LED Chip Market

LED Chip Market Outlook (2024 to 2034)

The global LED chip market is anticipated to reach a worth of US$ 24.61 billion in 2024. Moreover, the global market is approximated to rise at 8% CAGR and achieve a valuation of US$ 53.12 billion by 2034-end.

LED technology has been developing continuously. LED chips greatly expanded, ranging from surface-mounted device (SMD) chips to chip-on-board (COB) LED designs. LED chips are electronic components that directly emit light. Another name for them is surface-mounted diodes or SMDs.

They have a significant impact on the quality of light. Usually, metal-organic chemical vapor deposition (MOCVD) is used to make these chips. The essential parts of LED lighting products, such as LED lights and fixtures, are LED chips. The conversion of electric energy into light energy is their primary function. More businesses employ several LED chip products. Blue, red, yellow, green, white, and infrared LED chips are all included in this category.

The global market for LED chips is expanding with the growing demand for these chips from the automotive, consumer electronics, and other industries. Applications for LED chips are extensive and include general illumination, street lighting, automobile lighting, and backlighting in electronics, such as laptops and LCD TVs.

They provide high-quality images because of their excellent brightness and power economy. Another reason for the increase in sales of LED chips until 2034 is the growing understanding of the advantages of LEDs. The demand for LED chips thus rises because of the rising need for energy conservation and the shift to affordable and energy-efficient lighting.

LED chips are utilized for signaling and signage. They are used to regulate traffic at crossroads for both cars and pedestrians, and they run on electricity or solar energy. Leading producers of LED chips are focusing on creating cutting-edge, effective solutions to address growing environmental problems. As per the LED chip industry outlook, low-power and environment-friendly lighting solutions are becoming popular.

Report Attribute	Detail
LED Chip market Size (2024E)	US$ 24.61 Billion
Forecasted Market Value (2034F)	US$ 53.12 Billion
Global Market Growth Rate (2024 to 2034)	8% CAGR
East Asia Market Value (2034F)	US$ 14.4 Billion
Japan Market Value (2034F)	US$ 3.63 Billion
White LED Chips Segment Value (2034F)	US$ 10.09 Billion
North America Market Growth Rate (2024 to 2034)	8.3%
Key Companies Profiled	AVA Technologies, Inc.; Optek Technology; Bright LED Electronics Corporation; Osram Opto Semiconductors GmbH; Wolfspeed; Kingbright Electronic Co. Ltd.; Bridgelux, Inc.; Goldeneye, Inc.; Hitachi Cable, Ltd.; Dowa Electronics Materials Co., Ltd.; Nichia Corporation; Epistar Corporation

Why is the Market Showing Major Profit Signs for LED Chips Manufacturers?

“People Giving Major Importance to Sustainable Energy Needs”

As mentioned in the LED chip industry analysis, sustainable energy consumption is becoming more well-known because of the general public's growing environmental worries about climate change. The need for energy-efficient lighting solutions is driven by this. A prime example of an energy-efficient gadget is the CSP LED, which promotes sustainable energy initiatives while reducing carbon emissions and power utility costs.

Compared to conventional lighting components, chip diode also delivers greater efficiency, longer dependability, and lower maintenance costs. For businesses in the industry, these benefits are generating profitable chip scale package (CSP) LED market prospects.

For their interior lighting needs, 50% of households in America use LED bulbs or related lighting products, according to the U.S. Energy Information Administration (EIA). In the United States, one-third of the energy used for outdoor illumination comes from streetlights, according to IEEE Spectrum.

“New Features and Options Enticing More Customers”

Novel advancements in LED technology are attributed to several causes, including the rise in consumer demand for energy-efficient solutions, the worldwide pursuit of sustainability milestones, and an increase in research spending.

Improved efficiency, enhanced color rendering, superior output quality, and extended lifespan are examples of recent developments. The advancement of smart lighting technologies, including integrated micro-LEDs, is also gaining popularity because of their increased pixel density and brightness for use in signs and public displays.

Enhancing the use of phosphor materials and techniques to provide high-quality color rendering and uniformity in lighting become more important because of government funding and initiatives. According to the National Resource Defense Council, LEDs save utility costs in the United States by around US$ 3.0 billion a year.

India's ambitious goal of adopting LEDs saves energy equivalent to 23.3 million barrels of oil and reduces the country's carbon impact by 60 million tons of CO2, according to the United Nations Environment Protection Agency, which is ultimately contributing to the overall expansion of the LED chip market growth.

“Better Energy Management Stimulating Customers Desire LED Chips”

Smart LED systems that improve energy management and user experience have been made possible by advancements in IoT (Internet of Things) technology, and as such, they are an essential part of contemporary living and working spaces.

To improve user experience and energy management, for example, firms, such as Philips Hue and Lutron introduced new smart lighting systems in 2023 that easily interface with IoT devices and let consumers control their lighting with voice commands and smartphone applications.

The development of LED technology itself is another noteworthy trend, which has been studied thoroughly in the LED chip industry outlook. LED lighting systems are becoming more versatile and performing better thanks to innovations, such as micro-LEDs and OLEDs. OLEDs provide flexibility and thinness for new displays and screens, while micro-LEDs, which are renowned for their excellent brightness and resolution, are employed widely.

For example, Samsung added micro-LED technology to their high-end TVs in 2023, which improved image quality and reduced energy consumption. Similar to this, OLEDs are becoming more popular due to their thinness and flexibility.

