Auto LED Lighting to Achieve Supply-Demand Balance in China in 5 Years

First LED brake light in

The global market revenue of light-emitting diode (LED) auto lamps is expected to nearly double from US$690 million in 2007 to US$1.2 billion in 2012, achieving a market penetration of about 8%, at a compound annual growth rate (CAGR) of 13% during the period, according to the statistics compiled by Industrial Economics & Knowledge Center (IEK) of Taiwan.

The LED lamp installed as a third brake lamp, typically mounted at the bottom-edge of rear windows or at top edge of trunks for better visibility, reportedly has a very high penetration rate. The story differs for LED headlamps, currently installed on very few luxury cars as standard equipment and typically can be ordered as options at added cost for more popular-priced models; these headlights are forecast to gain a market penetration of a modest 3% in 2011, mostly due to considerable competition from high-intensity discharge (HID) counterparts.

Likely due to ease of design, manufacture, with LEDs being easier to install in taillights without as much concern for issues as glare and focus, LEDs in taillights are predicted to achieve rising-star status over the next few years by winning a market penetration of about 28% in 2011, relative to 15% for 2010.

As in non-automotive applications, LEDs have been touted as potentially the next green lighting solution. Despite existing weaknesses as thermal dissipation, glare and relatively higher retail prices, LEDs are being embraced as a potential revolution in eco-friendly automotive lighting, widely studied by major global companies and research institutes.

Contrasting its shortfalls, LEDs last far longer than incandescents and other light sources, as well as boasting short response time, compactness, lightweight and matrix-configuration in original form. However and especially for headlights, LEDs currently lack the lumen output relative to say halogens and even quartz headlamps; but its very small matrix-form allows for excellent design freedom, allowing panels of LEDs to be set in wide ranging forms. But as indicators that call for high intensity output without needing directed focus, LEDs fill the bill, such as for taillights, side markers etc.

Mature Technology

According to Weiwang Bulbs Co., Ltd., a Taiwan-invested maker of automotive LEDs in China, says that the company targets relatively mature automotive products as indicator lamps, such as turn signals, brake lamps etc. The maker is also working on LED headlights but admits to needing more time to achieve product reliability needed for real-world applications.

Echoing the standard merits of LEDs, the maker says that such bulbs used in automotive applications also boast many advantages, including energy-efficiency, dimmablility, high color rendering, longer durability and better reliability, shorter response time, compactness, lightweight etc., without mentioning that durability is especially important in automotive applications due to a light source being subject to impact, extreme thermal variations especially within enclosed housings, foul weather etc.

Perhaps indicative of the current business climate, the LED automotive lighting market is also, according to Weiwang, drawing increasingly more modestly-sized operators, newcomers to the sector, including electronics or hardware makers, hence intensifying the competition.

First Brake Light

The first LED brake light in China was installed on a locally produced car built by the Shanghai Automotive Industry Corp. (SAIC) in 2000, with the pioneering LED lamp developed by SAIC's engineering center and Shanghai Koito Automotive Lamp Co. Ltd., who turn out some 200,000 units yearly.

The heavyweight producers in the global automotive LED sector are Lumileds Lighting of the USA and Osram of Germany, altogether commanding some 55% of the market. Nichia of Japan, supplying about 10% of the global automotive-LEDs, produces higher quality LEDs, especially white- and blue-light models, but at relatively higher prices. Makers in Taiwan supply about 10% of the global demand but focus on LED packaging, with their products mainly serving mid- to low-end automotive applications.

Industry experts in China say the local LED line is expected to be developed further to achieve balanced supply-to-demand, gradually meeting the massive domestic demand in five years. So far Taiwan makers are positioned to their advantage, being the biggest LED-chip supplying bloc to China, where most Chinese LED companies are packagers.