THE NEW LIGHT ECOSYSTEM

LED Supply Chain Dynamics

2Q 2013 (Navigant Research)

“The lighting industry is on the verge of a large-scale shift away from the traditional technologies of fluorescent, incandescent, and high-intensity discharge (HID) lighting toward light-emitting diodes (LEDs)…as the efficacy and quality of LEDs surpass those of competing technologies and as prices fall to enable reasonable payback periods.

“This transition has been widely expected for a number of years, leading to the launch of new LED-focused companies and to the repositioning of existing lighting companies to take advantage of LED sales. Now…the repercussions are rippling up and down the LED supply chain.”

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“…[C]onsolidation…driven by a desire for vertical integration among the larger lighting companies…is being driven by the relentless demand for lower prices and higher quality. While the total number of vendors involved in the LED supply chain will likely shrink, other factors – including the expiration of existing patents, new interchangeability standards, new technologies, and an expected upsurge in creative product designs will create opportunities for new entrants at each level of the supply chain…

…Navigant Research forecasts that annual worldwide revenue from LED lamps will grow from just over $1.5 billion in 2013 to more than $8.5 billion in 2021…”

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