23 December 2020
LED revenue to fall 10% in 2020 to $15.127bn
The COVID-19 pandemic has had a substantial impact on the LED industry in 2020, resulting in a considerable drop in market demand and projected annual revenue down 10.21% year-on-year to just $15.127bn, according to market research firm TrendForce.
Although the magnitude of the decline in 2020 is of historic proportions, as COVID vaccines become more widely available in 2021 it is likely that long-term pent-up market demand will rebound from rock-bottom levels, resulting in annual LED revenue growing by 3.82% year-on-year to $15.7bn in 2021, it is forecasted.
TrendForce indicates that, due to the wide variety of LED applications, the degree of recovery in each application-specific industry varies too.
With regard to traditional backlighting applications, demand for consumer electronics (such as tablets and notebook computers) has skyrocketed on the back of the ‘new normal’ brought about by the pandemic, which involves the proliferation of work-from-home (WFH) and distance education. Given the resultant high demand for display panels, LED backlighting suppliers have seen remarkable performances across the board this year. However, in light of the possibility that most consumers have already purchased the needed electronics products ahead of time in 2020, TrendForce therefore maintains a conservative attitude towards whether the strong market demand in 2020 will persist in 2021.
On the other hand, with regard to the long-anticipated mini-LED backlights, various new products are expected to be released in 2021, spearheaded by major brands including Apple and Samsung. As such, mini-LED backlighting demand will see substantial growth, with annual revenue forecasted to rise by 900% year-on-year to $131m in 2021.
With regard to display applications, LED displays are primarily used within the commercial space. Similar to general lighting applications, the cutbacks in live performances this year caused a corresponding 9.3% decline year-on-year in LED display revenue. However, looking ahead to 2021, TrendForce expects LED display revenue to return to the pre-pandemic level of about $1.48bn due to the gradual recovery of live performances and the rising demand for high-resolution, small-pixel-pitch LED displays.
With regard to general-use lighting, LED lighting applications have suffered massive declines due to the pandemic’s impacts. As commercial activities dwindled this year, the declines in commercial lighting and outdoor landscape lighting have been the most noticeable among the various LED lighting applications. Conversely, the gradual legalization of marijuana and the pandemic-generated skyrocketing market for medical and recreational marijuana in North America have galvanized a substantial increase in horticultural LED demand. Furthermore, the pandemic has also gradually affected the food supply chain, in turn leading to resurging capital expenditure (CapEx) for indoor agricultural infrastructure. As a result, certain LED lighting applications will see recovery in 2021.
Finally, with regards to automotive lighting, the decline in auto sales in 2020 has also stagnated the automotive lighting market. However, automotive LED lighting revenue is expected to return to the level of $2.6bn as the pandemic slows down in 2021, concludes TrendForce.