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Lighting Manufacturers: Thrive In or Ruin the LED Lighting Industry?

The lighting industry arrived at a crossroads again. The progress in solid state lighting based on light-emitting diode (LED) technology has been breathtaking during the past ten years. The introduction of LEDs as a light source was a revolutionary event in the history of electric lighting. LED technology redefines the basic economics in lighting and brings in unprecedented application diversity. It not only creates a compelling value proposition for the user, but also extends the value chain of the industry. While LED lighting holds enormous opportunities for both the industry and market, the complexity of technology imposes great challenges that have fundamentally altered competitive dynamics.

The Prematurely Ageing Industry

10 years ago investors piled into the lighting industry. They had expected that the technological transformation would drive a fantastic return on investment (ROI). No doubt the shift toward LED is evident across the general lighting market because of the profound energy, economic, performance, and application benefits enabled by LED technology. However, the status quo makes them daunted. The lighting business in the era of solid state lighting is far less lucrative than what they had expected. Not only outside investors has a grim mood, the lighting industry itself is very pessimistic about the market going forward. While it's normal to see global venture investors fleeing from or shunning the stagnant industry, the move of many established players in the industry spinning off or selling their lighting boniness shows more worrying signs of backsliding.

Philips, the Dutch conglomerate that started out as a light bulb manufacturer 120 years ago, splitted off its lighting business in 2016 in an effort to expand its higher-margin healthcare business. In 2018, the independent Philips Lighting N.V. was renamed Signify N.V., which marks a definitive break from its origins. General Electric has been trying to completely exit its consumer lighting business which played a vital role in shaping its identity in the past, and sold its commercial lighting division in 2019 even the business was formed as a new kind of startup focusing on IoT lighting and energy services. With the sale of the lamps and the luminaires businesses, Osram, another "Big 3" player in the legacy lighting business, continues its transformation into a high-tech photonics company. Cree, the most renowned LED manufacturer, stripped away its lighting business in 2019, signaling the company's farewell to lighting-centric direction.

What Is Happening?

Major lighting players have opted for rationality over pride and steered clear of the lighting business that is central to their historical roots. This happened right after LEDs became the mainstream light source. The apparent cause is that it's extremely difficult to achieve a decent margin, but the deep-seated cause is that there is no sign of growth spurt on the horizon. Within the general lighting market, lighting manufacturers often have to compete on cost rather than differentiation. The conventional market had been dominated by a couple of large companies who carved up the market by taking advantage of large-scale, capital-intensive operations and strong branding power. But as LED lighting takes off, the landscape of competition completely changed.

LED lighting has an extended industrial chain that includes upstream production of semiconductor chips and packages; midstream manufacture of LED modules, power supplies, lighting controls, heat sinks and optics; and downstream design and assembly of LED lamps and luminaires. The upstream sector has entry barriers in terms of R&D costs and equipment investment. The midstream component suppliers harvest economy of scale advantages and/or technical know-how accumulated over a long time. Unlike the upstream and midstream markets which are saturated but the cuts of the markets are shared by a limited number of participants, the downstream market is awfully crowded. The wide, low cost availability of lamp and luminaire components creates low barriers to entry, which has prompted the entrance of a large number of “outsiders”. New entrants to the lighting industry bring new capacity and the desire to gain market share, but their capabilities are often limited to assembly operations and low levels of vertical integration.

There are vertically integrated lighting manufacturers that have in-house capabilities across downstream, midstream and even upstream. However, such type of vertical integration involves high capital expenditures and infrastructure investment, and demands a strong technical force and rich talent pool. This limits the number of companies that take this strategy. Long-established companies attempted to maximize profits by vertically integrating the industrial chain as before. Yet this advantage is not what it once was. The additional yet considerable supply from new entrants leads to production overcapacity which decreases the profit of the market participants. Since most newbie manufacturers have no financial burden on overhead (e.g. product development, documentation), intellectual property (IP) protection and marketing, they can focus their resources on assembly operations and are thus capable of offering low cost products that are very attractive to the entry-level markets. Intensified cost competition places increased pressure on already thin margins. When existing business fails to provide a critical funding source for investing in new products and solutions, established players and major investors lose their enthusiasm for the lighting business.

