The next five years are set to be brighter for the industry, but growing competition from LEDs that are produced abroad will hamper revenue growth prospects and place pressure on profit margins.
Los Angeles, CA (PRWEB) November 07, 2011
The LED Manufacturing industry has expanded over the past five years. Revenue is expected to grow at an average of 1.7% annually to $825.2 million in the five years to 2011. Growing interest in energy-efficient products has driven revenue higher. An increasing number of LEDs are being integrated into downstream lighting products sold to businesses or included in consumer items. Despite the recession, businesses ramped up their LED purchases in order to save on rising energy expenses and invest in products that typically last longer than traditional lighting goods. Tax credits passed by the US government also helped industry players weather the recession, since these credits allow companies to open up facilities for less cost. Continuing interest in energy-efficient goods will prolong industry growth, with revenue expected to increase 1.9% in 2011.
The industry has invested a substantial amount in research and development (R&D) to create LEDs that are brighter and more energy efficient than their predecessors. Over the five years to 2011, LEDs have been included as lights in automobiles and backlights in televisions and mobile phones, highlighting their ability to be used in many different products. LED technology will continue to develop quickly, and firms that concentrate on creating LEDs that can be used as substitutes for traditional lighting while keeping final prices down will fare best.
The next five years are set to be brighter for the industry. Continued R&D will result in new types of LEDs that will be used in a variety of consumer items, facilitating revenue growth and expanding the industry’s reach. Consumers and businesses will continue to demand products that are perceived to be better for the environment, raising potential demand for industry products. However, growing competition from LEDs that are produced abroad will hamper revenue growth prospects and place pressure on profit margins. Foreign-based firms will enjoy low-cost labor and less onerous environmental regulations, enabling them to engage in price competition with domestic firms.
Market share concentration in the US LED Manufacturing industry is high. Two firms, North Carolina-based Cree and California-based Philips Lumileds, earn the vast majority of industry revenue. While Lumileds is a subsidiary of the Dutch conglomerate Philips and has gained economies of scale through leveraging its parent company’s existing operations, Cree has worked itself from the ground up to become the largest US LED manufacturer.
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This industry manufactures light-emitting diode (LEDs) chips and components. An LED chip is a solid-state light source that is long-lasting and very energy efficient. LEDs are used as indicator lamps in many devices, and they are increasingly used for lighting and consumer electronics. The industry does not include LED fixtures, luminaires and tertiary products.
Manufacturing LED chips
Manufacturing LED components
LED Manufacturing Industry Report Key Topics
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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