The market research firm Yole Development released its latest report on UV LED technology. The company has followed the industry for the last ten years. During that time the proportion of revenue from LEDs compared to the overall UV lighting market increased from just 8% in 2008. In 2018 the proportion is expected to reach 25% or more than triple what it was ten years ago.
In 2008, UV LEDs were considered an emerging technology that was trying to make its way into applications such as counterfeit detection and UV curing. At the time, the LED industry was focused primarily on visible LEDs for display applications, and the industry was expecting the rise of general lighting. In that time the number of UV LED makers also boomed from 10 in 2008 to over 65 in 2018.
“From around 10 players in 2008, there are now over 65 players in 2018,” asserts Pierrick Boulay, technology & market analyst at Yole. “Since 2010, several visible LED players have turned to UV LEDs, seeking new growth drivers and higher profit margins.”
The UVA segment of the UV spectrum was the first to experience drastic price reductions as companies scaled up production and more firms entered the market. Strong price reductions of UVA LEDs have further sped up the adoption of the technology. However, Yole points out that after several years of double-digit growth in revenue for the UV curing application market (80% of the UV LED market), revenues have started to decline, as players in the highly competitive market have drastically reduced prices. Yole predicts that only the companies that can innovate in UVA LEDs and UV curing will remain profitable.
The UVB and UVC segments of the UV spectrum have been much more difficult to develop performance wise. Therefore, the UVB and UVC LEDs require much more costly and time-consuming development and barriers for new UVB and UVC LED makers are therefore much higher. For this reason, the UVB/UVC market is much slower moving.
Yole predicts a slow-down phase for the UV LED industry as the UV curing market starts to level off. The company also forecasts a delay in the expected UV disinfection boom. “In this context, we expect the UV LED market to reach US$320 million in 2020, from US$160 million in 2017,” confirms Pars Mukish, business unit manager at Yole. “Then, the market will be driven by UVC applications, showing a strong increase to US$1 billion in 2023.”
Yole Says Large Part of Visible LED Industry Turned to UV LEDs
Yole notes that a large part of the visible LED industry has turned to UV LEDs. UV LED makers differ in their strategies, depending upon which wavelengths they target. While several players continue to focus on device manufacturing, others are vertically integrating for production of modules and systems.
Yole gives the example of Ushio, a producer of UVA LED chips, packages, and now curing modules, which it supplies to printer manufacturers or end-users. Another example, Nikkiso was initially a UVC LED maker, but has since moved to module and system level with the acquisition of AquiSense Technologies in 2016.
In addition to UV LED fabricators, some new entrants, mostly at the module and system level, are also trying to get into the industry. Yole contends that the module or system level represents the sweet spot in opportunities. Yole insists that the only missing companies in the pursuit of UV lighting market opportunities with LEDs are the traditional UVC system suppliers, which seem still to subscribe to the “wait and see” philosophy.