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Blog: Strong LED Growth Helps Drive Electrical Sales

By Jack Keough

The strong growth of LED components  is increasing business for many electrical manufacturers and distributors and that is evident from the recent fiscal earnings report of Cree, a leading producer of LED products.

The electrical manufacturer reported sales of $1.4 billion in revenue for fiscal 2013, a 19 percent increase in sales due to LED expansion, new products and its other lighting and power businesses. In looking at Cree’s numbers, it is indicative of the growth by many manufacturers involved in LED lighting.

As reported on tedmag.com, for the fourth quarter, Cree earned $375 million, a 7 percent sequential increase and the company closed fiscal 2013 with more than $1 billion in cash and no debt.

Cree reported strong sales in lighting as well as LED components in the quarter. While it saw a rise in LED sales, it marked a strong 33% year-over-year growth in its lighting segment. As the demand from the backlight market nears saturation, the general lighting market is expected to be the primary growth factor in the LED industry, the company said.

Digitimes Research forecasts that the global LED lighting market will be worth US$25.4 billion in 2013, representing 54% growth on the 2012 figure of US$16.5 billion.

Another industry report  says  that while LEDs currently account for only 10% of the total lighting market, the percentage contribution is estimated to increase to as high as 60% by 2020.

Lighting policy in many countries also is driving development and sales of LED lighting, and this effect has been seen in the Asia region. For example, Japan now has the highest LED lighting market penetration rate of any region, with the rate set to rise to 73.8% by 2015, followed by Europe and North America.

In addition, a new report issued this week by LEDinside, which provides extensive research on the LED market, notes that China’s LED residential lighting market will reach $814 million in 2013 to represent a 24 percent share of the overall global market.

There are also reports that GE expects to double its LED lighting business in Asia next year compared to this year in which LED sales increased 26 percent. In 2014, company executives believe that sales of LED lighting products will surge 60 percent.

There are about 400 LED manufacturers in the U.S. and abroad and their performance has led to some merger and acquisitions activity and strategic agreements, two of which took place in the past few weeks.

Ulverston, UK. Marl International has started a bilateral engineering partnership with California-based LED lighting manufacturer Bivar Inc. under which the two companies will combine design resources and bring innovative LED lighting and indicators to the market more quickly. The announcement marks a further stage in the strategic alliance between Marl and Bivar which was announced in January.

Under the agreement, Marl and Bivar will share expertise, tools and teams to bring products to market jointly. The two companies will market and support these products to customers around the world through a global network of agents and distributors. The two companies have manufacturing locations on three continents.

LALED, a Louisiana based manufacturer of LED lighting, has merged with the Magnolia Companies of Louisiana, positioning LALED for rapid growth in the market. LALED has been planning to build an LED manufacturing facility in the Acadiana, La. area and the now fully funded company will move forward with its real estate strategy over the course of the next six months.

“We have been steadily growing over the course of the past few years and finally reached a point that we felt a partner would allow us to reach the level we need to become a major supplier in this country,” said Robert Owens, CEO of LALED. “This merger will now allow for massive growth and for us to continue to invest in the Louisiana economy through a new production facility.”

 

LALED’s current manufacturing is in Taiwan and China, with finish assembly in Lafayette, La. LALED’s new manufacturing facility will allow for up to 80% of manufacturing to be done in the Lafayette area and create over 150 high skilled jobs over the next three years.

Watch for more such merger and activity in  the near future.

Jack Keough was the editor of Industrial Distribution magazine for more than 26 years. He often speaks at many industry events and seminars. He can be reached at john.keough@comcast.net or keoughbiz@gmail.com

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