LED drivers offer better quality, efficiency, durability, and performance by managing and controlling the flow of current for LED lights. Moreover, it also improves the energy consumption and easy to install. LED drivers are mainly used in a variety of applications such as residential, commercial, and outdoor & traffic lighting, among others. Increased demand for energy-efficient lighting systems, especially in households and outdoor & traffic lighting has boosted the growth of the global LED driver market tremendously. The value of the global LED driver market for lighting is expected to reach USD 24.98 Billion by the end of 2022, growing at a CAGR of 26.3% during the forecast period between 2016 and 2022.
Based on region, where can we expect the maximum growth for this market and why?
In 2016, Europe is estimated to be the largest market, followed by APAC and North America. However, the maximum growth is expected in APAC and RoW regions in the coming years. Increased construction activities are expected to contribute significantly to the growth of LED driver market in APAC. Around 200 Million homes are expected to be constructed in China and 18 Million in India, thus creating ample growth opportunities for this market. In RoW, Saudi Arabia alone witnessed investment of around USD 402 Billion in real estate market in the past few years, and about 1.2 Million more homes are likely to come up in the next five years, which would significantly drive this market in RoW. Besides the residential end-user, APAC and RoW are potential regions for commercial sector as well. The economy modernization initiatives of government in the APAC and RoW countries would definitely shape the LED Driver market.
How bright is the future of the global LED Driver Market for lighting?
The LED driver market is expected to grow more than twenty folds in terms of shipments, over the next decade. LED driver represents the heart and soul of lighting control since it is a major controller in the functioning of LED lights and governs its operations. The LED driver industry is expected to offer lucrative opportunities in the years to come. The factors supporting its growth are:
- Urbanization/Mega Urban Projects: The modernization initiatives of developing countries along with the growing urbanization are the key factors influencing this market. The upcoming smart cities projects, green buildings, and home automation are some of the major trends supporting the growth of this market. According to the United Nations, between 1950 and 2005, the urban population growth rate was 3.6% in developing countries as compared to the industrialized countries where it was 1.4%. Cities are growing both in numbers and size, and these urban models are creating ample space for lighting industry. By 2050, 70% of the population will live in cities, which means more homes, more lighting, and more lighting control component. The global residential building market witnessed 24% growth between 2003 and 2008, and it is expected to grow further. These trends are likely to provide ample penetration opportunity for LED driver manufacturers.
- Rapid LED penetration: The world is increasingly adopting LED lights as a key solution to overcome high energy consumption. LED lights segment is rapidly penetrating in the general lighting industry, which commands nearly 20% share of the global electricity consumption. LED lighting, an emerging technology, is likely to undergo significant growth over the coming years, owing to the advantages of this green and energy-saving technology. Currently, most of the buildings and industrial premises worldwide are still using conventional lighting bulbs; however, innovations and advancements in the field of applied LED lighting technology in the coming years will revolutionize their energy consumption pattern. The LED light bulb prices are expected to fall down by around 50% by 2017. Also, LED lighting applications are likely to see tremendous growth both for commercial premises as well as residential usage, thus leading to double-digit sales figures for LED manufactures.
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Major factors responsible for the growth of this market
The declining prices, awareness of benefits of LED lights, and high rate of adoption across the world are the major factors driving LED driver market for lighting. In addition, government support is another key factor as the countries like India, where the penetration of this technology is low, these government initiatives would lead to awareness among masses, thus contributing towards the growth of this industry. Recently, the government in collaboration with the United States Agency for International Development (USAID) launched its first web portal to promote Net Zero Energy Building (NZEB) to encourage green technologies in India.
What are the major obstacles that may slowdown the market growth and how can they be tackled?
High initial setup cost is the major obstacle for the market growth, as the current pricing in this industry is largely dependent on volume and it also depends upon the maturity and penetration in the market. Considering this, the installation cost is high in emerging markets like APAC. This is a time bound obstacle as industry is currently into emerging phase. In the long run, some standardization is likely to be seen in the pricing of LED drivers. The localization of manufacturing facilities is also expected to contribute in standardizing the price of these control products.
How are key strategies adopted by the leading market players paving a new path for this market?
Since a huge number of local and low cost manufacturers have entered this market, the competition among the market players has increased as well. For cutting this competition, the lighting companies are focusing on professional lighting solutions in developed markets such as the U.S., Europe, and Japan. The companies seek to capture this high growing market segment with product diversification and differentiation. In developing markets, the players have adopted the localization strategy to offer their products at low cost and to compete with local low cost products.