Development status and market landscape of outdoor LED lighting

The LED industry originated in the 1970s. After over 30 years of development, the LED industry has initially formed a relatively complete industrial chain encompassing the production of LED epitaxial wafers, the preparation of LED chips, the packaging of LED chips, and the application of LED products. Many LED enterprises have developed rapidly, including Changfang. Driven by semiconductors, seven semiconductor lighting engineering industrialization bases have been established in Shanghai, Dalian, Nanchang, Xiamen, Shenzhen, Yangzhou, and Shijiazhuang. The Yangtze River Delta, Pearl River Delta, Fujian Delta, and northern regions have become hubs for the development of the LED industry.
Currently, the semiconductor lighting industry is experiencing positive development, with epitaxial chip enterprises in particular experiencing rapid growth. Packaging enterprises continue to maintain rapid growth in scale, and significant progress has been made in lighting applications. In 2007, the output value of LED application products exceeded 30 billion yuan, making China the world's largest producer and exporter of LED and other application products. The emerging semiconductor lighting industry is taking shape. China has already formed certain characteristics in the lighting field, with the fastest development, having hundreds of LED enterprises and constructing dozens of demonstration roads. However, it still lags behind in the indoor general lighting market.
The concentrated display of the 2008 Beijing Olympic Games gave people a new understanding of LEDs, effectively propelling the development of the semiconductor lighting industry. Currently, the semiconductor industry is large but not strong, and its core competitiveness still needs to be further enhanced. For domestic enterprises, expanding scale, improving product quality and technological level are the primary tasks. It is crucial to enhance the bargaining power when obtaining patent licensing from major companies in the future, or gradually break through core patents through research and development. The trend of future development indicates that the 21st century will usher in an era of new lighting sources represented by LEDs.
With the gradual maturity of LED technology, coupled with the promotion of the "Ten Cities, Ten Thousand Lights" demonstration project and the rise of specialized stores, outdoor lighting has become the earliest segment of LED lighting products to be applied, truly earning the title of an "invisible champion". So, what is the current industrial landscape and development status of outdoor lighting? And what will be its future development trends?
In terms of product categories, outdoor functional lighting includes street lights and other functional lighting fixtures. In terms of light sources, outdoor functional lighting was previously dominated by induction lamps and high-pressure sodium lamps, but now it is primarily based on LED light sources. Based on the current installed base of outdoor functional lighting in mainland China, street lights and garden lights have the largest market capacity, followed by high-pole lights and high-power spotlighting, and finally tunnel lights. Since street lights and tunnel lights mostly belong to the public lighting sector, they have developed earlier and faster.
The rapid development of urbanization and the increasing efforts in energy conservation and emission reduction have provided a huge potential market for the future development of LED street lights. Whether it is outdoor lighting, landscape lighting, government projects, or outdoor commercial lighting, the rapid development of outdoor lighting fixtures in recent years is evident to all. The launch of the "Ten Thousand Lights in Ten Cities" demonstration project has further fueled the boom in the outdoor lighting market. In early 2009, in order to expand domestic demand, promote the development of the LED industry, and reduce energy consumption, the Ministry of Science and Technology launched the "Ten Thousand Lights in Ten Cities" demonstration project. Driven by this project, the market size of LED outdoor functional lighting reached 8.2 billion yuan in 2012, a year-on-year increase of 61%. Among this, the market size of LED street lights was 4.2 billion yuan, a year-on-year increase of 43%.
However, the quality issues that emerged during the implementation of the "Ten Cities, Ten Thousand Lamps" demonstration project have also led industry insiders to return to rationality: government subsidies are not easy to obtain, outdoor lighting technology is not yet mature enough, and business models such as government procurement, EMC mode, and BT mode are not yet perfected. It is precisely because of the "Ten Cities, Ten Thousand Lamps" demonstration project that the market has increasingly high requirements for outdoor lighting technology, with greater demand and more diverse functions.
After the 18th National Congress of the Communist Party of China, due to the promotion of new urbanization construction, urban lighting projects have blossomed nationwide. Outdoor lighting fixtures have gradually shifted from their functional roles to decorative ones. They not only serve as illumination but also enhance the beauty of urban landscapes. Street lamps are no longer synonymous with being bulky and unsightly.
Among outdoor lighting fixtures, street lamps exhibit the greatest development potential. According to statistics from the Production and Research Department of the Semiconductor Lighting Engineering Research and Development and Industry Alliance, in 2012, China's LED street lamp usage amounted to approximately 5 million units, marking a year-on-year increase of 44.09% and accounting for 14% of the overall street lamp usage. In 2013, the domestic market penetration rate of LED street lamps surpassed 15%, making them the most representative lighting fixtures in China's LED lighting promotion and application.
Experts indicate that LED street lights will maintain a compound annual growth rate of around 50% until 2015. By 2015, the overall penetration rate of LED lighting fixtures in the road lighting sector (primarily street lights and tunnel lights) is expected to reach 46%. Over the next two years, more than 30 million new LED street lights and tunnel lights will be installed. These favorable expectations bring greater development potential to LED street lights.
Undoubtedly, the outdoor lighting market holds immense potential, yet simultaneously, the industrial landscape, market dynamics, technological advancements, distribution channels, and branding of outdoor lighting are all undergoing transformation.
In terms of the industrial landscape, an increasing number of specialized production areas have emerged, and more and more enterprises have entered the outdoor lighting sector, commencing the manufacturing and sales of outdoor lighting products. Currently, Zhejiang, Jiangsu-Shanghai, and Guangdong (primarily Zhongshan Ancient Town) constitute the three major markets for outdoor lighting. Among these, manufacturers are primarily concentrated in Zhejiang, Jiangsu, Guangdong, and Shanghai. Presently, the domestic market capacity for high-pole street lamps is predominantly located in Jiangsu and Zhejiang, accounting for 60% of the market share, with Zhongshan Ancient Town accounting for approximately 10%. In terms of garden lights, Zhongshan Ancient Town holds a 60% market share, while Jiangsu and Zhejiang account for less than 30%.
In terms of market capacity, the years 2013 to 2015 will witness a global trend of LED outdoor lighting replacement, with Asia-Pacific, Japan, and Taiwan being the most active. Driven by this trend, the global output value of outdoor lighting in 2013 will reach $247.8 million, with an annual growth rate of over 46%. Other emerging markets, such as Thailand, Russia, Latin America, and Africa, will also experience a large-scale streetlight replacement trend in 2014. By 2015, the penetration rate of LED streetlights will gradually stabilize, and the growth rate will begin to decline. The global scale of LED streetlight replacement and new installations will remain at around 10 million units per year.