Immense business potential brewing in Indian LED lighting market

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The tiny, bright lights that you may have seen all around hold immense business potential that has started to ripen in India. Although application light emitting diodes (LEDs) are still in the infant stage of development in India, they will soon be the next big thing in the lighting industry. Driven partly by the shift to energy efficient lighting solutions, LEDs are poised to replace conventional general lighting service (GLS) lamps and high intensity discharge (HID) lamps in many key applications like street lighting, indoor and outdoor lighting, apart from other industrial applications. Besides these conventional uses, LEDs have also found increasing adoption among automobile manufacturers in the country due to their small form factor and high lumen/watt ratio.

By Srabani Sen

Wednesday, August 25, 2010: LED lighting has been in use in India for a couple of years now, but its slow acceptance and adaptation is due to its high price. Moreover, the market is not yet completely aware of its benefits. Yet, industry analysts predict that in the next couple of years, LEDs will capture the Indian lighting market in a big way. This is mainly because LED lighting systems provide a much higher colour saturation and brilliance than conventional light sources. Different colour effects are possible from the same light source. LED light sources not only save energy but also reduce electricity bills.

According to a Frost & Sullivan report, in 2010, LED chip manufacturers are expected to invest more in increasing efficiencies from LED light sources, which will translate into lower lighting expenditure.

India, being a price sensitive market, will witness a significant increase in penetration as LED lamp prices go down the price ladder.

“LED lighting has vast potential in India due to power shortages and high electricity costs. LED for lighting is already a hot business area,” says Ajay Goel, CEO, Goldwyn. However, even the bigger players have still not tapped this market aggressively.

According to Shyam Mishra, senior manager, business development, Future Lighting Solutions, the lighting market in India in 2008-09 was estimated to be Rs 75 billion, out of which, the share of LED lighting was only 3 per cent. “The luminaire business is growing at 11 per cent, which includes replacement of conventional lighting with LED lighting; hence LED’s share is expected to increase to Rs 2.3 billion by 2012,” he adds.

Shares Vijay Kumar Gupta, managing director, Kwality Photonics, “As per recent reports, the demand for LED lighting in India was worth US$ 49.6 million in 2009, which is likely to go up to US$ 400 million by 2015, indicating a CAGR (compounded annual growth rate) of 37.3 per cent. This would be higher in the next five years as India is in the initial stages of the product’s lifecycle.”

Carol Chiu, global marketing head, GlacialTech Inc, believes that the percentage of changeovers from traditional lighting to LED lighting depends on improvements in LED chip technology and manufacturing costs. “But we have already seen this transition in progress, and we predict this will move quicker from this year onwards. From 2010, the replacement speed to LED lighting will be very fast, and the growth rate will continue for the next four years. We expect our growth rate to be 80 per cent in the next four years,” says Chiu.

What’s driving the LED business?

The fact that these bud like lights consume very little power, give out very little heat and have a long life, make them popular and compel manufacturers to explore various lighting applications.

According to Goel, demand for LED lighting is more in western India, but of late, southern and northern India is also picking up fast. Most of the demand for LED lighting comes from government departments and organisations, key industry sectors, as well as value chain partners such as building contractors, consultants and architects. This is because India is witnessing a boom in construction as well as investments in infrastructure. This is contributing to accelerating the growth of the lighting industry.

“The demand for LED lights is very high there. This is proved by the fact that despite the recession, demand for LED lights was quite good. We registered a 275 per cent growth in our LED lighting business even during the recession. In 2010-11, we expect 1000 per cent growth in our LED lighting business,” says Goel. “If we alone can grow by 275 per cent, then you can imagine how fast the market is picking up, as there are many others like us in the industry,” he adds.

Gupta agrees that the government sector is a major customer of LED lights, “But its decision making process is too slow. This is due to lack of standard preferred ratings and lumens making it difficult to be compared and arrive at an acceptable buying decision. Yet, the demand picture is promising. Presently, the industry is sustaining its R&D and production costs by living from project to project in commercial offices, small estate projects and small solar linked LED lighting projects. The LED fixture makers, which consist of over 1000 manufacturers, are eagerly waiting for the market to take off enough for them to amortise their earlier costs and raise investments to keep product upgrades in pace with the fast changing market.

While Chetan Thakkar, managing director, D S Electronics, stresses that demand for LED lights are rising mainly from corporate houses, hotels, commercial places, malls, etc, where electricity charges are much higher than residential areas, S Ravindranath, director, Silicon Components Pvt Ltd, feels that there is a growing demand for LED lights for emergency lighting, rural lighting (lanterns) and street lighting.

