This post was written by Keith Dawson for UBM Tech’s community Web site All LED Lighting, sponsored by Philips Lumileds. It is archived here for informational purposes only because the All LED Lighting site may go dark at any time. This material is Copyright 2013-2015 by UBM Americas.


One Word: Optics

A new research report predicts that secondary optics, followed by drivers, will be the largest component opportunity in the LED luminaire market over the next 10 years.

The Lux Research "state of the market" report, titled "Casting the Light: Illuminating the Opportunities in 2023's LED Luminaire Market," looks at the market for LED luminaires 10 years out. The overall conclusion is that the market will grow more than 12-fold, to $25 billion, by 2023. According to Lux lead analyst Christopher Hwang, optics will claim the largest piece of that pie, accounting for $6.9 billion, followed by drivers at $4.9 billion. LED packages will shift out of the position of being cost drivers for luminaires as their prices continue to erode.

An earlier Lux Research report had projected packaged LED costs falling 70% over 10 years, according to In this update, Lux's analysts are projecting an 80% drop over a decade. This and other efficiencies in yield management and facility utilization rates will bring the BOM cost of a typical 3,500-lumen, recessed modular luminaire down by around 35%, from $85 today to $55 in 2023, according to the researchers.

High-CRI LEDs will be a sizeable business in a decade, but still a niche in the overall luminaire market, confined to "high-occupancy" applications. The market for these specialty LEDs, the sort supplied by Soraa and Xicato today, should be about 9% of the total, or $2.25 billion, in 2023, according to's writeup on the Lux research.

An older man talks to a recent graduate at a party. He leans over and says, conspiratorially, "Optics."

With apologies to Mike Nichols and Dustin Hoffman, that scene might play out at parties everywhere as the conclusions of the Lux Research report settle in.

— Keith Dawson Circle me on Google+ Follow me on Twitter Visit my LinkedIn page, Editor-in-Chief, All LED Lighting