Packaged LED industry is moving downstream and getting smarte

Some years ago, the senior management at Japanese based chemicals company Nichia suggested it believed that value and leadership in LED lighting would come from quality chips. U.S.-based Cree, meanwhile, stressed that value would increasingly filter down the value chain. Since then, Cree has moved, indeed, in that direction—along with other LED players, such as MLS.

In the last year or two, manufacturers have put increasing emphasis on greater vertical integration, focusing particularly on chip-on-board, modules and light engines. These products have provided an intermediate step in the supply chain between the component LED and a complete lamp or luminaire, and they offer an opportunity for LED manufacturers to diversify and move downstream without going to the extent of producing complete lamps or luminaires.

Moving downstream may be an attractive strategy given the low profit margin for component packaged LEDs and the possibility of Chinese vendors taking a greater share of this market in the future. Many companies, such as Bridgelux, Cree, LG Innotek, Lumileds, Samsung, Seoul Semiconductor and Sharp are supplying these products. Lighting companies, such as Philips and Osram, are also suppliers, as are power/module companies like BAG, Harvard, ULT and Xicato.

Within the smart lighting market there is a trend toward individual luminaire control. One way this can be achieved is by incorporating sensors and controls into the electronics, found at the light engine level. IHS anticipates more engines incorporating smart lighting technologies coming onto the market in 2015, although actual penetration will remain low.

Smart lighting is another way for companies to attempt to add value and improve profit margins. As the LED lighting market moves downstream with modules and light engines, incorporating smart lighting sensors and controls will become, over time, another important part of this trend.

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