Whom to Blame?

We can't put all the blame on lighting manufacturers who parasitize low-cost assembly operations and dance along the edges of IP infringement. The root cause of a lackluster industry can actually be attributed to the industry's trouble adapting to drastic technological changes. Traditional global dominance by large vertically integrated companies had been established on a market with creeping changes in technology and application requirement. Interest groups sponsored or influenced by a handful of leading companies built a monopoly on industrial policies, market access standards and technical requirements. For the past few decades, these companies had been thriving from this monopoly. Lamps and luminaires had long been low-value-added products. Yet the industry's giants could still achieve a consistently decent margin from such simple, low-tech products because the competition among the limited number of players had been quite mild.

The game changing LED technology disrupted the equilibrium of competition maintained by traditional industry giants. The height of barriers to entry is the most significant determinant of industry competition and predictor of industry profitability. When capital-intensive investment is no longer a requirement, technically simple lighting products naturally become the startup products of the newbie manufacturers. In fact, the current turmoil in the lighting market can in part be ascribed to traditional industry giants and the interest groups that represent them. The low product standards that they set for fluorescent lamps have far-reaching effects on LED lighting. Under their enormous influence regulatory authorities turned a blind eye to high light flicker, poor color rendering, and biologically disruptive radiation of fluorescent lighting, which were never been issues with incandescent lighting. The switch from incandescent and halogen lamps to fluorescents marked a major deterioration in light quality in the history of interior lighting.

While low barriers to entry brought about fierce competition in the LED lighting industry, the flawed, low-standard measurement system inherited from fluorescent lighting traps the industry in an especially vicious circle. The outdated product standards can be easily met and gamed, allowing LED lighting manufacturers to churn out cheap, crappy products at minimal manufacturing costs. The industry giants and their interest groups lifted a rock only to drop it on their own feet when LED technology takes over the industry. It's the inability to bring the situation under control that sets off their panicked exit from the industry. LEDs perform significantly different from all legacy light sources and it's been a while since LEDs became the light source of choice for general lighting applications. Yet no standard measurement system has been established to evaluate the product performance and light quality of LED lamps and luminaires. It seems the market authorities and industrial organizations lost the momentum to oversee the industry.

The Unsuccessful Bet on LED Replacement Lamps

LED lighting products gained initial traction in the form of replacement lamps. The industry had high expectations for this type of applications as there are an estimated 40 billion sockets in the world. Offering product familiarity and providing similar usability to existing products also promote rapid customer acceptance of LED technology. Unfortunately, the bubble burst. It is hard to turn the low total cost of ownership (TCO) of LED lighting into a profit point in the consumer lighting market. For residential customers, energy savings over the life of the LED lamp are not as appealing as a low first cost. LED lamps, including light bulbs and tubes, are generally designed in standardized form factors and offered in similar specifications. It is difficult for general consumers to tell good from bad by comparison. These variables make the buying decision very straightforward. On the other side, considerable production overcapacity ends up in lamp manufacturers desperately dumping commoditized LED lamps at prices with a razor-thin profit margin.

The bet on LED replacement lamps has proven to be a failure when it comes to market development, technology popularization and product transition. Lack of consumer awareness and deficiency in market education are certainly the contributors to this failure. Nonetheless, the root cause lies in the disorganization of the lighting industry. Regulatory authorities seem locked in the times of incandescent lighting which has nothing to worry but efficiency (now the reverse is true). Lack of availability of a meaningful evaluation system causes that critical performance attributes of LED lamps and luminaires cannot be compared in a consistent manner. This allows LED lighting manufacturers to circumvent the key performance metrics such as flicker control, lumen maintenance, color stability, spectral quality, and driver reliability. As a result, they cut corners to compensate for the losses in a tough market. LED lamps are commonly low cost assemblies that shrink or even eliminate aluminum heat sinks, and use barebones driver circuits and cheap LED packages.

LED lamps are inherently a compromise between new technology and old product design. LEDs are current-driven, self-heating semiconductor devices. With bulb and tube form factors, there is no adequate space to accommodate a high performance driver circuit and no natural thermal path to transfer heat away from the LED packages. This fundamental defect compounds the poor light quality and short service life of LED lamps. Poor product quality eventually leads to a negative consumer impression on LED lighting products. The LED replacement lamp market has become a "chicken rib" for lighting manufacturers—tasteless when eaten but a pity to throw away. The roadmap of LED lamps will follow that of conventional lamps. The LED lamp industry will consolidate to a small number of large manufacturers and a batch of niche manufacturers.

