The CSP LED market is estimated to be USD 757.7 million in 2018 and is likely to reach USD 1,744.8 million by 2023, at a CAGR of 18.2% during 2018–2023. The low-cost potential of CSP LEDs with a low bill of materials, which is because of the manufacturing process—where several packaging steps are omitted—is a major factor driving the growth of the CSP LED market. High competition in the packaged LED market has led to the development and launch of new and innovative CSP LEDs with improved designs and high-end specifications.
General lighting and automotive segments to define the growth of CSP LED market in next 5 years
General lighting and automotive segments will play a crucial role in the growth of the CSP LED market during the forecast period. CSP LEDs offer tremendous growth opportunities to manufacturers with high demand from these two segments during the forecast period. The market for automotive is expected to grow at the highest CAGR during the forecast period. Majority of CSP LED demand in automotive is from replaceable headlights which are being supplied by local/regional vendors by utilizing CSP LEDs manufacturer like Seoul Semiconductor. Though, the market size for CSP LEDs in automotive segment is very small, it is expected that demand for mid- and high-power CSP LEDs will increase exponentially 2018 onwards when automotive manufacturers and automotive lighting suppliers start adopting CSP LEDs in new installations.
Technical advancements and emerging/untapped applications to play the role of major growth factors for CSP LED manufacturers
The development of CSP LEDs with GaN-on-Si will boost the confidence of CSP LED manufacturers to further decrease the cost of CSP LEDs for different applications and offer strong competition to traditional LED packages. Samsung is developing CSP LEDs based on GaN-on-Si to further decrease manufacturing cost. The automotive and general lighting segments to account for exponential growth in demand for CSP LEDs in the next 5 years. Growth in direct-view LED and development of micro-/mini-LED displays to offer significant growth opportunities in the CSP LED market. Other applications such as signs and signals, sensing devices, and keyboards are untapped opportunities for several players operating in the CSP LED market.
High-power CSP LEDs to be the main focus of CSP LED suppliers during the forecast period
High-power CSP LEDs are expected to be the main focus of CSP LED suppliers during the forecast period. With the exponential growth in demand for CSP LEDs in automotive and general lighting during the forecast period, high-power CSP LEDs will find use in several applications such as automotive headlight, high bay lighting, street lighting, and architectural lighting.
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Companies to witness highest growth in Europe during the forecast period, mainly from general lighting and automotive segments
The market in Europe is likely to exhibit the highest growth owing to high demand for CSP LEDs expected in automotive and general lighting applications during the forecast period. Presence of large number of automotive manufacturers, leading CSP LED suppliers, and major general lighting customers in the region will drive the growth of the CSP LED market in Europe, and automotive segment is likely to lead the market in the region by 2023.