifically with the intense heat and light properties of the latest automotive headlight designs. 

Additionally, LED phosphor technology enables the digitalization of vehicle headlights, introducing new features such as advanced driving beam (ADB). Adaptive LED headlights autonomously adapt light beams based on prevailing conditions without requiring any action from the driver. They offer improved visibility by lowering glare by up to 90% compared to regular high beams. Segmented LEDs provide accurate manipulation of beam width, intensity, and angle. This allows lights to illuminate possible dangers ahead without causing glare when approaching vehicles. During inclement weather conditions, adaptable LEDs automatically adapt to counteract the decreased visibility caused by rain, fog, and snow. This automation enhances safety by constantly improving driver visibility.

Moreover, the Increasing need for a wide range of color options in headlights and the growing production of automobiles is expected to drive the demand for LED phosphors in the automotive industry in the projected timeframe.

Government Regulations

The market demand in certain regions is accelerated by government rules requiring LEDs. In January 2023, the United Kingdom suggested raising the minimum energy efficiency requirement for lighting to the most elevated standard globally, reaching 120 Lumens per Watt (lm/W) in 2023 and 140 lm/W in 2027.   In July 2022, the East African Community (EAC) implemented a standardized quality and performance standard that will gradually replace traditional and fluorescent lamps with LED lamps.  On 24 May 2023, South Africa released new regulations mandating that all General Service Lamps (GSLs) must achieve a minimum efficiency of 90 lm/W.  

Similarly, the legal requirement for energy efficiency in standard light bulbs in the United States is 45 lumens per watt. A 60-watt incandescent light bulb typically produces around 15 lumens per watt, while a halogen incandescent bulb offers around 20 lumens per watt. Compact fluorescent (CFL) bulbs provide 65 lumens per watt, while LEDs can produce 80 to 100 lumens per watt using significantly less energy. These regulations stimulate market expansion. 

Global LED Phosphor Market Restraints

High Cost of Smart Lighting Hardware Components

During the development of phosphors LED innovative lighting hardware components, an extra expense is linked to this aspect of the project. Despite the decreasing cost of hardware components in recent years, it remains a crucial aspect in determining the overall price of the smart lighting project. Within a smart lighting ecosystem, the hardware comprises various essential components, which may be improved by including other elements like light sources and sensors. The development of the backend component of the smart lighting system requires a minimum of 2,000 hours of collaborative effort and has a starting price of USD 60,000. 

Moreover, LED phosphors entail significant upfront expenses for manufacturers due to the need for specialized equipment and intricate manufacturing processes. Moreover, developing new phosphor formulations and technologies incurs considerable research and development expenses, negatively impacting profit margins and hindering industry growth.

Global LED Phosphor Market Opportunity

Increase in Research and Development and Production of Smartphones

The market is expected to expand as the demand for premium smartphones surpasses that of mid-range and low-end devices. Lower-cost devices are being enhanced with premium features such as multi-lens front or rear cameras, bezel-less displays, and huge batteries. It would have an impact on the expansion of the market. Displays have undergone rapid advancements over the past five years. OLED technology has become the dominant smartphone display technology, with leading phone manufacturers offering OLED devices. Manufacturers in the smartphone display market will continue prioritizing research and development (R&D). Players in the smartphone display industry commonly utilize research and development as critical tactics. These efforts have a dual focus: enhancing current products and creating novel ones.

Furthermore, the increase in the manufacturing of smartphones is anticipated to propel the analyzed market. Ericsson reported that the global number of smartphone subscriptions exceeded six billion in 2022. There is expected to be an increase of several hundred million in the upcoming years. China, India, and the United States are the countries with the most significant number of smartphone users. 

Regional Analysis

Asia-Pacific Dominates the Global Market

The global LED phosphor market analysis is conducted across North America, Europe, Asia-Pacific, the Middle East and Africa, and Latin America.

Asia-Pacific is the most significant global LED phosphor market shareholder and is estimated to grow at a CAGR of 22.3% over the forecast period. The growth can be attributed to the increasing demand for consumer electronics such as LED lights, LCD TVs and displays, and portable PCs. The industry is expected to be propelled by the government's growing assistance in offering cost-effective land to foreign enterprises aiming to establish LED manufacturing facilities in the area. Moreover, numerous legislations have been enacted to promote energy-efficient lighting devices, stimulating the expansion of the Phosphor LED Market.

Additionally, India is a rapidly growing worldwide market. The government's efforts to enhance infrastructure and expand the building industry drive the demand for energy-efficient lighting solutions nationwide. In June 2022, the Indian government declared the names of 15 PLI 2.0 white goods program recipients. Adani Copper Tubes, LG Electronics, and Wipro Enterprises are among the selected companies. Nine companies will focus on LED light components with a financial commitment of INR 4.6 billion. Consequently, India manufactures several items, such as LED chip packaging, LED engines, LED light management systems, LED drivers, and metalized capacitor films. These products would play a crucial role in pushing the market in the studied region.