Look Beyond

The full potential of LED lighting can only be unlocked when a holistic approach is taken to effectively manage the thermal, electrical and optical characteristics of LEDs. LED lamps are essentially a superfluous element in the ecosystem of LED lighting because their role as a light source is already filled by LED packages. They are a transitional solution used principally for retrofitting conventional light fixtures. The design of a high-performing LED lighting system is a multidimensional engineering work that necessitates luminaire-level integration of LED packages, thermal management system, driver circuitry and optics. Lighting manufacturers should throw their efforts and resources into the luminaire market, instead of the diminishing lamp market.

To avoid confusion, it might be worthwhile to define "lamps" and luminaires" here. A lamp is an assembly comprised of a base for receiving electrical power and all necessary components for generating optical radiation. Lamps are constructed in accordance with universal standards which facilitate the substitution of lamps by other manufacturers. An LED lamp is usually an integrated assembly comprised of LED packages, a driver circuit, a base, and other optical, electrical, thermal, and mechanical components. Examples of LED lamps include A19 bulbs, GU10 bulbs, and T8 tubes. A luminaire or a light fixture refers to a complete lighting system which is designed and constructed around light sources (bulbs, tubes, LEDs). LED luminaires typically refer to integrated LED lighting systems, rather than lamp-based LED luminaires that use LED lamps (bulbs or tubes) as the light source. An integrated LED luminaire consists an LED assembly or LED modules, a matched driver, together with parts to provide heat dissipation, environmental protection and mechanical support, and optics to control the distribution of emitted light. Integrated design allows LEDs to be operated by full-featured driver circuitry and thermally managed by a robust system that uses the luminaire housing as the heat sink. Using LEDs as light sources also lends flexibility to luminaire design with regards to physical appearance and light distribution.

Conventional light sources have distinctive operational characteristics and optical performances. They are limited to serve respective applications, e.g. halogen and fluorescent lamps for commercial and residential lighting, metal halide lamps for high bay and sports lighting, high pleasure sodium lamps for roadway lighting. In contrast, LEDs are a universally applicable light source. From residential, commercial, industrial, retail, institutional, hospitality, and office lighting to architectural, landscape, sports, road and street lighting, there is an almost infinite range of lighting applications that can find the footprint of LEDs. Even within the general lighting market, the stage for ambitious lighting manufacturers is as unbounded as the frontier of LED applications. Solid state lighting breathes new life into the stagnant industry. So the problem really is many industry participants get boxed in established ways of thinking.

Integration Is the Key

Due to overcapacity in manufacturing, commoditization of LED technology is happening not only in the lamp market, but also in the luminaire market. Ever since the decline of the lamp business, the excess capacity was shifted to luminaire production. The "product transition" was very easy for assembly suppliers because of the ease of purchase and cost competitiveness of off-the-shelf power supplies, optical parts, heat sinks, housings and enclosures. As can be imagined, these assembly business veterans continue to compete head-on in the luminaire market, resulting in a bloody "red ocean" of rivals who fight over a shrinking profit pool. Obviously, this is not a sustainable business.

The entire dynamics of the lighting market are in rapid evolution. No one should be under any illusion of surviving with low-value-added assembly business. Value is moving toward systems, solutions and services. The composition of both lighting systems and lighting applications is poised to grow more complex as lighting solutions are increasingly required to deliver value beyond light. Power of integration is today's leading success factor—integration of LED packages into a lighting product, integration of luminaires into a lighting project, and integration of new value and features into a lighting solution. Commercial, industrial and government customers are increasingly looking to buy an integrated solution. This is not as simple as offering a broad portfolio of luminaires. The ability to create customizable and application-centric solutions will become more critical. Additionally, equipping the workforce with local and customer-specific expertise will be important for developing new value propositions for buyers.

