LED is the future of lighting

You may have heard that LED lighting is a good thing. I would even say that it has the potential to create history and change the world.

Since Thomas Edison created the first light bulb, we have lived and worked under artificial light for more than 130 years. But despite the tremendous progress made in this “bright” society, we have paid a high price for the environment and economy for incandescent lamps, fluorescent lamps and other traditional lighting methods.

LEDs (Light Emitting Diodes) are solid-state semiconductor devices that can convert electricity into light. It consumes much less energy and has a much longer life than traditional lighting equipment.

Energy efficiency is increasingly important for controlling costs, increasing energy self-sufficiency, and reducing environmental impact. Therefore, LED lighting will become the world's leading artificial light source.

The most attractive point in the process of LED lighting to the mainstream is that it will use the existing infrastructure to achieve global growth. We don’t need to invest billions of dollars in new grids, wires, switches, and networks.

The latest research data shows that after a decade, nearly half of the commercial lighting business will be occupied by LED lighting.

Currently, 20% of the world's electricity is used for lighting; if LED lighting is used, this proportion will be reduced to 4%. By 2030, in the United States alone, LED's annual energy savings will be equivalent to 334 million barrels of oil.

Let's take a look at how LEDs will change the future of the lighting market. The following five facts can explain the problem:

1. LEDs now have a market valued at 100 billion U.S. dollars. LEDs have proven to be effective lighting solutions for a wide range of applications, including flashlights, flat screens, and headlights. Los Angeles has used LED for municipal lighting, and annual public lighting energy consumption will be reduced by 40%.

Since LED lighting is a semiconductor technology, it will become a platform that provides a variety of intelligent programs and improved functionality, and brings users a wealth of upgrade options.

In order to enter a market that is open to the outside world, the key is that the price should be appropriate. The price of LED lighting is falling drastically. At that time, the large manufacturers using traditional lighting technology will be left behind in the market.

Recall the dilemma faced by the wet film industry when digital photography occupies the dominant position - it has lost a huge market share. The current traditional lighting manufacturers are also facing the same predicament. Every penny invested in LED is stolen from their main business. Additional R&D spending will not result in an increase in income.

On the contrary, for the promising LED companies, every penny invested in LED will increase revenue accordingly.

2. The status, perception and operation of the lighting market will increasingly resemble the IT industry. Light bulbs represent the world's newest vacuum technology. Therefore, digital lighting is equivalent to the semiconductor, software and disk industries 40 years ago - it is on the verge of continued rapid growth.

The solid-state digital lighting platform will provide a large number of more powerful, easy-to-use applications, including, first, motion sensors, smoke detectors, dimming systems, and color adaptive systems. You can also use LED lighting to control your stereo system. You can even use the iPhone to remotely turn on and off the lights.

3. The traditional lighting industry has formed a long-accepted law, especially in terms of innovation. The period of innovation of traditional manufacturers is 16 months to two years - it is difficult for such a long time to bring the innovations they need and want to the current customers. Therefore, startups break the law and shorten the innovation cycle to three months. In the lifeless lighting industry, rapid market response is the essence of creating value.

4. The lighting industry must begin to see the world as a commercial entity and create a global supply chain. Research on LED in the United States will spread production around the world and it is possible to establish a light asset company, which does not need to invest a large amount of precious capital in fixed production costs, thereby having a significant positive impact on product costs.

5. LED will continue to lower prices until it forms a thriving global mass market.

Last year, the price of LED bulbs was between $75 and $100. With the help of vertical integration and asset-light production models, it is possible to increase the speed of product launches while significantly reducing costs. The LED lighting module can be purchased for only about $20, which is the price turning point of using LED lighting in the commercial environment, and the cost recovery time is about two years. If the price is $10, the time to recover the cost will be one year, at which time the demand for it from the residential market will explode.

The American writer James Thurber has said that there are two kinds of light: the dark light that illuminates everything and the light that covers everything. But for me there is only one light, it is LED.

Bill Watkins is CEO of LED manufacturer Bridgelux. Prior to joining Bridgelux, he served as CEO of hard disk manufacturer Seagate Technology.