The Total Addressable Market (TAM) for Solid-State Lighting was valued at USD 44.02 billion in 2022. It is expected to reach USD 120.12 billion by 2031, growing at a CAGR of 11.80% during the forecast period (2023–2031). Semiconductors used in solid-state lighting are used to convert electricity into light. Electroluminescence, a phenomenon where a specially formulated semiconductor diode glows when an electric current is passed through it, is how a solid-state lighting device produces visible light. Solid-state lighting is utilized in various applications due to its many advantages, including its long lifespan, improved light output, inherent safety, compact design, and high durability. Organic light-emitting diodes (OLEDs), LEDs, and light-emitting polymers are examples of solid-state lighting applications. In contrast to incandescent or fluorescent lighting, which produces light using filaments and gases inside a glass bulb, solid-state lighting uses semiconductors.
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Rising Government-Supported Industry Consortiums
The emergence of efficient solid-state lighting has brought about a paradigm shift in lighting technology. Energy conservation was one of the original government-sponsored industry consortia's founding principles in Europe, Japan, South Korea, and Taiwan. In addition, some consortiums, including the Open Connectivity Foundation, the TALQ Consortium, oneM2M, Bluetooth SIG, the Industrial Internet Consortium, and the Zigbee, are working cooperatively to establish typical specifications and standards to support interoperability among various solid-state lighting products. As a result, the market is rising due to increased government-sponsored industry consortiums.
Unique Technical Features
Solid-state lighting offers impressive technical features that improve on the ones already available. It has a small size, unidirectional light, simple controls, a cool beam, uses little energy, has excellent color, and has a long lifespan. Additionally, OLED offers utterly new form factors with a wide range of potential applications. The control compatibility of solid-state lighting further reduces energy consumption through dimming techniques, which drives the market growth over the forecast period.
Control Compatibility Issues
Lighting controls include aspects such as dimming, color control, and occupancy controls. The choice of compatible drivers for solid-state luminaries presents a challenge for designers because the current solid-state lighting needs to work with the existing installations. Operating currents and operational characteristics vary between drivers. Luminaries typically flicker, have shorter lives, or do not operate when a driver is incompatible. Manufacturers must develop control compatibility to reach the most extensive possible customer base.
Solid-state luminaires sold for residential use typically have an efficacy of over 100 lumens per watt, depending on the model. To achieve the goals outlined in the Sustainable Development Scenario, they must be raised to an average of 160 lumens per watt by 2030. LED efficacy is already at its highest compared to halogens (less than 20 lm/W) and compact fluorescent lights (around 60 lm/W). However, it is predicted that supporting innovations to improve the efficacy of solid-state lighting will create lucrative opportunities for market expansion.
The global solid-state lighting market is segmented by type, installation type, application, and industry vertical.
Based on type, the global market is bifurcated into LED, OLED, and PLED.
The LED segment is the highest contributor to the market and is expected to grow at a CAGR of 12% during the forecast period. A light-emitting diode (LED) semiconductor produces light when an electric current flows through it. Different band gaps in semiconductor materials result in different light colors. The exact wavelength for a given color can be tuned by modifying the composition of the light-emitting region. LEDs have steadily improved efficiency since being used as a general lighting source. More than 40% of the outdoor lighting industry and 50% of the indoor lighting industry, respectively, have adopted LED, according to the US Department of Energy. This trend is anticipated to intensify over the forecast period.
A series of organic thin films are sandwiched between two electrodes to create an organic light emitting diode (OLED), a flat light emitting technology that produces bright light using electric current. The only technology that can currently produce large-area lighting panels is OLED. Flexible, transparent, and color-tunable are all characteristics of OLED lighting panels. OLED has many uses in the automotive industry because it is more power-efficient, brighter, and thinner than LCD. Additionally, OLEDs' flexibility and transparency have enabled them to use in interior automotive applications like curved console and dashboard interfaces. Therefore, growth in the solid-state lighting market is anticipated to be aided by an increase in demand from the automotive industry during the anticipated period.
Based on installation type, the global market is bifurcated into new installation and retrofit.
The retrofit segment owns the highest market share and is expected to grow at a CAGR of 12.1% during the forecast period. Retrofitting is renovating outdated or already-existing lighting components and bulbs to increase lighting output and color temperature while generating less heat and using less energy. Retrofitting is very cost-effective for fixtures that must be upgraded to accommodate solid-state lighting technology. It is expected that the savings on energy use will quickly cover costs. The development of creative retrofit lighting adaptable to various fixtures is expected to receive investment from solid-state lighting manufacturers. This pattern enables consumers to select multiple lighting options while still using the same fixture, which is anticipated to drive the growth of the solid-state lighting market over the coming years.
New infrastructure for lighting systems and new residential or commercial construction includes new installations of solid-state lighting. The demand for new homes to accommodate the population's exponential growth represents a sizable market opportunity for solid-state lighting. Additionally, expanding existing businesses and growing new ones present lucrative opportunities for market expansion. The demand for energy-efficient lighting systems with long service lives and little maintenance is increasing due to recent public infrastructure development in various countries.
Based on application, the global market is bifurcated into indoor lighting, outdoor lighting, and specialty lighting.