In a rapidly changing industry, a crucial source of competitive advantage is niche concentration. Lighting manufacturers must change their mind-set, from one that delivers a huge portfolio of products with no great advantage to one that offers a niche category of highly competitive products. For lighting manufacturers that serve vertical markets, their focus must be shifted from selling products to delivering integrated lighting solutions. While a relentless focus on cost optimization will be necessary, identifying key differentiators that appeal to a target market or customer is paramount. A manufacturer's reputation and brand image depend on the differentiators it offers. Differentiation can be created through distinctive designs with compelling aesthetics, through superior technical specifications, through value-added features, and/or through professional services. All these differentiators call for multidimensional integration.

Quality of Light

Light, like air and water, is a fundamental part of life. Quality lighting contributes to improved quality of life. Humans manage to breathe fresh air and drink clean water but have seldom paid attention to the quality of light. For a long time, the impetus for innovations in the lighting industry has been the efficiency of the product. And oftentimes the efficiency is achieved at the expense of compromised spectral quality. The commoditization of lighting technology is inevitably accompanied with low cost designs which have further deteriorated the quality of light. For most people, high quality electric light may be a thing of the past when lighting was provided by incandescent and halogen bulbs. Light emitted by tungsten filaments uniformly spreads radiant power across the visible portion of the electromagnetic spectrum, providing a spectral quality comparable to natural daylight. With incandescent lighting, flicker has never been a concern because the tungsten filament radiators have a relatively long persistence.

Fluorescent lighting changed all that. Fluorescent lamps produce visible light through fluorescence of a phosphor coating with ultraviolet pumping light. In theory, light with excellent spectral quality can be produced using this technology. But the obsessive pursuit of luminous efficacy rewards shorter wavelength light rather longer wavelength light. This is because phosphor down-conversion for longer wavelength light involves a high Stokes energy loss and the light sensitivity of the eye in this spectral region is very low. As a result, commercially available fluorescent lamps come with a spectral power distribution (SPD) that contains a high percentage of short wavelength light in the blue spectral band. The inconsistent distribution of radiant power across the visible spectrum significantly compromises the light source's color rendering performance. A typical incandescent bulb have a color rendering index (CRI) greater than 95, and the general CRI of fluorescent lamps is in the 75 - 85 range. CRI is a flawed metric as it does not reflect the wavelength distribution of a light source across the entire visible spectrum. The SPD of fluorescent lamps is usually deficient in key wavelengths needed for rendering saturated colors. Under fluorescent lighting, colors of objects or environments can be intensely distorted and appear unnatural.

While a typical 80 CRI of a light source is tolerable for most visual tasks, the aggressive promotion of fluorescent lamps with an extremely high correlated color temperature (CCT) for nighttime lighting is indeed unethical. Similar to a high CRI light source, the conversion loss from Stokes shift is very high for a warm white or low CCT light source and a significant portion of radiant power is located in spectral regions where the eye has little sensitivity. The higher the color temperature of a light source, the higher its luminous efficacy is. This results in the flooding of 6000 K - 6500 K fluorescent lights on the market. A high color temperature is associated with a high amount of blue radiation. White light with a CCT in the range of 6000 K to 6500 K contains a very high blue content in the spectral composition. Exposure to blue-rich light after about 90 minutes at night can lead to acute melatonin suppression, which discourages a restorative sleep.

Fluorescent lighting also brought to the human world another health risk contributor—flicker. Flicker can cause eyestrain and headaches. In vulnerable populations it can even induce epileptic seizures and aggravating autistic conditions. Gas discharge lamps have very short persistence by nature, which means their ballasts must be designed to deliver a stable or high frequency power for flicker-free operation. However, flicker control has never been a mandatory performance metric. This causes the lighting industry to ignore this metric for savings on precision load regulation circuitry. Although visible flicker is usually suppressed, high-frequency imperceptible flicker still has negative effects on health. Fluorescent lamps operated by low cost ballasts often exhibit greater 30 percent flicker at 120 Hz, which is intolerable to a significant number of individuals.

