Attractive Opportunities for the Growth of LED Packaging Market

The LED packaging market size was valued at USD 17.08 billion in 2016 and is expected to reach USD 26.39 billion by 2023, at a CAGR of 6.2% during the forecast period. The base year considered for the study is 2016 and the forecast period is between 2017 and 2023.

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The global LED packaging market size is projected to be valued at USD 26.39 Billion by 2023, at a CAGR of 6.2% from 2017 to 2023. The growth of the market is expected to be driven by the increasing use of LEDs in various end-user industries such as automotive, backlighting, and other products. The major factors driving the growth of the market include increasing demand for high power grade LED packages for lighting applications, rising demand for LED packages in the display panel market, growing government initiatives and regulations to adopt energy-efficient LEDs, and increasing demand for smart lighting solutions. The value chain of market comprises R&D activity, original equipment manufacturers, system integrators, marketing and sales, and after-sale service.

The market is segmented on the basis of package type: surface mount device packages (SMD), chip on board package (COB), chip scale package (CSP), and others. Currently, the market is dominated by SMD packaging LEDs; however, the market for CSP LEDs is expected to register the highest growth rate during the forecast period. Increased adoption of chip scale package is mainly due to its advantages, such as reduced package footprint, thin profile, reduced weight, better electrical performance, and area array distribution of connections, over SMD packages.

The LED packaging market is further segmented on the basis of packaging material: lead frames, substrate, ceramic packages, bonding wire, encapsulation resin, and other packaging materials. The substrates accounted as the largest segment in terms of materials used for packaging LEDs in 2016. Also, this segment is projected to witness growth at the highest CAGR during the forecast period.  The factor that drives the market for substrates is the high power density of devices. The market for encapsulation resins is driven by the increased use of silicon material offering better reliability/lifetime than traditional epoxy materials.

LEDs are used in various applications such as general lighting, automotive lighting, backlighting, and others.  LED packages in the general lighting application are expected to have the largest market size due to the growth in residential lighting and industrial lighting applications. The potential to save energy on a large scale is the major factor for the growth of LEDs used for general lighting applications. The market for the industrial lighting application is estimated to grow at the highest rate and is expected to drive the LED packaging market due to the increasing demand of LEDs for various industrial applications such as industrial bay areas, cold storage areas, and other functional areas.

Of all the regions, APAC dominates the market The rising demand for LEDs in this region is mainly driven by increased adoption rate and government incentives. Europe is estimated as the second-largest markets across the world. The market in this region is mainly driven by growing opportunities for the automotive industry.