LED lighting prices will be reduced but not 90%

A few days ago, Vantage Point Partners investors said that the price of LED lighting will fall by 90% in 2015. In response, Jerald Kolansky, an analyst at GLG research, gave a different opinion and analyzed it. The specific analysis is as follows:

Overview

This article will discuss why Vantage Point Partners investors believe that as LED lighting products enter large-scale production, LED prices will fall by 90% in the next few years to replace incandescent light bulbs.

analysis

I think that the cost of LED lighting applications will continue to fall, but I do not believe that now a 100lm LED with a cost of 1 US dollar will drop to 10 cents in the next few years. Today, LED backlighting for LCD TVs is approximately 10 cents. These are relatively low power and small chip size devices. The area of ​​a lighting LED is 6-8 times that of LED backlighting. I would like to briefly review the dynamic changes in LED costs:

A. Lighting designers are concerned with the cost of a lighting solution rather than the cost per stream of light. If the cost of today's 100 lumen LED is $1.00, even though you may increase the light output to 200 lumens, the drive is still 50 cents per 100 lumens. Moreover, until now, only CREE Corporation has used the most advanced LED technology to increase the light output to about 200 lumens in advanced laboratories. It is not yet clear when 200 lumen devices can appear in market applications. There is also the possibility that new materials that replace silicon carbide may exist, or that sapphire may be developed, but these are still in the laboratory.

B. LED lighting requires packaging, which will consume a lot of heat, while the package must have good optical properties. The prices of these packages are not cheap, and some breakthroughs must be made in R&D in order to further reduce prices.

C. Most LED manufacturers have shifted production to low-cost manufacturing regions such as China, so there is not much room for cost reduction in these regions.