The US Department of Energy (DOE) has released a report on a supply-chain research project intended to identify the effects of the packaged LED and solid-state lighting (SSL) supply chains on the United States. The research studied the aggregate LED die and packaged LED market, and further separately studied LED-based lamps and integral luminaires. The markets are quite different, but one constant is that the US is primarily a consumer of LEDs and SSL products, yet potential opportunities lurk.
The research titled “2020 LED Manufacturing Supply Chain” is something quite different for the DOE. The organization has mostly focused on energy savings with relation to LED-based lighting and also advancements that can accelerate savings through both technological improvement and more rapid uptake. The new report set out to see how the US is succeeding in the actual supply chains separate from how the region has benefited from energy savings.
The report stipulates that the SSL revolution is an unstoppable success. Authors cited the biennial reports the DOE has released on the impact of LED sources relative to energy usage in general lighting. Back in 2016, the agency projected a 75% reduction in energy use by 2035, and the latest data shows an 84% conversion to SSL by that date. But the supply chain feeding that success is mainly based in Asia. US-based operations create a lot of the intellectual property (IP), but most of the manufacturing is elsewhere.
So the DOE sought to address the five following questions:
“1. How is the manufacturing process structured for typical solid-state lighting (SSL) general illumination products?
2. What is the value added for a typical LED luminaire manufactured in the United States versus internationally?
3. What proportion of LED products are manufactured and assembled in the United States and internationally?
4. What is the impact of an economic event (e.g., tariffs) on the SSL manufacturing process and to the final consumer?
5. What are the domestic opportunities for SSL manufacturing in the global lighting supply chain?”
The DOE commissioned Guidehouse to handle the research along with notable consultants including Monica Hansen and Morgan Pattison. Brian Walker, the DOE Lighting R&D program manager, oversaw the project. The process involved interviews with companies up and down the supply chain along with a collection of market data from a variety of sources.
The results are neatly summarized in three graphics that show the flow of products and therefore market value from source country to destination country. The LED component graph pictured nearby is by far the most granular. The US does supply some significant numbers of LED products, but Malaysia dominates with China and Japan not far behind.
In replacement lamps, the graph is much simpler. China is responsible for 94% of lamp imports in 2019. China dominates in luminaires as well but not so convincingly. Should the DOE revisit this research, it will be interesting to have another look. China surely suffered from its tariffs program and COVID-19 has likely impacted China’s dominance in the lighting sector.
Still, the good news in the report for the US is that many specialty applications may not be well served by China — applications such as lighting for health and wellbeing and germicidal ultraviolet in the UV-C band. Domestic US manufacturers could have an advantageous opportunity in making products for such usage. Moreover, US manufacturers may find success in fast-turn, semi-custom manufacturing, in luxury-market products, and in development where additive manufacturing is used.
Readers can peruse the full details of the research on the DOE website. Also, remember that even luminaires not manufactured in the US are still touched by many US workers throughout the supply chain. Moreover, the US benefits from energy are tremendous.
LEDs Magazine chief editor MAURY WRIGHT is an electronics engineer turned technology journalist, who has focused specifically on the LED & Lighting industry for the past decade.
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