1, the market share of ultraviolet LED increased by three times.
In this decade, the development of technology, market and industry has completely changed the market prospects of ultraviolet LEDs, enabling ultraviolet LED technology to gain more market share from other ultraviolet lighting technologies. From the 8% market share in 2008, ultraviolet LED is expected to reach 25% market share in 2008.
In 2008, UV LED is still considered as a new technology and industry trying to enter promising applications, such as UV curing and anti-counterfeiting detection. Then, the LED industry only looks at the booming display applications, and thinks that ordinary lighting is the most advantageous application of visible LEDs, considering the rise of ordinary lighting in preparation. But the reality is quite different. Asian manufacturers have entered and created excess capacity and strong price pressures, which have turned what might have been a "blue sea" market into a blood bath. This has had a direct impact on the UV LED industry, in 2008, about 10 manufacturers, until 2018 there are more than 65 manufacturers. Since 2010, some visible LED manufacturers have turned to the ultraviolet LED market in search of new growth momentum and higher profit margins.
The UVA LED market is the first to witness this industrial development, experiencing a strong price drop, further accelerating the penetration of technology. But soon the dream has become a nightmare. After several years of double-digit growth, UV curing application revenue, representing more than 80% of the UV LED market, began to decline due to commercialization and competitive environment. In the short to medium term, only innovative enterprises can make profits in this field.
The UVB / UVC LED market has little impact on new entrants. This is because UVB / UVC LED technology is more difficult to access than UVA LED, so the entry threshold is much higher. In addition, the degree of application of UVB / UVC LED is still not high, so the new manufacturers will help promote the development of equipment. The UVB / UVC market is moving slowly, although the equipment is good enough at both performance and cost levels. Ultraviolet LED systems need to be extended to benefit fully from this technology, which takes more time than expected.
In the short term, the UV LED industry will go through a slow phase, as the UV curing market begins to stabilize, and the prosperity of the UV disinfection market will be delayed. Against this background, we expect the UV LED market to reach $320 million by 2020, from $160 million in 2017, and then boom driven by UVC applications to $1 billion by 2023.
2. The continuous development of UV LED opens the way for new high-power applications.
Over the past decade, the performance of ultraviolet LED has been continuously improved, from the very low power output equipment to some applications now gradually replace the traditional ultraviolet lamps and lanterns.
Manufacturers of UVA LED chips have increased the external quantum efficiency (EQE) of their products by five to six times in 10 years, now reaching 50-60%. In addition, intensified competition led to a sharp decline in prices. This makes UV LED possible to be widely used in UV curing applications, such as electronic adhesives or inkjet printing. The next step will include more complex applications, such as wood coatings, flexographic printing and medical adhesives. But much of the work here will focus on system development. And not just to improve the performance of UV LED.
EQE has also improved in the UVB / UVC range, but it is still below 10% for most commercial devices, and every 1% increase seems increasingly difficult. But this has not restricted the investment and development of manufacturing industry.
This acceleration is further highlighted in recent announcements by some UV LED manufacturers, such as the LG 2018/2019 package target of 150-200 MW. This combination of price reduction and performance improvement will also integrate UV LED into new applications. As LED integrates into the consumer market for white products, such as large ovens and even coffee machines, it may be a strong growth point in the future.
3, business model and strategy evolution: more cooperation and acquisitions are coming.
A large part of visible LED industry has turned to ultraviolet LED. However, according to the target wavelength, the strategy formulated varies from manufacturer to manufacturer. Some manufacturers still focus on equipment manufacturing while others vertically integrate modules and systems. For example, in UVA LEDs, Ushio produces UVALED chips, encapsulates, and solidifies modules for printer manufacturers or end users. In UVC, Nikkiso was originally a manufacturer of UVC LEDs, but by 2016 it had shifted to module and system levels by acquiring Aqui Sense Technologies.
In addition to UV LED manufacturers, some new entrants are also trying to enter the industry, mainly at the module or system level, which represents the best point in business opportunities. The only company lacking is the traditional supplier of UVC system. It still seems to be in a wait-and-see mode.