Motion: The Major Multinational LED Lighting Companies will continue to dominate the LED Market in 2020.
By the meaning of multinationals, they are companies that operate internationally, usually with subsidiaries, offices or production facilities in more than one country. And dominating market is defined as the market share gained exceeding 50% globally.
Undeniably, the current top 10 market players (table 1) are all multinationals with presence mainly in the 3 major markets of Asia, Europe and North America. But it does not necessarily mean that they are going to dominate the market for another 5 to 7 years. In 2011, the top ten manufacturers accounted for 68% of all LED component sales but 75% of total sales in 2010. A further decline can be foreseen and even a lost in the market leadership position in the coming years due to the environmental changes including government policy and subsidies for local companies in the emerging market and industry development changes. Considering all the factors, the role of multinationals and emerging players will change across time and thus the market share.
First, government policy provides a strong support for the local-based companies to fast grow in the emerging market and create barrier for multinationals to enter and expand the local market. In the coming decade, Asia is projected to be one of the highest growth regions and account for over 35% of the global lighting market and expected to rise to 45% by 2020 with China being the largest and most fast –growing market . Thus Asia especially China is a determining market to claim market share leadership. So is multinationals doomed to dominate these emerging market? The answer is not necessary. Asia, in addition to becoming the major LED lighting consumer, is expected to be the chief supplier of LED chips and packages with factories in China, Taiwan, Korea, and Japan, taking over multinationals to dominate local and regional markets. Take China as an example. China’s 12th FYP are projected to move China’s IC manufacturing industry in two key directions: increasing and accelerating concentration within the sector and increasing the number of firms funded from security market listings. So far, China has emerged as a significant source of new companies and more recently of financial funding for semiconductor start-ups. During 2010, China overshadowed the US and the rest of the world with the most technology IPOs—67 Chinese companies completed their IPOs in 2010 as compared to 19 US companies. At the same time, the 2010 list of Chinese semiconductor companies with largest revenues has increased to 43 from 38
on the 2009 list reporting an average 41% increase in dollar revenues. Both Haier (Beijing) IC Design and Availink, which had emerged as two of China’s new leading semiconductor companies with greater than 550% revenue increases in 2009. By 2010, China had 106 SPA&T facilities, representing 20% of the total number of worldwide SPA&T facilities and floor place. The government’s specific encouragement and incentive measures including tax incentive, investment funding and subsidies for China-based semi- conductor firms not only drive a strong growth for domestic companies but also create barrier for multinationals to continue over take China’ market. Though Chinese players have not yet entered the top 10 rankings, however, this is likely to steadily change over time. Having said that, though the big companies like Nichia, Osram, Cree and Lumileds are foreseen to continue wielding considerable market power and influence to control nearly a third of the global market share in the short term, it is definitely not a dominating 50% market share by 2020. On top of this, the rapid change in the LED lighting industry and keen competition from local and regional companies are going to further change the role of multinationals and emerging local or regional companies. Currently, LED lighting...
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