Product Code: 63633
The LED encapsulation market was valued at USD 20.45 billion in 2019 at a CAGR of 13.52% over the forecast period 2020 - 2025. The growth of LEDs in segments such as handheld devices, mobile phones, display backlights, automotive, and electronic signs, has led to an increase in demand for enhanced performance and long-term reliability, which is further dependent on the technological advancement of the LED packaging market. LEDs have been accepted as an integral part of electronics as a low powered light source. The semiconductor chip in a LED is sensitive and needs protection from moisture, physical damage, and outside elements. Moreover, electrodes may undergo oxidation and work inefficiently if not protected from moisture and oxygen. Encapsulation caters to these problems and effectively elongates the life of the LED. Special encapsulation materials allow heat dissipation through them while providing protection from fluids and chemicals. Owing to these properties, LED Encapsulation has found its application in various industries such as consumer electronics, automotive, and telecommunication.
- The growth of the LED lighting market is anticipated to grow into a USD 70 billion industry by 2020, a growth from 18% market share to 70% market share in just over 5 years (Forbes). In parallel, Global Warming has created a huge need for conserving energy, especially for lighting which represents roughly 19% of the world's electricity annual consumption (European Commission, 2018). With LED systems being frequently used in a much broader range of applications, encapsulation is continually providing support for this ever-evolving industry, with continuous advancement and development specifically for the LED market.
- The growth of the market is driven by demand for longer life of LEDs and the need for protection from moisture & chemicals. Moreover, protection from solder joint fatigue in chip-based LED is expected to further augment the growth of this market. Silicone encapsulation market has picked up momentum in the past few years as the material of choice for encapsulation of LEDs, owing to its flexibility & operating capability over a wide range of temperature, though could have reliability issues in cold weather applications. However, epoxy still holds the largest market for encapsulating LEDs, as it provides effective moisture protection and is cost-efficient.
- With regard to TV display application, the industry is shifting from the usage of LED to OLED (Organic Light-emitting diode), which is the most advanced innovation and is supposed to penetrate more into the market. This inclination might hinder the volume growth of the LED packaging market and, thus, the encapsulation market.
Scope of the Report
LED Encapsulation is a technique for enhancing the safety of LEDs under diverse environmental conditions, that reduces light coupling losses and directs the LED light towards a specific viewing angle and protect the LED chip and lead frame against certain external stress. It is recognized for its operational advantages like protecting LED chip from being damage, light extraction (couple light from the chip), withstanding low wavelength (high energy) light, and is stable over a wide temperature range. LED encapsulation is part of the packaging process to produce the latest product, LED.
Key Market Trends
Silicone Encapsulant Estimated To Have the Highest Market Share
- Organic silicones have been utilized as encapsulant materials for light-emitting diodes (LEDs) for several years, while their performances need to be updated in order to meet the requirements of high-power LEDs. Silicones have been the material of preference for Light Emitting Diode (LED) packaging due to their outstanding transparency and stability at operating temperatures. Silicones are not only utilized as encapsulants to protect LED devices but also as the polymer matrix for phosphors to convert blue LEDs to white LEDs. With commercial silicones, LEDs have refractive index mismatches at the silicone/LED chip and silicone/phosphor interfaces. This mismatch leads to reduced light transmission and trapped light with-in the LED device. Better light extraction can decrease intrinsic heating, in turn decreasing the dependency on heat transport materials and enhancing reliability.
- Moreover, the demand for the silicon type is majorly due to the strong demand from commercial LED lighting. Silicon Encapsulant is also majorly used in other electronics applications. As the advantages silicone encapsulants provide, such as thermal transfer and light emission, are in line with the addressable need of mid- and high-power LEDs, the silicon segment is expected to grow at a substantial rate, during the forecast period. Huge demand for silicone Encapsulant is expected from the United States and Asian regions, like South Korea and Taiwan, particularly for silicon encapsulants, due to the large production of consumer electronics like TV, tablets and monitors and the availability of the Encapsulant in that region.
Asia-Pacific Dominates the LED Encapsulation Market
- Asia-Pacific is supposed to register the highest growth rates in the LED lighting market in the coming years. UNEP in the frame of enlightens program estimates that in the absence of new policies, 57% of the lighting energy demand in 2030 would come from Asia [UNP-14]. Geographically, the LED encapsulation market is widespread in Asia-Pacific (APAC) also due to the availability of encapsulation of raw material in plenty. Assertive demand growth for consumer electronics and automobiles in this area, where the rapid changes in technology, is resulting in greater demand for high and medium power LEDs. This requirement, therefore, instills the LED encapsulation growth in the design of the end product.