The Indian market scenario

Frost & Sullivan is confident that LED lighting will grow significantly in the future, but its penetration largely depends on how affordable LED lighting products become. At the moment, CFL rules the roost in providing cost efficient lighting. Industry estimates indicate that about 200 million CFL bulbs are sold in India every year. However, this figure is much below the 900 million tungsten bulbs that are sold today. “This scenario could change faster as more and more people realise the benefits of LED lights. Currently, in India, most players import LEDs from the US, China and Japan, and assemble them for specialised applications,” says Chiu.

According to the Frost & Sullivan report, lighting brands are expected to push for greater end-to-end manufacturing of LED lighting solutions. This will involve streamlining the manufacturing process by integrating LED based light with drive electronics, optics and thermal considerations. LED luminaire manufacturers currently purchase light sources, drive electronics and fixtures from multiple vendors, from their own in house divisions or import from other countries. As this adds to the costs, design complexity and risk for lighting manufacturers, luminaire manufacturers are exploring the options of designing and producing the fixture—procuring the ballast and light sources, which are then assembled inhouse.

Mishra feels that the Indian market scenario is no different from the global market except for the fact that it is taking shape at a little slower pace. “The western world has already taken the lead along with China because of the obvious reasons of strong manufacturing and development infrastructure. India, on the other hand, is lagging behind in manufacturing and hardware development infrastructure. With the push from the Bureau of Energy Efficiency (BEE) and Elcoma along with other premier government agencies, we hope India will soon start picking up on the manufacturing front as well,” says Mishra.

Says Ravindranath, “Indian products are designed keeping the Indian market in mind—technologically and commercially. The power supply in India is not as stable as in western countries, for which our power supply and driver designs are made more robust than the European or American counterparts. The fixtures are also more rugged due to harsh conditions. The products are not only of superior quality as compared to cheap Chinese imports but also commercially viable in the Indian market.”

Commenting on the Indian market scenario, Ravi AV, general manager, looking after SAARC countries, Nichia Chemical India Pvt Ltd, says, “The Indian market is quite price sensitive. We should first try to inculcate the habit of developing the right technical product. Once the technical product is ready, we can create the necessary demand. That demand will, for sure, enable the manufacturer to produce in mass volumes and, in turn, will help to bring down the price of the end product.”

Trends and innovations

Paul Thieken, director, marketing, LED components, Cree, stresses that over the past 40 months or so, the performance of high power LEDs has improved drastically. “The most exciting improvements are the greatly increased light output (flux), improved efficacy (lumens per watt), colour quality and stability. These improvements are exciting because they have enabled commercially viable LED lighting solutions to be now available to the consumer,” he adds.

Gupta feels that the falling LED prices will give fillip to use of higher wattage LEDs into the luminaires and would be willing to develop LED engines or modules for specific customers. “Currently available LED modules are either over or underrated for the quickly converging application lumen bands. Soon lumens will be the prime specification for the LED luminaires, unlike the wattages that are in vogue in other sources in CFLs, incandescents. This nomination of luminaires by lumens will allow markets to invite innvovation and efficiency, and avoid performance stagnation,” predicts Gupta of Kwality PolyWa Power LEDs.

Commenting on other associated developments, Marion Reichl, press officer, OSRAM Opto Semiconductors GmbH, says, “There are several improvements within the last few years that have given LED technology a real drive—ceramic packages for better thermal management; an increase in efficiency within a short timeframe because of better chip technologies; organic LEDs (OLEDs) as a light source of the future; long life, high brightness white LEDs with longer maintenance intervals and better total cost of ownership, etc. These improvements support the fast and extensive adoption of LEDs for different applications.”

According to Hari Chereddi, managing director, Sujana Energy Ltd, “The three most exciting improvements have been in the areas of applicability, availability and affordability of LEDs from the perspective of a common man. Applicability to our day-to-day lighting needs, availability in most shapes and sizes and, most significantly, becoming affordable to all, thereby providing limitless opportunities.”

The integrated design of LED lighting products is based on three core technologies, including electrical design (LED drivers), mechanical design (cooling devices), and optical design (lamp holders), respectively, performed by GlacialPower, GlacialTech and GlacialLight—three members in the GlacialTech family. Mastering the three core technologies, GlacialTech has integrated all the resources required for exceptional designs and manufactures world class outstanding LED lighting products.

