The LED light engine market, in terms of value, is expected to be valued at USD 30.0 billion in 2019 and is further anticipated to reach USD 59.5 billion by 2024, growing at a CAGR of 14.7% during the forecast period. The lighting industry has entered a dynamic period of growth and potential. Lighting technologies have been used to supplement and complement natural light in various applications. LED lighting is an emerging technology, which is more energy efficient than other technologies, more environmentally friendly, has longer operational life, and gives better light output. This technology is expected to be the future of global lighting. The LED light engine market is driven by the increasing consumer demand for energy-efficient lighting systems and high penetration of LED lights in the general lighting market.
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The introduction of wireless technologies has boosted the market for retrofit lighting systems, thereby leading to the growth of the LED light engine market. The wireless technologies have not only reduced the usage of wires but also helped to avoid reconstruction of the existing buildings and fixtures, thereby creating flexibility for the end users. With most of the expansions and infrastructural modernization programs initiated in emerging Asian countries, LED lighting manufacturers are focusing on Asia as it is expected to provide potential market. Countries, such as India and China are emerging markets for LED lighting as there is more scope of expansion in these countries than the matured countries, namely, the US, Germany, and the UK. Additionally, government initiatives are also playing a key role in driving the LED light engine market in these economies. For instance, governments of various countries have initiated several plans, such as the development of smart cities and intelligent traffic lighting system, which are expected to boost the LED light engine market in the region. It is therefore analyzed that the growing market for residential end users and the economy modernization initiatives in the Asian region are the key revenue pockets for LED light engine companies.
The LED light engine market for luminaires is expected to grow at the highest CAGR during the forecast period. It occupies a larger share of the LED light engine market owing to the rapid rise of LED lighting technology over conventional technology.
The market for retrofit installations is expected to experience the highest growth during the forecast period. Increasing replacement of incandescent lamps with energy-efficient light sources, such as LED lamps is the major factor contributing to the growth of the market for retrofit installations. The old generation lamps are being slowly phased out and the fixtures are being retrofitted with LED lamps as they offer a longer operational life and consume less energy.
The LED light engine market for indoor lighting application is expected to grow at the highest CAGR from 2019 to 2024. The development of modern smart homes across the globe is creating opportunities for LED light engine manufacturers in the market. It was found that energy management is the key factor that is driving the market for LED light engines in residential applications. The US Department of Energy (DOE) and the European Union have initiated awareness campaigns to ensure energy saving in their respective countries to increase the adoption of LED lighting technologies, which in turn is fueling the demand for LED light engines.
The market in APAC is expected to dominate the market, in terms of value, during the forecast period. The reason for APAC to be the dominant market can be attributed to the rapid infrastructure-building activities being undertaken in the APAC region—mainly China—where LED lighting paves the way for the modernization of infrastructure. This region has become a global focal point for investments and business expansion opportunities.