The indoor lighting segment is the highest contributor to the market and is expected to grow at a CAGR of 12.2% during the forecast period. Indoor lighting refers to lighting inside buildings like offices, schools, supermarkets, shopping centers, hotels, sports arenas, and warehouses. The demand for indoor lighting systems is driven by LEDs' adaptable design, high energy efficiency, and long lifespan. According to estimates, the solid-state lighting market will proliferate due to rapid expansion in the retail and hospitality sectors. The quicker adoption of LEDs in indoor lighting applications represents a significant growth opportunity for the global market.
Outdoor lighting includes lighting in open spaces like streets, security, recreation, and other lighting. The government and electric utilities can gain significantly from improved outdoor lighting efficiency. The U.S. Department of Energy estimates that the increased use of high-efficiency street lighting will result in annual savings for communities across the nation of USD1 billion. The demand for more durable light panels and bulbs and brighter light in outdoor applications are anticipated to drive market expansion. Additionally, LEDs use less energy than conventional lighting systems, which helps the solid-state lighting market expand. It is expected that key players will have plenty of opportunities due to the decreased device failure rate in high ambient temperatures.
Based on industry verticals, the global market is bifurcated into residential, industrial and commercial, medical, and transportation.
The industrial and commercial segment owns the highest market and is expected to grow at a CAGR of 12.1% during the forecast period. Applications for the industrial and commercial sectors are now more diverse due to solid-state lighting. Customers can get the high brightness, long life, and dependability they need for industrial, harsh, and hazardous locations with today's LED technology. Due to their longer lifespan, energy savings, and equal or better light characteristics that provide years of maintenance-free operation with a quantifiable return on investment, LED light sources are becoming increasingly popular in the commercial sector. The industrial and commercial LED lighting market is anticipated to grow due to factors like the need to replace traditional lighting, the high demand for affordable and energy-efficient LED lighting, and government initiatives to promote LED adoption.
CFLs' mercury liability is a significant concern for the residential market, but this issue does not exist with solid-state lighting. A typical high-quality LED light source has a service life between 35,000 and 60,000 hours, making it last more than 18 to 30 times longer than an incandescent lamp when used in a home setting. In contrast to the less than 1,000 hours per year that the typical residential lamp is used, solid-state lighting, particularly LED light sources, have a lifespan of between 44 and 75 years. Additionally, frequent switching has no negative effects on the performance of LEDs. However, the energy used for lighting is negligible and concealed within other electric costs compared to other household expenses.
By region, the global solid-state lighting market is segmented into North America, Europe, Asia-Pacific, and LAMEA.
Asia-Pacific Dominates the Global Market
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Asia-Pacific is the most significant shareholder in the global market and is expected to grow at a CAGR of 13% during the forecast period. Government policies and regulations dominate the Asia-Pacific solid-state lighting market, encouraging long-term investments in the industry. Additionally, the growing popularity of smart lighting in Asia-Pacific opens lucrative opportunities for market growth. The LED market in Asia-Pacific is growing thanks to technological advancements. The market is growing due to the characteristics of LEDs, like their long durability, dependability, and small size. The market's leading players will have plenty of opportunities thanks to the increased demand for low-power lighting solutions.
Europe is expected to grow at a CAGR of 11.7% during the forecast period. European consumers are increasingly favoring more environmentally friendly lighting sources over conventional ones, with Germany being the dominant country in the region. The development of smart infrastructure and cities throughout the region drives the market's growth over the forecast period. Automotive, street lighting and backlighting are three common uses for solid-state lighting. The street light market in Europe is an oligopoly with few products and a reasonably stable supply chain. The Europe market is expanding due to features of solid-state lighting like sustainability, reduced emissions, and low energy consumption. Additionally, it is anticipated that the supply of low-tech components from developing nations to manufacture high-tech solutions will offer lucrative opportunities for the market's expansion.
North America is expected to grow significantly over the forecast period. The United States, Canada, and Mexico comprise the North American market analysis. The governments of these nations are making significant investments to promote the use of solid-state lighting that is energy efficient. Solid-state lighting market players are expected to diversify their clientele to take advantage of lucrative business opportunities in the region. North America is one of the major revenue contributors to the global market as a result of technological advancements, innovations, and investments in the sector. Additionally, the growth of the solid-state lighting market is predicted to benefit greatly from the rise in demand for smart lighting solutions. The market is expected to grow due to increased knowledge about lighting technologies, decreased lighting costs, and energy efficiency.
Latin America and the Middle East and Africa are all included in the analysis of the LAMEA market. In LAMEA, adopting cutting-edge systems and solutions is comparatively slow across various industry verticals. The market for solid-state lighting is least represented in this region. The growth of the LAMEA solid-state lighting market is driven by consumer preference for cutting-edge technological products, investments across numerous industry verticals, and the expansion of R&D facilities. It is anticipated that LED adoption will increase during the forecast period due to their low power consumption and high brightness. Furthermore, a significant opportunity for market growth is provided by the production of low-cost, high-performance LEDs using innovative production technology.
The global solid-state lighting market’s major key players are Cree, Inc., Energy Focus, Inc., General Electric Company, Nichia Corporation, Osram Licht AG, Signify Holding, Samsung Electronics Co., Ltd, Seoul Semiconductor Co., Ltd., Sharp Corporation, and Toshiba Corporation.