Says Chiu, “To replace the traditional BR halogen lamps with excellent features such as higher luminous efficacy/efficiency, less power consumption, longer lifetime and less environmental pollution, GlacialTech launched the unique BR20 series AC LED bulbs, which use energy efficient 5 watt AC-LEDs as the light source, feed on an AC 110V/220V input voltage, and suit the standard B22/E26/E27/GU10 sockets. The bulbs are best applied to accent lighting, local lighting, and task lighting.”

Thakkar stresses that trends in LED lights are limitless as LEDs can be used in various applications irrespective of temperature and other factors. “Though the main strength of LEDs has been experienced in solar lighting applications, LEDs have been found functioning very efficiently at sub zero temperatures,” he says. “Innovation is a perennial process in LED lighting and our principle is to strive to bring about the highest lumens output. Our 1 watt LEDs give a minimum of 100 lumens o/p and 3 watt LEDs give 190 lumens o/p at a very reasonable and affordable price,” he adds.

Mishra points out that LED products now give superior light quality for indoor applications.

They are easier to build with energy star rated solutions like fine binned ANSI specified CCT and CRI combinations, with faster payback periods and lower total ownership costs.

“We see a growing trend in the use of LEDs for streetlights as well as commercial area lighting. This is one area where power saving is very crucial and use of LEDs will help in solving the energy crisis,” says Ravindranath. “Constant efforts are on to increase light output per watt, quality and also reduce the junction temperature of LEDs. Philips Lumileds has come out with LEDs with up to 100 lumens per watt,” he adds.

“The latest trends would be the ability to achieve uniform smooth light for indoor purpose where LED light source is not visible. This is achieved through using the latest diffuser technology with minimum light loss,” says G Gururaja, founder & director, Avni Energy Solutions Pvt Ltd. “Usually LEDs give 100 lumen at 350mA (milli ampere), but we are driving at 700mA to give 170 lumen and at 1mA to give 210lum. Now the latest LEDs are available with 100 lumen at 350mA and 200lum at 700mA, that is, almost 280 lumen at 1Amp. Dollar per lumen has reduced drastically. This will help us in reducing the number of LEDs in an outdoor fixture. In doing so, the entire system cost will reduce radically,” he adds.

What do key players offer?

There are less than 20 manufacturers of LED lights in India. But some major players have a strong presence in the Indian market. Kwality Photonics is one of India’s pioneer manufacturers of LED lighting, since the last 23 years. “We don’t produce fixtures, but offer high reliability professional grade power LEDs of 700ma capacity at a world beating price.We import chips from our vendor partner and produce LEDs through diebonding, wirebonding and encapsulation processes. Over 20 years of working closely with our chip vendors gives us access to fully probed, sorted and binned chips at little extra cost, allowing us to target closely binned output with high yield percentages. This, in turn, translates into lower prices for our customers as our cost of wastage is lower,” says Gupta.

Kwality Photonics is proud of its products, like PolyWa power LEDs, with what it claims are ‘the best’ thermal management and metal based chips, offering high thermal conductivity due to the absence of sapphire or underfilling, as in flipchip bonding on the silicon submount. “Our polyWa 6 watt and 13 watt LED modules are directly screwable to the fixture’s heatsink, eliminating expensive metal PCBs, SMD soldering, failures in the stressful reflow soldering process, and save over 20 per cent of the overall cost for the fixture makers. We also offer over 100 lumens per watt in any LED engine or LED module with a high CRI of 75. Our LEDs conform to the latest ANSI colour CCT classifications with less than a 7 Mcadam steps,” points out Gupta.

Goldwyn, which was established as an export entity in 1989, ventured into the LED lighting space in 2006. It not only exports LED lights to European countries but had started catering to the Indian market since the last two years. Goldwyn manufactures the complete range of LED lighting. It has its own lighting lab and state-of-the-art R&D facility. “We have products for both indoor and outdoor lighting applications. We are very strong in LED streetlights, wall washers for buildings, hoarding lights, and backlit and front lit displays. We also have garden lights, swimming pool lights, lighting solutions for offices, shopping malls, highways and household applications,” informs Goel.

Goldwyn imports packaged LEDs from European countries. “In India, nobody manufactures LED chips since none of the Indian companies have the right technology to develop thems. We are always innovating to make the products more efficient and at the same time reduce the cost,” he adds.

