Recessed Modular Leads LED Market, Says LUX

by | Jan 29, 2014

Lux Energy Manage

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 percent, according to Lux Research’s new report “Casting the Light: Illuminating the Opportunities in 2023’s LED Luminaire Market.”

Lux Research used historical trends as well as projected average price reductions to build a model that calculates the adoption rate of LEDs within each end market application – office, industrial and street lighting. It found that recessed modular will emerge as the largest LED luminaire market, growing from $1.5 billion in 2013 to $14.5 billion in 2023 by replacing incumbents such as fluorescent. Lux Research also found:

  • Efficiencies will drive down LED package costs, which will fall over 80 percent to less than $4/klmon 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 percent, from $85 in 2013 to $55 in 2023.
  • AC LED-based luminaires 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 percent cost premium by 2023, finding adoption in high-occupancy applications.
  • 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.

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