Why LED lighting is so important to the chip market

The incandescent light bulb will soon no longer be the go-to choice for lighting. It has been a long time coming, but the cost structures normally associated with LED equivalents have dropped dramatically over the past 5 years or so.

It should be noted that the general LED lighting market represents around 57% of the total LED market of $25.9bn projected for 2018. The others being signage, automotive lighting, mobile devices, backlighting in displays, monitors and other.

General lighting LED applications continue to gain traction in both commercial and residential markets, they are further accelerating growth.

It is no surprise that commercial/industrial applications are leading the transition to LEDs as lighting generally represents anywhere from 25% to 40% of total energy use in commercial buildings. As these applications require long hours of high intensity light, the economic payback of the saved electrical power is relatively short-term.

Secondly, the long life of LED fixtures dramatically reduces the replacement cost of the bulbs. These replacement costs not only include the price of the bulb itself, but also the labor cost to physically replace them, which in certain applications, such as high bay lighting, is significant.

The primary driver behind the high growth rate of LED lighting is the dramatic reduction in power consumption that LED lighting offers over traditional lighting. Compared to incandescent lighting, LEDs require less than 20% of the electrical power to provide the same level of light (in lumens).

LED advantages include a lifetime orders of magnitude higher than incandescent bulbs, which dramatically reduces replacement costs. The ability to dim LEDs using the previously installed base of TRIAC dimmers is also a major benefit, especially in residential lighting. Instant turn-on eliminates the warm-up period associated with CFLs and LEDs are not sensitive to power cycling like their CFL counterparts.

Additionally, LED lighting fixtures do not contain any toxic materials to manage or dispose of, whereas CFL utilizes toxic mercury gas to operate. Lastly, LEDs enable new very low profile form factors that other technologies could not.

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