Insight

Lighting industry update Q1 2021

Read more about Lighting M&A trends during Q1 2021

Shez Bandukwala

Shez Bandukwala

Managing Director, KPMG Corporate Finance LLC

+1 312-665-1067

Global LED Lighting Industry Snapshot

Supply chain challenges as a result of COVID-19 lockdowns and restrictions have temporarily had an adverse impact on the production and demand for lighting products. Favorable government regulations and increased public environmental awareness will drive future LED market growth

Global LED Lighting Market: Total Revenue Forecast (2016 – 2026)


Historical

  • Cost reductions, design aesthetics and enhanced functionality of LED technology and related controls have triggered a tipping point for LED adoption in the lighting industry over the last four years (from 9% adoption to ~35% adoption from 2016 to 2020E)1
  • Aligned with global manufacturing, the lighting market declined significantly in Q1 2020 as a result of global lockdowns halting factory production. Additionally, global lockdowns have negatively impacted key end markets including, but not limited to, automotive, residential and commercial applications

Forecast

  • The forecast demand for LED lighting products is expected to reach previously sustainable growth rates starting in 2023, fueled by increased demand for energy-efficient lighting
  • Inefficient lighting technologies are actively being phased out in old facilities through remodeling and retrofit activities. For new developments, recent international regulations have shifted to focus on sustainable, energy-efficient projects
  • In addition, favorable tailwinds include the decline in LED product costs, changing global energy policies, and incentive/rebate programs by government entities. In North America, projected revenue growth is largely driven by HCL (human centric lighting) and smart lighting applications

In our Q1 2021 edition of the Lighting industry update, we offer insights into industry dynamics and trends, M&A activity, and updated valuation metrics. To read the full report, download the PDF below.


 

Footnotes

Source: Frost & Sullivan Global LED 2020 Report. Notes: 1 U.S. Department of Energy.


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