Thwarting LED cost erosion, high-value automotive sector is driving revenue growth
With the integration of light emitting diode (LED) technology, lighting has evolved from a basic, functional feature to a distinctive feature with high-value potential in automotive. Indeed, LED technology has given manufacturers the opportunity for strong differentiation via lighting design and additional functionalities. This is particularly true for exterior lighting. The integration of new solid state lighting (SSL) technologies is transforming automotive front lighting and rear combination lighting (RCL) systems and their applications, offering more design flexibility, increased efficacy, and intelligent functionalities.
LEDs are rapidly gaining popularity as their cost decreases and efficiency, luminance and package size improves. For example, full LED headlamps that first saw commercialization in 2008 on luxury cars like the V10 Audi R8 have since penetrated the compact, or C-segment, vehicle market in 2012, with the new Seat Leon, and are now being commercialized in emerging markets. Nowadays, nearly all car maker and Tier-1 part suppliers have developed full LED-based headlamp systems and such technology is a must-have in the C and also the D – compact executive car – automotive segments.
Laser and organic LED (OLED) sources are still emerging technologies but could also support the development of new functionalities. Laser-based headlamps could enable long-distance night vision, up to 600 meters, or be coupled with digital micromirror devices (DMDs) to provide high resolution lighting systems, up to 1M pixels. OLED RCLs could initiate a design shift from 2D to 3D light sources, made possible by the nature of the OLED device itself.
In this context, the automotive lighting market totalled $27.4B in 2017 and is expected to reach $37.3B in 2023 at a compound annual growth rate for 2017-2023 (CAGR2017-2023) of 5.3%. This growth is driven by natural LED cost erosion coupled with standardization and optimization of LED modules, which result in more vehicles equipped with this technology. Indeed, whereas SSL technologies represented 57% of automotive lighting value in 2017, this share is likely to reach 85% by 2023.
The integration of new semiconductor/electronic-based components is also enabling the realization of full electronic systems, combining solid state lighting, sensors and software, and by extension the development of advanced lighting functionalities.
The main objective of these functionalities is to offer beam patterns that automatically adjust to the driving environment. Recently, the use of matrix LED systems combined with camera and image processing functions has allowed for creation of new lighting functions like adaptive front lighting and glare-free lighting. And such evolution toward photonic and full electronic systems is opening a new era/revolution for automotive lighting: the implementation of digital light to further enhance the value of lighting.
Overall, digital lighting enables high resolution front lighting systems, offering new low and high beam functions, to increase road safety and driver comfort, and can make automotive lighting more intelligent. Additionally, this trend of digitalization is supported by the development of advanced driver assistance systems (ADAS), as lighting could serve as a communication tool within the environment of the car, for example for car-to-pedestrian communication.
Today, digital lighting is a key area of investigation for the automotive lighting supply chain as it represents the future of automotive lighting. And several new technologies/systems are being investigated, including DMD/digital light projection (DLP), laser scanners, liquid crystal displays (LCDs), and micro-/mini-LED. An interesting fact is that such lighting systems are providing ever more synergy with projection/display systems as their function is evolving toward communication, like projecting information onto the road. And new parameters now have to be taken into account for related developments, such as resolution, field of view (FOV) and pixel density.
However several barriers have still to be overcome in areas including technology, manufacturing, and regulation. Those challenges will be reinforced as digital light further tightens the relationship between lighting, automotive sensors and data processing.
Yole’s report presents a complete overview of new lighting technologies and advanced front lighting systems (AFLS), providing details regarding benefits and drawbacks, integration status, and development roadmaps. The report gives insights into the future of automotive lighting with analysis on synergies with ADAS.
Automotive lighting: a mutating industry
According to Yole’s analysts, automotive lighting is becoming one potential critical node for autonomous driving because lighting systems could represent a key location for the integration of sensors such as local cameras, radio and light detection and ranging (radar and LiDAR).
Traditional automotive component suppliers are now expanding their business in this field. A good example of this trend is the recent acquisition of Magnetti Marelli by CK Holdings, a holding company of Calsonic Kansei Corporation, a leading Japanese automotive component supplier, for 6.2B€.
Electronic companies seem also to be eyeing automotive lighting. Indeed, with the increased implementation of electronic components in vehicles, automotive electronics should surpass the consumer electronic business in the middle/long term. LG has made the first move in this direction with the acquisition of ZKW for more than 1.1B€.
Several new players are likely to enter this market in the future, and some current leading automotive lighting tier-1s are therefore trying to reinforce their position. Valeo has taken over Ichikoh, Varroc has kicked off an Initial Public Offering (IPO) process to raise capital, and Magna has acquired Olsa.
But such moves are not restricted only to car maker and Tier-1s. Some Tier-2 and Tier-3 players also want bigger pieces of the pie. In this field, Osram has recently developed a joint venture with Continental to supply lighting modules and Electronic Control Units (ECUs), which will become the heart of lighting system development in the future.
This industrial evolution is likely to continue as solid state lighting technologies are integrated. The rapid evolution of these technologies coupled with the AFLS trend and increased use of non-visible lighting systems such as LiDAR, autonomous emergency braking (AEB) or driver monitoring systems might reshuffle the cards in an industry that’s mutating.
Yole Développement – www.yole.fr
