UV LED market: too many players for decent margins?

October 13, 2016 // By Julien Happich
In its latest market report on UV LEDs, Yole Développement has identified more than 65 companies involved in the UV LED industry for disinfection/purification applications in 2016, almost double than four years ago.

The fast adoption of UV LEDs for curing applications drove the number of UV LED companies up 6-fold since 2008, a growth emphasized by the strong price-pressure environment seen in the visible LED industry since 2012. The growth in unit will even be higher in the next years, fuelled by price decrease, expects Yole.

“The recent UV LED price decreases are forcing manufacturers to review their strategy”, comments Pierric Boulay, Market & Technology Analyst at Yole. “The visible LED industry is suffering from strong price pressure. As a consequence, LED manufacturers are looking at new opportunities to increase their revenues and margins”, he adds.

In this context, the UV LED market has been perceived as a potential ‘blue ocean’ of attractive opportunity for these players.
Since the 2012 boom of UV curing applications, more than 55 LED companies have entered the UVA LED industry. Today the UVA LED industry is well structured, with a large number of suppliers, and the price and performance of devices in greater agreement with application level requirements. A good symbol of this maturation is the involvement of six of 2015’s top-10 visible LED players: Nichia, Lumileds, Seoul Semiconductor/Seoul Viosys, Everlight, LG Innotek and Lumens.

"So what’s next? Will the UVA LED industry follow the same trend as the visible LED industry, a blue ocean that turns into a bloodbath?" wonders the analyst.

Most of the new entrants are coming from Taiwan and China. The emergence of these players already had an impact on the industry, forcing all manufacturers to dramatically reduce their prices and margins in 2015.