Friday, October 17, 2008

Sharp Turns On LED Lighting Market

Sharp Turns On LED Lighting Market
The Japanese electronics giant plans to sell 11 LED lighting models for factories and offices.
by: Ucilia Wang

To help fill the growing demand for energy-efficient lights, Sharp Corp. said Monday it plans to enter the LED lighting market this fall.

The Japanese company is scheduled to introduce 11 models of fixtures using light-emitting diodes, also known as LEDs, to light up factories and other commercial spaces starting Sept. 1. Sharp is targeting the Japanese market first, noting that industrial and office buildings in the country use roughly twice as much electricity as residential buildings.

Even though LED technology has been around for decades, it’s more commonly used for those green or red indicator lights for consumer electronics, traffic lights and camping headlamps.

The market for light fixtures made from LEDs – which manufacturers claim shine more brightly, use energy more efficiently and last longer than conventional light bulbs – has been growing. Although those lights cost more, an increasing number of factory and commercial building managers are choosing LEDs for long-term savings as electricity prices increase.

The commercial market for LED lighting is going to take off in two years because: one, it offers a lower energy cost; and two, it offers lower maintenance cost,” said Michael Kanellos, a senior analyst with Greentech Media.

LED light fixtures generated about $295 million in revenues last year and are expected to reach $407 million in revenues in 2008, according to market-research firm Databeans. In comparison, the conventional light-fixture market, which includes traditional and more energy-efficient incandescent and florescent lights, accounted for about $107.3 billion last year and is expected to reach $114 billion this year.

Entering the LED lighting market isn’t a stretch for Sharp, which has been making LED indicator lights for its consumer electronics and appliances for decades.

In fact, Japanese companies control about 70 percent of the world’s optoelectronics market, which includes image sensors, LED lamps and other devices that can emit, transfer or receive lights, according to Databeans.

Sharp said it is trotting out five rectangular and square LED fixtures that offer the same brightness as conventional florescent fixtures that contain two 40-watt tube-shaped florescent lamps. Sharp is also introducing six round fixtures with different shades of white light. The light shines as bright as an incandescent lamp of 100 watts or 150 watts, Sharp said.

The promise of a much larger LED lighting market has attracted venture capital investments. Billerica, Mass.-based Luminus Devices said in March it had raised $72 million in venture capital (see Luminus Closes $72M to Light Up New Applications). Another startup, Nuventix in Austin, Texas, earlier this month raised $14 million to market its devices to cool LEDs (see Wakonda, Nuventix Raises Millions).

The LED lighting market has seen more acquisitions lately. Lighting Science Group in Dallas bought Lamina Lighting in Westampton, N.J. last month for $4.5 million (see Lighting Science Buys Lamina for $4.5M). Cree in Durham, N.C. bought LED Lighting Fixtures in Morrisville, N.C. for about $77 million in February (see Cree to Buy Firm Founded by Its Former Execs).

The automotive industry has been embracing LED technology more quickly, said Susie Inouye, director of research at Databeans. With the growing popularity of hybrid electric cars, automakers are looking for more energy-efficient lamps for headlights and interior lighting.

Analysts have said the technology remains too expensive for most consumers. That hasn’t stopped some companies from testing the consumer market, however. Philips Lighting, a unit of the Royal Philips Electronics in the Netherlands, plans to start selling LED lighting products, including table lamps and LED modules.

Cost is just one of the many obstacles keeping LEDs from the mainstream consumer market. The harsh light emitted from LED also is a major problem, Inouye said.

“LED gives a ghostly grey blue color. It’s not a warm light,” she said. “It’s a good solution for a factory, but not for home or retail space.”