Nowadays, LEDs have not been widely used in general lighting applications. It is expected that by 2018, more than 50% of the lamp holders will support LEDs, and more than 80% of the lamps sold on the market will be LED lamps. However, the current market for LED production equipment used in processing has not reached the scale of the previous two years. Compared with the $1.9 billion in 2010 and the $1.7 billion market in 2011, the size of 2012 was only $600 million. These companies will invest in the second half of 2013, and by 2014, the LED production equipment industry will achieve significant (but limited) growth. But this will also be the final large-scale investment in the LED industry. After that, the size of the market will continue to shrink, becoming a market that is basically maintained by exchange (replacement) demand.
It is estimated that by 2018, the area of semiconductor materials for LEDs will increase to four times that of 2012, and the revenue will reach a peak of $17 billion. Although the sales volume will reach its peak around 2019, it will be affected by the following two factors, and then it is estimated to gradually reduce. First, because the amount of light emitted by a single LED is greatly increased, the number of LEDs required is reduced. Secondly, compared with the current technology, LED product life is greatly extended, it is not necessary to replace the lamp once or twice a year, and it can be replaced once in 10 years. This will cause the market for replacement LEDs to decelerate significantly and permanently.
Over-investment before 2011
In the next five years, LED production will continue to expand, so why the production equipment market has rebounded? This is because of large-scale over-investment in 2010 and 2011. The main reason is that the Chinese government grants subsidies to MOCVD equipment, and companies are doing their best to ensure market position. As of 2010, only a few Chinese companies have been involved in the field of LED production equipment, but now it has increased to 70. But most companies are probably short-lived, and the surviving companies are not expected to buy new equipment, but increase production capacity through failed acquisitions.