- Asia-Pacific, including of the major LED giants (in China), is anticipated to have a significant market share during the forecast period. China is assumed to be an important revenue generator, as it holds more than 45% in the LED market, followed by Taiwan. Growing demand from South Korea and Taiwan particularly for silicon Encapsulants, due to the extensive productions of consumer electronics like tablets, TV, and monitors, also explain the huge market share. Australia, which is amongst the top 10 LED importers, in the world also adds to the growth of the LED encapsulation market.
The LED Encapsulation Market is moderately competitive and consists of several major players. In terms of market share, few of the major players currently dominate the market. Increasing investment is driving many new players that offer products at lower prices into the market, which makes the market moderately competitive. Some of the key players in the market are Dow Corning Corporation, NuSil Technology LLC, H.B. Fuller Company, Shin-Etsu Chemical Co., Ltd., Henkel AG & Co. KGaA. These players are constantly innovating and upgrading their product offerings to cater to the increasing market demand.
- Sep 2018 - Shin-Etsu Chemical Co., Ltd. implemented ¥110 billion in facility investments for its silicones business. It expanded its production capacity of silicone monomer, and various types of silicone fluids, resins and rubber end products at the company's main bases in Japan and globally. By means of these investments, Shin-Etsu Chemical Co., Ltd. further strengthened integrated production system, and at the same time, fortified its ability to contribute to issue solutions for customers.
- Jun 2018 - In response to the increased production of leading-edge semiconductor packages in the region, Panasonic announced the launch of the mass production of molded underfill semiconductor encapsulation materials in Shanghai, China. Through this expansion, the company will be able to provide faster and more efficient service for semiconductor packaging customers in China, where the majority of the smartphones are being manufactured.
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Table of Contents
- 1.1 Study Deliverables
- 1.2 Study Assumptions
- 1.3 Scope of the Study
2 RESEARCH METHODOLOGY
3 EXECUTIVE SUMMARY
4 MARKET DYNAMICS
- 4.1 Market Overview
- 4.2 Introduction to Market Drivers and Restraints
- 4.3 Market Drivers
- 4.3.1 Growing demand of high power LED applications
- 4.3.2 Growing Automotive lightning needs
- 4.4 Market Restraints
- 4.4.1 Volatile prices of encapsulant materials
- 4.4.2 Growing adoption of OLEDs in consumer electronics
- 4.5 Opportunities
- 4.5.1 R&D in Encapsulation technology and materials
- 4.6 Industry Attractiveness - Porter's Five Force Analysis
- 4.6.1 Threat of New Entrants
- 4.6.2 Bargaining Power of Buyers/Consumers
- 4.6.3 Bargaining Power of Suppliers
- 4.6.4 Threat of Substitute Products
- 4.6.5 Intensity of Competitive Rivalry
5 MARKET SEGMENTATION
- 5.1 By Encapsulant
- 5.1.1 Epoxy
- 5.1.2 Silicone (Methyl, Phenyl)
- 5.2 By End-user Applications
- 5.2.1 Commercial Lightning
- 5.2.2 Automotive
- 5.2.3 Consumer Electronics
- 5.3 Geography
- 5.3.1 North America
- 5.3.2 Europe
- 5.3.3 Asia Pacific
- 5.3.4 South America
- 5.3.5 Middle-East & Africa
6 COMPETITIVE LANDSCAPE
- 6.1 Company Profiles
- 6.1.1 Dow Corning Corporation
- 6.1.2 NuSil Technology LLC
- 6.1.3 H.B. Fuller Company
- 6.1.4 Shin-Etsu Chemical Co., Ltd.
- 6.1.5 Henkel AG & Co. KGaA
- 6.1.6 Hitachi Chemical Co. Ltd.
- 6.1.7 Panasonic Corporation
- 6.1.8 Epic Resins
- 6.1.9 Intertronics Ltd.
- 6.1.10 Cree, Inc.
- 6.1.11 OSRAM Licht AG
- 6.1.12 NationStar Optoelectornics Co Ltd.
- 6.1.13 Hangzhou Silan Microelectronics CO., Ltd.
7 INVESTMENT ANALYSIS
8 MARKET OPPORTUNITIES AND FUTURE TRENDS