Several manufacturers, including LG, are creating OLED lighting panels that are incorporated into several designs, creating new market potential in industries, such as automotive lighting and consumer electronics, which is leading to increasing LED chip market size.

What is Putting Manufacturers of LED Chips in a Tough Situation?

“Supply Chain Issues Coupled With Thermal Management Making Market Tough to Handle”

LED chip manufacturers face several critical challenges, including thermal management issues that affect device reliability and performance. High production costs, particularly for advanced technologies, such as Micro-LEDs, remain a significant hurdle. Manufacturers are also grappling with supply chain disruptions and raw material shortages, especially for rare earth elements used in LED phosphors.

To address these challenges, companies are investing in automated production processes and advanced thermal management solutions. Several producers are developing alternative materials and innovative packaging techniques to reduce costs, as stated in the LED chip industry analysis.

Country-wise Insights

Major countries contributing to this market include the United States, China, Canada, Japan, and South Korea. In North America, the United States market is forecasted to hold a significant LED chip market share.

Why is the United States Forecasted to Make Good Profits in the North American region?

“Advanced Automotive Sector Improving the Demand for LED Chips”

Attribute	United States
Market Value (2024E)	US$ 5.95 Billion
Growth Rate (2024 to 2034)	8.5% CAGR
Projected Value (2034F)	US$ 13.43 Billion

A major driver of the United States market's expansion is the growing need for LED chips in consumer and automotive electronics. One of the top automakers in the world is the United States. In 2021, it manufactured about 9.1 million automobiles. Similarly, it is forecasted that the country will sell around 143 million smartphones by 2027.

Consumer devices, including televisions and cellphones, employ LED chips for backlighting, which makes the display visible in diverse lighting settings. Because LED chips are brighter than conventional lighting options, they are also used in cars to improve nighttime driving vision.

What is Leading to Higher Revenue for LED Chips Manufacturers in China?

“Easy Production and Good Export Conditions Making LED Chips Manufacturers Rich”

Attribute	China
Market Value (2024E)	US$ 4.43 Billion
Growth Rate (2024 to 2034)	8.4% CAGR
Projected Value (2034F)	US$ 9.95 Billion

The surge in revenue for LED chip manufacturers in China is attributed to several key factors. Firstly, the production process for LED chips become increasingly streamlined and efficient. Advances in manufacturing technology allowed for higher output at lower costs, enabling companies to meet growing global demand.

Favorable export conditions play a significant role in boosting revenue. China’s strategic trade agreements and established logistics networks facilitate easier access to international markets. As sustainability and energy efficiency become paramount, the global push for LED lighting solutions opened doors for manufacturers, positioning them advantageously in the market.

Category-wise Evaluation

There are several applications for LED chips ranging from backlighting to automotive leading to several production opportunities for LED chip manufacturers.

For Which Application are LED Chips Used Extensively in the End Market?

“Widespread Use of LED Chips in Backlighting Generating More Revenue”

Attribute	Backlighting
Segment Value (2024E)	US$ 8.64 Billion
Growth Rate (2024 to 2034)	7.2% CAGR
Projected Value (2034F)	US$ 18.17 Billion

Backlighting is one of the primary applications for LED chips in the end market. This technology is pivotal in enhancing display quality across several devices, including televisions, smartphones, and computer monitors.

By using LED chips for backlighting, manufacturers achieve better brightness, contrast, and color accuracy compared to traditional lighting methods. LEDs are also energy-efficient, leading to longer battery life in portable devices and reduced power consumption in larger displays. Their compact size and versatility allow for slim designs, making them ideal for modern electronics.

Which Type of LED is Majorly Desired by Customers in the End Market?

“Escalating Use of Blue LED Chips Compared to Other Lights Including Red and Green”

Attribute	Blue LED Chips
Segment Value (2024E)	US$ 6.82 Billion
Growth Rate (2024 to 2034)	8.2% CAGR
Projected Value (2034F)	US$ 13.97 Billion

Blue LED chips emerged as the most desired option among customers. This preference stems from their versatility and crucial role in several applications, including lighting, displays, and signaling. Blue LEDs are particularly valued for their brightness and efficiency, making them suitable for diverse settings, from residential to commercial use. They are integral to full-color displays when combined with red and green LEDs, enabling the creation of vibrant and visually appealing images.

Competitive Landscape

Key players in the LED chip market are focusing to increase their investment and come up with more effective products. These advancements are helping companies match new LED chip market trends.

• USHIO announced its foray into the market in 2022 with the introduction of compact, highly efficient SWIR LED chips. The firm already established itself as a pioneer in the solid-state lighting (SSL) industry with its own packaged LED and laser diode solutions.
• Osram AG introduced a new range of OSLON LEDs in 2022. These LEDs are capable of providing broad distribution patterns and great performance, which are often needed in applications, such as inter-lighting horticulture and vertical farming. The GAaIP Thin Film Chip, on which the new products are based, allows OSLON to manage large drive currents with a gradual decrease in photon flux.

Fact.MR provides detailed information about the price points of key producers of LED chips positioned across the world, sales growth, production capacity, and speculative technological expansion, in this new market report.

Segmentation of LED Chip Market Research

• By Product :

  • Blue
  • Red
  • Green
  • Infrared
  • Yellow
  • White

• By Application :

  • Backlighting
  • Illumination
  • Automotive
  • Signs & Signals

• By Region :

  • North America
  • Western Europe
  • Eastern Europe
  • Latin America
  • East Asia
  • South Asia & Pacific
  • Middle East & Africa