The tradeoff between quality and efficacy has remained in the era of LED lighting. The emission mechanism of LEDs is similar to that of fluorescent lamps, except for that LEDs use semiconductor emitters to pump phosphors. In addition to internal quantum efficiency of semiconductor chips, the white efficacy of LED packages depends on the phosphors' quantum yield, the Stokes shift, and the spectral power distribution. Despite having a very high efficiency, the lighting industry still churns out LED luminaires with low color rendition and high CCTs. Lighting regulations and energy programs place their value purely in the efficacy and ignore the more critical aspect of lighting—light quality. This encourages lighting manufacturers to continue sacrifice quality for efficacy. LEDs place high demand on the regulation of the drive current as they have no persistence and highly sensitive to changes in electrical current. To ensure the light output does not fluctuate at a cyclic frequency of line voltage, a constant current driver is used to keep a consistent current running through the LEDs. However, low cost drivers do not provide complete suppression of large ripples in the DC current provided to the LEDs, which results in light flicker.

Do we have to sacrifice the quality of light just to save a little power and money? Most families as well as facilities, such as offices, schools, hospitality spaces and health care centers, afford high quality lighting. They just don't realize the health consequences of poor quality lighting. The lighting industry has been misguiding consumers into judging the value of a lighting product purely by its luminous efficacy. People aspire to live a better life and they deserve good lighting particularly at their living spaces where they relax and recharge. It's so ridiculous is that the residential market is flooded with the crappiest LED lamps and luminaires. Even in industrial and commercial applications the highest precedence of lighting design is not the energy efficiency of lighting systems. Occupant satisfaction, task performance, organizational productivity, employee health and well-being are some of design considerations that need to be prioritized. High qualitative performance of a lighting system is a prerequisite to a successful lighting design.

The improving consumer awareness deems the quality of light a strong value proposition. Lighting manufacturers must orient their research and development to get ahead of this trend.

Human Centric Lighting

Quality lighting not only addresses the traditional goals of visual comfort, task performance, safety and aesthetics, but also has been shown to stimulate positive effects on human psychology and physiology. One of the driving forces behind much of the latest innovations in lighting industry is human centric lighting (HCL). HCL goes beyond the basic visual needs to support physiological and psychological health of humans. Humans use environmental cues from light to synchronize the body's internal biological clock to the earth’s 24-hour light-dark rotational cycle. The internal biological clock located in the suprachiasmatic nuclei (SCN) of the hypothalamus regulates human circadian rhythms. As large parts of modern life take place indoor, there would be discrepancies between the biological rhythm and the external day/night rhythm due to lack of circadian entrainment with static lighting. Disruption of biological rhythm may affect normal release of hormones such as melatonin and cortisol. Disturbed hormone production can impede cell metabolism and proliferation, obstruct the expression of clock genes correlated with cancer and diabetes risk, and impair cognitive, psychological and social performance.

Human centric lighting explores a full dynamic lighting scheme to reinforce the body's circadian rhythm and the natural cycle of biological functions. Conventional lighting systems deliver static white light throughout the day, whereas human centric lighting systems bring the dynamics of natural daylight into the building. The spectral composition of interior lighting as well as its intensity is oriented to reflect the characteristics of exterior daylight. The essence of human centric lighting is dynamic control the bioactive blue dosage. Although rods and cones participate in circadian phototransduction, the primary retinal photoreceptors that transduce light into neural signals for the biological clock are intrinsically photosensitive retinal ganglion cells (ipRGCs). ipRGCs have a spectral sensitivity that peaks at short visible wavelengths around 460-490 nm. Exposure to blue light in this band of wavelengths suppresses melatonin production and increases secretion of the other hormones such as cortisol, dopamine, and serotonin.

Human centric lighting delivers healthy bioactive blue dosages at the right biological time through tunable white technology. Dynamic white systems use sophisticated LED drivers and multi-channel light engines to enable flexible adjustment of spectral composition and intensity of the light. These intelligently adaptive and/or user-programmable systems offer the freedom to evoke particular emotional, physiological and psychological responses for improved atmosphere, performance, motivation, concentration and quality of life in homes, offices, schools, retail spaces, and healthcare environments. HCL systems will proliferate in coming years. This calls for the lighting industry to stay at the forefront of tunable white lighting technology and thus to keep up with the fast pace of HCL adoptions.

