The market for high-brightness light-emitting diodes (HB-LEDs) in lighting applications grew 64% in 2007 to $337m, up from $205m in 2006, according to Strategies Unlimited’s report ‘The Market for High-Brightness LEDs in Lighting: Application Analysis and Forecast—2008’.

HB-LEDs have demonstrated dramatic improvements in performance in recent years, as well as significant cost reduction, such that they are undergoing a period of rapid market growth in a variety of niche and general lighting applications, says the market research firm.

Most lighting applications continued to use colored (red, green and blue) LEDs in markets such as architectural lighting, channel letter signs, accent and decorative lighting, and entertainment lighting. However, white LEDs accounted for 48% of the market in 2007, and this percentage will grow as LEDs achieve greater penetration of the general illumination market, says Strategies Unlimited.

White LEDs have begun to capture a strong market position in selected applications such as consumer portable lighting (e.g. flashlights, headlamps) and machine vision. In addition, more recently white LEDs have begun to be used on a limited basis in applications such as retail display lighting, commercial and industrial lighting, and outdoor area lighting.

As LEDs grow beyond single-color and color-changing applications into general illumination applications such as residential, commercial, and off-grid applications, and ultimately into outdoor area applications, the LED lighting market should reach $1.65bn in 2012, it is forecast. By then, it will only be the beginning for the ultimate replacement of conventional light sources, including high-efficiency fluorescent and HID lamps, says Strategies Unlimited. However, many challenges face the LED industry to accomplish that goal.