Future Lighting Solutions is also a leading provider of LED lighting components and support services for solid state lighting products and installations, including engineering expertise, concept development, full system solutions and online tools that accelerate quality application development. Philips Lumileds has partnered exclusively with Future Lighting Solutions to provide Luxeon LEDs. Future Lighting Solutions has also developed unique and powerful tools, such as usable light tools, lifetime reliability tools and QLED thermal software, which allow customers to easily select the appropriate LED and design an effective solution. It also offers Luxeon rebel white LEDs, colour LEDs, low cost power LEDs, flash LEDs, and LEDs for automotive head lamps and exterior signalling.

GlacialTech Inc is a diversified provider of cooling, power supply, and PC enclosure solutions for consumer and industrial applications. The company has established strong relationships with companies that are leaders in LED semiconductor thermal, SMPS and mechanism technology worldwide in order to leverage world class engineering, efficient manufacturing and the highest quality material to provide high brightness, and low power LED lighting solutions for indoor, outdoor and other customised applications under the GlacialLight brand. It offers LED lighting products for indoor and outdoor solutions such as MR16, spotlights, BR series lamps, T8 tubes and streetlights. “GlacialTech will soon launch the GlacialLight T8 low power LED tubes, which are extremely low in power consumption, using under 10W of power for the 60.96 cm tube, and under 20 watt of power for the 121.92 cm tube. Meanwhile, as per market demand, high bay, down light and DC input solutions and dimming functions are what we are working on currently,” says Chiu. “We need to keep our price very competitive as our core competence comes from thermal management /power control. We are known as an eco friendly total solutions provider in the LED lighting space,” she adds.

Nichia has a rich manufacturing experience of 54 years and is known for its invention of the blue LED in 1993 and white LED in 1996. The company offers super flux LEDs with 150 lumen/watt efficacy. They give out the same lumen output with 80 degrees and 150 degrees directivity within the same package. “Our NS3W183R is a new product with higher Vf of 10.5V DC. It goes well with solar applications, as the battery voltage is generally 12V,” says Ravi AV.

D S Electronics assembles street lights and down lights from 1 watt to 27 watts. It is a distributor for Taiwan and Hong Kong companies, dealing with LEDs for general applications and high power LEDs.

Silicon Components is into imports and distribution. It represents Philips Lumileds—a leading manufacturer of high power LEDs—as a regional distributor. It sells Rebel LEDs of various colours as well as other accessories for the manufacture of LED lights. It also provides complete solutions to companies who want to manufacture LED based fixtures and fittings. “Some of our latest products are LED drivers that support solar charging, streetlight application solutions, and general home/office fitting solutions. Philips Lumileds has also released the new series—Luxeon-C series—which promises brighter light in a smaller package enabling more efficient, cost effective, environmentally friendly lighting solutions,” informs Ravindranath.

Avni offers a wide range of LED lights for commercial and general applications. It is a pioneer in LED lighting solutions, with products ranging form 0.5 watt to 200 watt, which can replace zero candle incandescent bulbs as well as bulbs of 250 watt SVL/400 watt MH. Its outdoor products are optically designed. It provides lighting solutions according to customer requirements by analysing lighting needs using software called Relux. “Our USP is replacing 800 watt high mast light with 180 watts LEDs. Our products can achieve lux level with more than 80 per cent energy saving and can handle thermal power,” says Gururaja.

R&D spending

Worldwide, a lot of research work is happening in an effort to increase efficiency and reduce costs. However, India lags behind in R&D activities. Of late, Indian manufacturers have started spending on R&D and allocated an annual budget for it.

Says Goel, “Even a couple of years back, Indian manufacturers didn’t want to spend on R&D. They lacked the right knowledge about the technological upgradations happening worldwide. But now the scenario has changed and Indian manufacturers are also spending on R&D. In Goldwyn, we pay attention to the right tooling so that lighting intensity increases. We spend about 10 million annually on R&D.”

Kwality Photonics spends over 5 per cent of its annual turnover on R&D. “Without R&D there is no survival,” says Gupta.

Says Ravindranath, “We are investing in R&D mainly to design better products and develop energy saving LED drivers that also have additional functions such as solar charging capabilities.

Nichia plans to invest more than US$1 billion in R&D in 2010-2011.