North America is anticipated to exhibit a CAGR of 22.5% over the forecast period. The regional growth is due to the rising implementation of energy-efficient lighting solutions and the increasing need for LED lighting in numerous applications. The growing demand for high-quality lighting solutions in the vehicle industry, where LED lighting is rapidly becoming the industry norm, also drives the region's demand for LED phosphors. Moreover, the growth of the smart home and Internet of Things (IoT) industries is expected to increase the need for LED lighting solutions in residential areas, leading to an increase in revenue in the LED phosphor market in the region. Manufacturers in the region are investing prominently in research and development to enhance the performance and efficiency of their LED products. They are also focusing on developing innovative and cost-effective LED phosphors.

Europe is expected to develop at a significant rate. The increasing need for energy-efficient lighting solutions in the automotive, residential, and commercial sectors fuels the region's need for LED phosphors. The food and beverage, automotive, and pharmaceutical industries drive the region's demand for top-notch LED lighting solutions. The food and beverage business in the United Kingdom is constantly evolving, and LED lighting solutions are rapidly becoming a vital part of the industry's operations, driving revenue growth in the region's LED phosphor market. Moreover, prominent LED manufacturers in nations like Germany and France are expected to propel the development of the LED phosphor market in the area.

Segmental Analysis

The global LED phosphor market is segmented based on type and application. 

The market is segmented based on type into Nitride Phosphor, Silicate Phosphor, Oxide Phosphor, and Others.

The silicate phosphor segment dominated the market. This results from the growing need for LED lighting systems in several residential, commercial, and industrial sectors. Silicate phosphors exhibit superior luminous efficacy, color rendering index (CRI), and thermal stability compared to other phosphor types, rendering them very suitable for integration into high-performance LED lighting systems. Moreover, the increasing adoption of LED lighting systems in automotive lighting and backlighting applications in electronic devices is expected to drive the demand for silicate phosphors in the foreseeable future.

The nitride phosphor segment is the fastest growing. The increasing utilization of nitride phosphors in outdoor lighting applications, like parking lot illumination, street lighting, and stadium lighting, is fueling the growth of this sector. Nitride phosphors have superior efficiency, color stability, and longevity, making them highly suitable for incorporation into high-performance LED lighting systems. Moreover, the increasing need for energy-efficient lighting systems and the heightened focus on reducing carbon emissions is expected to boost the market for nitride phosphors in the foreseeable future.

The oxide phosphor segment is also expected to increase considerably. This results from the increasing utilization of LED lighting systems in the horticulture sector to enhance plant growth and development. Oxide phosphors possess several advantages compared to other phosphors, such as a high color rendering index (CRI), robust temperature stability, and a high photosynthetic photon flux (PPF). These qualities make them well-suited for utilization in horticulture lighting systems. Moreover, the increasing adoption of LED lighting systems in retail, architectural, and museum lighting applications is expected to drive the need for oxide phosphors during the projected period.

The market is segmented based on application into General Lighting, Backlighting, Automotive Lighting, and Other Applications.

The general lighting segment dominated the market in 2023. The primary factors behind the growth of the general lighting industry are the rising need for energy-efficient lighting solutions and the aim to mitigate carbon emissions. LED lighting is widely recognized as one of the most energy-efficient lighting solutions available. Its extended lifespan, little upkeep requirements, and exceptional resilience make it a superb option for general illumination in residential areas, workplaces, and public environments.

The automotive lighting segment is the fastest growing. The increasing need for sophisticated lighting solutions in the automobile sector, including adaptive lighting, ambient lighting, and rear combination lamps, is driving the growth of the LED phosphor market in the automotive lighting segment. LED lighting in automotive applications offers several advantages compared to traditional lighting solutions, such as enhanced energy economy, extended lifespan, and reduced maintenance expenses.

Due to the growing use of LED backlighting in a broad range of electronic products, including televisions, laptops, and smartphones, the backlighting industry is expected to experience a substantial increase. LED backlighting has several benefits, such as high luminosity, little energy usage, and an extended lifespan, making it an ideal option for illuminated applications.

Recent Developments

• January 2024– Samsung Electronics unveiled its newest range of QLED, MICRO LED, OLED, and Lifestyle displays in anticipation of CES® 2024. The announcement also marked the beginning of the AI screen era by introducing a cutting-edge AI processor to revolutionize how we perceive the possibilities of smart displays.
• January 2024 – GE Lighting, a subsidiary of Savant, maintained its reputation for excellence and originality by introducing another groundbreaking Cync® smart home breakthrough and unveiling significant improvements to the Cync product line at CES 2024.
• January 2024 – Nichia, the leading global manufacturer of LEDs and the creator of the high-intensity blue and white LED, successfully brought to market a chip-scale LED (Part No. NFSWL11A-D6) that achieves a wide horizontal light dispersion. The NFSWL11A-D6 is a white LED that achieves horizontal light distribution by integrating Nichia's extensive knowledge and advanced technology in phosphors and LEDs developed over a long period.