A new report forecasts revenue generation in the global LED packaging market to reach $26.39 billion by 2023 from $18.41 billion in 2017, at a compound annual growth rate of 6.2%.
The key drivers for the growth of the LED packaging market include increasing demand for high power grade LED packages for lighting applications, rising demand for LED packages in the market for display panels, growing government initiatives and regulations to adopt energy-efficient LEDs and increasing demand for smart lighting solutions.
Chip Scale Package (CSP) LEDs are expected to be the fastest growing segment in the LED packaging market during the forecast period. This will be so due to reduced package footprint, thin profile, reduced weight of CSP LEDs compared to other LED types including Surface Mounted Devices (SMD).
Adoption of CSP LEDs will increase because they have better electrical performance and area array distribution of connections.
General lighting application will drive growth in the LED packaging market as residential consumers continue to use the LED types in energy efficiency initiatives. In 2016, general lighting application accounted for the largest share of the market and is expected to continue its growth during the forecast period.
However, a range of factors, including overall efficiency, practical design, consistent performance, and price point, would decide how well LEDs would fare against conventional lighting sources in residential applications.
LED packaging market at regional level
The major focus of governments in India, China, and Brazil for the development and implementation of efficient energy technology and various subsidies given for LED lighting will boost the market for LED materials in these countries
The APAC region is expected to register the highest growth rate in LED packaging market. This will be driven by a surge in demand for general lighting, automotive, and back lighting applications driven by economic growth in China, Japan Taiwan, and South Korea.
Europe is expected to hold a significant share of the LED packaging market for the general lighting application owing to the high standard of living in these countries. Increasing awareness on energy conservation will increase demand of LEDs in the region.
Germany, Italy, France, the UK, and Spain contributed significantly to the use of LED packages in 2016, according to the report.
On the other hand, high saturation in the market is expected to restrict adoption, which, in turn, may limit market growth to a certain extent.