Be Smart, Get Connected

LED technology has afforded lighting manufacturers the chance to build more controls into their products. This gives momentum to the development of smart and connected lighting systems that provide features and benefits not obtainable with traditional lighting systems. Rapid growth in user acceptance of using smartphones and tablets as the interface to lighting control is driving massive growth in the smart lighting market. Smart lighting has multiple dimensions. Making lights more responsive to personal presence is a basic dimension of smart lighting. Building intelligence and connectivity into luminaires promises to deliver valuable efficiency and productivity gains. Through a controls ready driver, LEDs can be easily integrated with sensors, embedded processors, and communication modules to deliver highly adaptive lighting.

Connected lighting systems use either a wireless or wired communication platform to simplify commissioning and software upgrades as well as light management. LED lights are increasingly being designed to support the latest wireless technologies. Wireless solutions provide flexibility in deployment of endpoints while enabling faster, easier, and cost effective installation and commissioning. Wireless lighting systems are generally organized using the mesh architecture where each device in the network called a node can interact with a number of surrounding nodes and communicate with a controller through multiple pathways. Mesh networks are self-configuring and self-healing. The interoperability and standardization offered by wireless mesh protocols such as ZigBee, Z-Wave, Bluetooth Mesh, and Thread allow the integration of other building automation and energy management tasks into the network. This integration provides opportunities for creating a wide array of services, benefits, and revenue streams through an end-to-end software framework. Connected lighting systems can also be implemented on a wired platform using Power over Ethernet (PoE) technology. PoE allows power to be delivered on the same low-voltage cable infrastructure that delivers the Ethernet data. PoE lighting is a promising technology that is expected to be widely deployed in commercial buildings.

The convergence of LED lighting with the Internet of Things (IoT) opens up a whole new world of possibilities for the lighting industry. The introduction of IoT as the backbone for connected lighting systems enables a wide array of applications to be created on IP-based network infrastructure. The IP capability allows lighting products and other smart nodes to interoperate, share data and services, and compose into larger, more complex and sophisticated applications. Through an IoT platform and a wealth of sensors, intelligent lighting systems are transformed into context-aware smart devices that can communicate with IoT gateways and devices within the network and turn a digital command into physical action. IoT-enabled lighting solutions can drive significant operational efficiencies, enable a host of data-driven services, and yield new revenue streams. The megatrend introduced by IoT is pushing more investments into addressing challenges with interoperability, reliability and security of connected lighting in downstream industry.

Excel in Electrical Engineering and Software Development

No doubt thermal, optical and mechanical design and engineering of LED luminaires are vitally important. However, it's frequently the level of excellence in electrical engineering and software development that finalize the core competency of an LED lighting manufacturer.

LED luminaires are essentially electronics. Their performance, efficiency, reliability, light quality (flicker), functionality and cost competitiveness to a large extent depend on how the driver and control circuitry are designed. The driver is the heartbeat of any LED lighting product. Many issues enter into the design of a driver. The nearly instantaneous response of LEDs to changing current and their electrically and thermally interdependent characteristic necessitate tight regulation of the drive current. The need for longevity from a driver runs parallel with the design goal of optimal energy efficiency as the driver is often the first component of an LED luminaire to fail in real life applications. The lighting industry has been challenged with addressing these variables while squeezing costs. The driver constitutes a major cost component of an LED luminaire. Given the very close procurement costs of LEDs from upstream suppliers and heat sinks of which the heat dissipation capacity must match the system power load, any innovation in driver cost optimization will translate to a significant price advantage of the product.

The rising popularity of intelligent, connected lighting is fueling immense integration of controls, processing and communication capabilities into LED luminaires and lighting networks. The role of the LED driver is critical to seamless controls implementation as it must work with various digital interfaces to facilitate deployment of different technologies. Over time, there will be less differentiation at the hardware level and it's the software, algorithms and human interface design that will help lighting manufacturers stand out from the competition. With intelligence moving to cloud-based IoT networks, the market needs lighting solutions that are very adaptable, very scalable, and very interoperable. Compatibility with protocols, seamless integration with IoT platforms, user experience of smartphone apps, and secure data flow and powerful data processing across the network will be essential to the adoption of a particular solution.

