In the previous post three reasons were mentioned to explain why Led technology is developing at an exponential rate. Focused on the automotive sector to absorb this exponential growth it is clear that the current situation of the Led-based lighting industry will go through structural changes in the next few years.
First of all, due to the growth in volume and to the learning curve of the customers of this sector. It is probable that this market’s products will become commodities. Of course, this will also depend on the strategies adopted by the “BIG 5” Led manufacturers. The scale factor in this type of market is not as important as in the case of semiconductors, as it has much lower fixed costs at a production level. On the other hand, there is also the issue of intellectual property that will condition this argument.
It is clear that there will be a sectorisation for Led manufacturers. High quality Leds will focus on applications related to the automotive sector and as they have more restrictive quality requirements they will have added value and a higher cost.
Last of all, there will be a reduction of the global players, as this automotive sector-related lighting market will become professionalised and will go from selling single Leds to selling highly efficient (thermally and optically) “smart lighting” modules which will provide added value for suppliers of automotive headlamps.
In short, there will be a structural change in the entire supply chain in this industry and the big question is what economic impact will this change have on the “BIG 5”. Depending on the strategy they follow they will see more or less benefits. Time will tell.
The Ikor group is actively participating in this evolution within the industry, as it is currently a supplier to globally referential automotive lighting manufacturers. On the one hand, this means that we are in constant contact with Led suppliers (the “BIG 5” mentioned above), as they are part of our supply chain.
On the other, we are convinced that, as they evolve towards “Smart Lighting”, our current role as customer-supplier with the actual manufacturers of lighting for the automotive sector will become more of a technology partner relationship. In addition to the current service for EMS, we will participate by supporting R&D services in the fields of knowledge that the Ikor Group specialises in and which are applicable to Smart Lighting.