Yole on the UV LED industry: Over 10 Years, Market Share has Trebled

Yole Développement, part of Yole Group of Companies, has been following the UV LED industry for 10 years. In this decade, Yole’s analysts identified and analyzed breakthroughs totally changing the UV LED landscape. This has allowed the technology to take more market share from other UV illumination technology. From representing 8% of the market in 2008, UV LEDs are expected to reach 25% in 2018.
 
Yole’s UV LED technology and market report, “The UV LEDs – Technology, Manufacturing and Application Trends” analysis presents a comprehensive review of all UV applications from curing to disinfection. It reveals a detailed overview of the UV LED industry. Key challenges in system manufacturing, with a focus on UV curing and water disinfection applications, are also covered.
 
In 2008, UV LED was still considered an emerging technology and industry, trying to make its way into promising applications such as UV curing and counterfeit detection. Then, the LED industry only had eyes for the booming display applications, and was preparing for the rise of general lighting, considered to be the killer application for visible LEDs.
 
But the reality was quite different. Asian players have entered and created overcapacity and strong price pressure, which has transformed what could have been a “blue ocean” market into a bloodbath. That had a direct impact on the UV LED industry, which has at the same time seen many market entrants.
 
“From around 10 players in 2008, there are now over 65 players in 2018,” said Pierrick Boulay, technology and market analyst at Yole. “Since 2010, several visible LED players have turned to UV LEDs, seeking new growth drivers and higher profit margins.”
 
Within the UV LED industry, UVA LED market segment was the first to witness this industrial evolution, experiencing strong price reductions that have further accelerated the technology’s penetration. But rapidly the dream has turned into a nightmare. Indeed, after several years of double-digit growth, UV curing application revenues, which represent more than 80% of the UV LED market, have started to decline due to commoditization and a highly competitive environment. In the short-to-mid term, only players that can innovate will be able to maintain a profitable business in this area, according to Yole.
 
In parallel, UVB/UVC LED market has been less negatively impacted by the flood of new entrants. With UVB/UVC LED technology being much more difficult to access than UVA LED, barriers to entry are much higher. Additionally, UVB/UVC LEDs still suffer from low performance, so entry of new players has helped boost device development.
 
In the short term, the UV LED industry will experience a slow-down phase as the UV curing market starts to plateau and the UV disinfection market’s boom will be delayed.
 
“In this context, we expect the UV LED market to reach US$320 million in 2020, from US$160 million in 2017,” observed Pars Mukish, business unit manager at Yole. “Then, the market will be driven by UVC applications, showing a strong increase to US$1 billion in 2023.”