Chip on board LED Market Analysis

Chip On Board (COB) LED Market (Global, 2024)

Introduction

The chip-on-board LED market is expected to make considerable progress as the demand for high-performance lighting solutions continues to rise in different industries. This new technology, which involves mounting multiple LED chips directly onto a single board, offers high energy efficiency, improved heat dissipation and a smaller form factor, making it an attractive choice for both manufacturers and consumers. Moreover, as energy conservation and the pursuit of greener technology continue to gain importance in various industries, COB LEDs are becoming a preferred choice for a wide range of applications, from general lighting to the automobile and display industries. The chip-on-board LED market is also characterized by rapid technological development, as manufacturers strive to reduce the cost of their products and improve performance. The trend towards smart lighting and the integration of the Internet of Things (IoT) into lighting solutions is expected to boost the market even further.

PESTLE Analysis

Political

COB LED market is expected to be influenced by various political factors in 2024, such as government policies promoting energy efficiency. The United States Department of Energy has allocated more than 50 million dollars for solid-state lighting research, which includes COB LEDs. In addition, the tariffs on imported products may affect the price and supply of the products.

Economic

In 2024 the economic situation in the COB LED market is influenced by the fluctuations in the cost of raw materials and the purchasing power of consumers. The price of gallium, the main material used in the manufacture of LEDs, rose by 15% over the previous year, reaching approximately $300 per kilogram. Sales of consumer electronics are expected to exceed $1.2 trillion in 2024. Energy-efficient lighting solutions, including COB LEDs, will be in great demand as consumers increasingly factor the environment into their purchasing decisions.

Social

In 2024, the tendency in social trends was towards an increased demand for energy-saving lighting solutions. According to a survey, 70 per cent of consumers were willing to pay a premium for such solutions. COB LEDs, known for their superior energy efficiency and longer life, were in high demand. Also, with the increase in urbanization, the demand for smart lighting in the cities was expected to grow. By 2025, it was expected that 60 per cent of the population would live in cities.

Technological

The COB LED market will grow quickly by 2024, as technological developments rapidly change. Since the beginning of the year, the luminous efficiency of the chip has been increased by 20 percent, and the luminous efficiency of the COB LED is over 200 lm / W. And it is estimated that 40 percent of the new COB LED products will be able to connect to the Internet, and thus have the ability to control and manage energy in the residential and commercial fields.

Legal

Legal factors that will have an impact on the CB LED market in 2024 are regulations regarding energy-saving and environmentalism. In the European Union, the Ecodesign Directive stipulates that by 2025 all lighting products must meet certain energy-saving requirements. These regulations are of crucial importance to manufacturers, because fines of up to 100,000 € per infringement of the regulations may result, which will affect their market entry and operating costs.

Environmental

COB LEDs are increasingly important for the environment, with a focus on reducing waste and carbon emissions. The United Nations estimates that by 2030 the quantity of e-waste will reach 74 million metric tons. COB LEDs, with their longer lifetimes and greater energy efficiency, help to reduce waste and lower energy consumption.

Porter's Five Forces

Threat of New Entrants

The COB LED market has moderate barriers to entry because of the high investment in technology and production. There is also the need to meet the growing demand for energy-saving lighting solutions. The new entrants need to master the regulatory requirements and establish distribution channels, which are difficult. However, the technological development and the increasing availability of resources may encourage new entrants to enter the market.

Bargaining Power of Suppliers

Suppliers’ bargaining power is relatively low in the COB LED market, as there are many suppliers for raw materials and components. Suppliers are well spread out, so that the influence of any one supplier is limited. Also, switching suppliers is not a costly affair for manufacturers, which further reduces the bargaining power of suppliers.

Bargaining Power of Buyers

High – The buyers in the COB LED market have high bargaining power, as they are becoming more and more aware of their options and are able to easily compare products from different manufacturers. There are many competitors with similar products, which gives buyers a great opportunity to bargain for better prices and terms. The increasing focus on energy-efficiency and sustainability also gives buyers an opportunity to demand higher quality and more innovation.

Threat of Substitutes

COB LED market has a medium threat of substitutes, as there are a number of alternative lighting methods such as incandescent, fluorescent and other LEDs. However, the unique advantages of COB LEDs, such as higher efficiency, better cooling and smaller size, help to offset this threat. As consumers become more and more environmentally conscious, the demand for energy-saving solutions will increase, thereby reducing the threat of substitutes.

Competitive Rivalry

Competition in the COB LED market is high, with the presence of many established players and new entrants vying for market share. Companies are therefore compelled to differentiate their products, which in turn has led to price wars and the introduction of new products. Moreover, rapid technological development and the growing demand for energy-efficient lighting solutions are intensifying competition, which is driving companies to focus on innovation and customer service.

SWOT Analysis

Strengths

• High luminous efficiency and brightness compared to traditional LED technologies.
• Compact design allows for more flexible applications in various lighting solutions.
• Lower thermal resistance leads to improved heat dissipation and longer lifespan.

Weaknesses

• Higher initial manufacturing costs compared to conventional LED technologies.
• Complexity in production processes may lead to quality control challenges.
• Limited consumer awareness and understanding of COB technology.

Opportunities

• Growing demand for energy-efficient lighting solutions in residential and commercial sectors.
• Expansion of smart lighting systems and IoT integration in lighting applications.
• Increasing investments in research and development for advanced COB LED technologies.

Threats

• Intense competition from alternative lighting technologies such as OLED and traditional LEDs.
• Potential supply chain disruptions affecting raw material availability.
• Regulatory changes and environmental concerns regarding electronic waste.

Summary

The Chip On Board (COB) LED market in 2024 is characterized by its high efficiency and compact design, which are its main advantages. Its main challenges are its high production costs and the lack of awareness of consumers. Opportunities for growth are plentiful, especially in the form of energy-efficient solutions and smart lighting systems. However, to exploit these opportunities, the market has to deal with threats from competing technology and potential supply chain issues.