Light-emitting diode (LED) manufacturers are now looking to develop niche application markets that can provide higher margins as the price competition in the LED lighting market has become too difficult for them. Among these niche application markets, ultraviolet (UV) LED has attracted investments from many manufacturers because of its enormous market value. The UV LED market has much higher technological barrier to entry, so prices of its products are several tens of times greater than those of the general LED products. LEDinside, a division of TrendForce, states that the global UV LED market in 2015 is estimated at US$122 million, which is around the same level as in 2014, in its 2015 Global LED Industry Supply and Demand Database Report. The absence of noticeable growth in the market value this year is mainly attributed to the rapid decline in UV-A LED prices (UV-A spectrum is between 320~400nm in wavelength).
“On account of the sharp price decline in this year’s UV-A LED market, LED manufacturers that focus on UV applications will step up efforts in technological research and development so that they can advance into the UV-C LED (under 280nm in wavelength) market in the next two years,” said Joanne Wu, LEDinside assistant research manager. “Since UV LED’s ‘blue ocean’ market is based on technological innovations and customizable product designs, manufacturers can expect wider applications to emerge, such as DUV SMS communication. By 2020, the market value of UV LED is projected to reach US$356 million.”
Customization will bring relief to the price pressure in the UV-A LED market and investments in UV-C LED research will bring breakthroughs
UV-A LEDs are primarily used for curing. Presently, curing also represents 52% of the UV-A market in terms of applications. Wu noted that UV-A LED manufacturers will evade the challenge of price competition by offering highly customizable solutions in the future. This means working closely with curing machine vendors in every aspect of product development, such as the LED wavelength, the design of the UV LED module, the composition of the UV adhesive and the design of the cooling system.
One of the UV-C LED’s applications that have huge growth potential in market value and high product margins is sterilization/purification. Countries that have recently started to invest in the development of UV-C LED products include Japan, the U.S. and South Korea. While the production of UV-C LEDs is waiting for a major breakthrough, the technology is likely reach maturity in 2017, when the ban on mercury-vapor lamps will be implemented. In sum, LEDinside anticipates that demand for UV-C LED solutions to be the main growth driver in the overall UV LED application market in the near future.