Driven by superior features and falling costs, the market for light-emitting diode (LED) luminaires, or optimized permanent light fixtures, will grow more than 12-fold over the next decade – from $2 billion today to $25 billion in 2023, a compound annual growth rate (CAGR) of 25 per cent, according to Lux Research.
The LED packages rapidly fall in cost and improve in efficiency, the cost structure of LED luminaires will shift, and present opportunities in other components such as secondary optics and drivers.
Efficiencies will drive down LED package costs. LED package costs will fall over 80 per cent to less than $4/klm on improved efficiency, increased manufacturing yields and utilization. As a result, the bill of materials (BOM) of a standard 3,500 lumen recessed modular luminaire will fall 35 per cent, from $85 in 2013 to $55 in 2023.
High-CRI LED will remain a niche product. AC LED-basedluminaires will become cost competitive by 2018, but will provide a technology advantage only in low-power applications, such as recessed modular luminaires. In contrast, high-CRI luminaires will remain a niche product, with a 9 per cent cost premium by 2023, finding adoption in high-occupancy applications.
Optics market represents a huge opportunity. The LED package market will be dwarfed by opportunities in optics and drivers. The secondary optics market will be the single biggest growth opportunity in components, growing to $6.9 billion in 2023, while the drivers market will reach $4.9 billion.