Explore Opportunities in Vertical Markets

Compared with conventional lighting technologies, LEDs have a plethora of advantages such as high energy efficiency, superior controllability, spectral customizability, UV- and IR-free radiation, solid state durability, low voltage operation, long operational life, and high design flexibility. These attributes not only are highly desired for mainstream lighting applications (e.g. residential, commercial, industrial, and outdoor lighting), but also appeal to a vast variety of vertical markets. Challenges and opportunities coexist in exploring untapped potential of vertical markets. These segments are in general less saturated than the general lighting market but have relatively high entry barriers in terms of technical know-how, product certification and/or customer development. Nothing ventured, nothing gained. Opportunities arising from technological transformation in vertical markets are pretty clear, but they're fleeting.

The horticulture industry holds enormous potential for LED applications because the market and technology reinforce each other. The ability of LEDs to stimulate specific plant photoreceptors with high spectral and energy efficiency fundamentally improves economics and boosts dynamics of the horticulture market. The growing investment in vertical farming and controlled environment agriculture (CEA) in turn contributes to an expanding market for LED grow lights.

The automotive industry has an increasingly large base of committed customers who looks for an energy efficient lighting solution to minimize the load on the alternator and the drain on the battery. LEDs not only deliver high efficiency lighting over a long rated life, but also enhance a degree of design freedom with their compact form factors. Automotive manufacturers harness the unique styling possibility of LED lighting to design very distinctive lights that give cars a highly differentiating look. LEDs have become a staple light source for both OEM and aftermarket daytime running lights (DRL), brake lights, turn signals and vehicle interior lighting. LEDs also find growing applications in the low beam and high beam of the headlights. The adaptive front-lighting system (AFS), enabled by an LED matrix, operates with such precision that it illuminates specific zones of the road with high beam without dazzling other road users.

Sports lighting sets the stage for high power LED luminaires which deliver workhorse performance while alleviating facility managers of the burden of high running costs with metal halide lighting. The high demand of LED sports lighting systems is driven by the springing up of sports facilities all over the world and the pressing need of upgrading lighting systems in existing facilities. The TCO benefit offered by LED lighting is tremendous. As media goes through its own revolution toward high-definition TV broadcasting, the quality of illumination becomes a critical consideration in stadium and arena lighting designs. LED technology can take that challenge.

The hazardous location lighting market, one of the most profitable niches in the lighting industry, is quite low profile because product accreditation and certification set a high bar. Hazardous locations are areas where fire or explosion hazards may exist due to the presence of flammable gases or vapors, combustible dust, flammable liquids, or ignitable fibers or flyings. A multitude of industrial facilities are classified as hazardous locations, which include petroleum refineries, offshore oil platforms, drilling rigs, coal preparation and processing plants, gasoline storage and dispensing areas, chemical plants, flourmills, sawmills, powdering and lacquering facilities.

Medical lighting products such as surgical task lights and examination lights are undergoing a massive technological migration to LED. The spectral power distribution of light sources used in these products is critically important, as diagnostic and operation-related decisions are at times made based on color discrimination and color fidelity. LED technology allows to optimize the spectral composition of light sources for medical applications. Aside from the ability to provide faithful color reproduction, LEDs produces no optical radiation at offensive or harmful wavelengths. The advantage of radiating no thermal energy makes LED luminaires particularly suited to surgical applications.

Other noteworthy niche applications and vertical markets include:

• Acoustic lighting
• Emergency lighting
• Solar outdoor lighting
• Marine lighting
• Flashlights and headlamps
• Vehicle-mounted work lights
• High ambient temperature LED lighting
• Cleanroom lighting
• Poultry lighting
• Aircraft cabin lighting
• Videography and photography lighting
• Stage lighting
• UV disinfection

Embrace a Branding Mindset

The lighting market is overloaded with crappy products and meaningless warranties. Commoditization weakens the pricing power of lighting manufacturers and pushes them to cut corners. When you position yourself purely as a manufacturer, you'll very likely follow the crowd and often think you're expected to only do what your competitors are doing. When you have a branding mindset, on the other hand, you'll try to differentiate yourself from your competitors. The distinction of your products and services will not only strengthen your pricing power but also bring in word of mouth and referrals. Every business, be it private label, contract manufacturing or branded manufacturing, needs to grow customer recognition and build a bond of trust in order to be sustainable. Whatever the challenge, never compromise what you have offered to your customer because your brand is your promise to your customer!