Share of challenges

However, the Indian LED lighting sector has its own share of challenges. LED lighting installations require more complicated designs that span the optical, thermal and electronics domains. LED lamps continue to be quite expensive compared to conventional lamps thus hindering penetration in the price sensitive India markets. The need to simplify the use of LEDs when designing lighting products is another challenge being faced by the industry. LED firms are constantly working to lower the cost of LEDs through the use of larger wafers, increased manufacturing efficiencies and greater performance.

Commenting on the challenges faced by Indian manufacturers, Gupta remarks, “Indian makers are very quality conscious to develop products that comply with top performance parameters. They have to compete with the Chinese products which are low in pricing. However, the Chinese costs are now shooting up due to Chinese government’s recent push for minimum wages and compulsory payment of OT work. This will prove a silver lining for Indian companies investing in manufacturing.”

Says Mishra, “LED lighting is a new solid state lighting technology, which is not compatible with the existing lighting control systems. Hence, it is a challenge for even the top companies in the lighting segment to develop dedicated LED lighting systems to meet customer/market requirements. The key challenge for the ecosystem is, therefore, optical and thermal management. These are key issues because LED manufacturing and optical component manufacturing are not in sync to develop the optimum solutions for the device. In fact, the technology is changing so fast that once a system is ready for use, the LED becomes better technologically with different photometric characterstics. Hence, the developed system is not optimum. Thermal issues are key, as the heat has a very adverse effect on power LEDs. Hence systems need to be developed to control heat to optimise performance.”

Gururaja points out, “Primarily, as there is no specification for LED products in India, people come up with unrealistic specifications. For example, for a streetlight, they specify 60 watt and expect to use 60 LEDs, thus restricting the manufacturer to come out with innovative ideas. Typically, LED forward wattage is 3.3, so we drive the LED at 350mA. Classically, by using 20 LEDs we can achieve 60 watts. This shows that LED market in India is not trained enough.

Secondly, people still think about initial investment rather than the savings in energy bill, replacement cost and disposal of conventional lights.”

Chiu believes that the major challenge being faced by LED chip manufacturers is to make an effort to increase the luminous flux and the luminous efficacy, which is at the moment a major bottleneck. For LED product manufacturers, some of the main challenges are: how to enhance the driver efficiency (electrical design), improving the heatsinking capability (mechanical design) and the lamp holder (optical design).

Ravindranath sees the high initial cost of using LED fixtures as a challenge. “The material cost has to be reduced to make LED products more commercially viable. Another problem is the non-standardisation of LED products. Different companies claim different levels of performance for their lighting products due to lack of standardisation,” he points out.

Ravi AV, on the other hand, feels that restriction on the import of spurious LEDs from overseas and reducing the cost of the product, are the major challenges faced by the industry.

Of all the challenges being faced by the manufacturers, the high manufacturing cost of LEDs, and hence high cost of the products, seems to be the most crucial issue that needs a breakthrough. Says Goel, “Sixty per cent of the cost goes into the LED chip and LED packaging; that’s why Indian companies are trying to get into packaging as well. However, globally, the cost of LEDs is going down. Since 2006, the cost has come down by half—intensity has increased to more than 80 per cent and technology has progressed. So we are hopeful that in the next five years, LED prices will reduce drastically.”

Currently, the Indian LED industry is striving to lower energy consumption and reduce manufacturing costs. But in the near future, LED luminaries will become more superior aesthetically as well as technologically, with automatic controls, thermal management and lower costs. These will further promote wider applicability, mass availability, and greater affordability.

How can the cost of LED lighting products be reduced?
Although LED lights are still too costly to motivate the common man to use them, their power saving capability, long life and low maintenance requirements have resulted in companies and even individuals opting for LED based lighting systems. Today, the most efficient LEDs are about ten times more energy efficient than incandescent bulbs. Prices will inevitably fall as demand rises, and industry analysts can clearly see the future lies with LED lighting. Many companies have started using 10 cm and even 15 cm wafer substrates instead of the traditional 5 cm ones—the larger the substrate, the lower the cost of production. As the industry moves to larger wafer sizes, LED manufacturers can reduce their costs and expand their manufacturing capacity even further.Researchers and manufacturers are also figuring out other techniques to lower the production cost of LEDs and the price of LED based products. One such method was announced by Cambridge University last year. It claims to have found a way of making gallium nitride (GaN)—a semiconductor used for making LEDs. This will enable production of LEDs at one-tenth of current costs, by using 15 cm silicon wafers instead of 5 cm sapphire wafers.

Electronics Bazaar, South Asia’s No.1 Electronics B2B magazine

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