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EETE JUNE 2013

Silica gets on the passing lane in Europe’s LED market By Christoph Hammerschmidt In the booming market for LED lighting, electronics distributor Silica intends to lead the pack by offering technological excellence at application level. The company currently is in the planning stage of offering custom-made solutions based on customer specifications, said Martin Bielesch, General Manager Lighting and New Markets Silica EMG, in an interview. Currently Silica, a subsidiary of Avnet, has LED products from Sharp, Seoul Semiconductor and Philips Lumileds in its portfolio. The company does not define itself as a simple distributor but plans to provide bespoke solutions which include all optical elements, power supplies and similar add-on components. While the company only recently begun offering such solutions, some projects are already active at various customers, Bielesch said. The power supplies for these solutions are provided by the sister company Avnet Abacus from a handful of different manufacturers, “Our focus is general lighting”, Bielesch explained - everything customers need for indoor, office and home lighting as well as outdoor lighting. Automotive lighting is not the primary focus. Bielesch estimates the size of the total available lighting market to about € 70 billion worldwide; automotive lighting sums up to about 13 billion. Backlighting applications represent a significant share of the market, but in this segment the market saturation is already in sight - the penetration rate in this segment is currently about 60 percent as opposed to general lighting where Bielesch sees only about 10 percent penetration. “The ban of high wattage incandescent light bulb is generating a significant demand growth”, Bielesch observed. Of the € 70 billion market volume, LED account for just about € 10 billion in 2013. The LED lighting market is somewhat different to Avnet’s other markets in the electronics industry. “Many new customers in the general lighting space had no or very little contact with electronic components”, Bielesch explains. The reason: these customers have their roots in the lighting segment, and their daily bread business is implementing lighting solutions based on incandescent or fluorescent lamps. Now that LEDs are increasingly playing a significant role in this business and even start to displace the conventional technologies, these companies Martin Bielesch: “In Europe, environmental considerations are among the major drivers for LED demand” suddenly and urgently need LED and electronic component expertise. Another characteristic feature of this market is its high degree of fragmentation. “In this market you see many small and mid-size players, including architects, light designers, and electrical fitters”, Bielesch said. Is indoor or outdoor lighting more interesting? Both, said Bielesch. “Both sectors are booming. Even for AC LEDs, so far the exotics in the LED lighting market, we start to see demand.” Currently, retrofit solutions prevail because they offer very simple installation options. However, on the long run they might not be the winning technology, Bielesch predicted. “If you put all the power electronics needed to drive the LEDs into the socket, you create a lot of heat within a very limited space. This restricts the life expectancy of such solutions”, he said. However, within the three to four years ahead, the technology should have reached the degree of maturity required to resolve these shortcomings, preparing the ground for an acceptance breakthrough. “Against this background, we plan to prepare such customer-oriented and attractive solutions that we will be Europe-wide one of the top distributors”, Bielesch said. In order to reach this goal, he bets on organic growth in the first place, but he did not rule out that the company could expand its technology basis by acquisitions. Divided by geographies, the LED adaption rate currently is the highest in Japan - helped by the energy bottleneck caused by the nuclear plant failures in 2011. In Europe, environmental considerations are among the major drivers for LED demand. Within the EU, Germany is a very large market, but the engine fires on all cylinders: “All geographies are booming, including Eastern Europe and Turkey”, he said. In street lighting, the situation is somewhat different than in other market segments: in publicly funded projects, the financial condition of the public authorities is an important factor. While currently some Southern European countries are cutting their spending, Turkey is unaffected by the current crisis, Bielesch described the situation in the South of Europe. While the LED market runs hot, OLEDs (Organic LEDs) are not (yet) relevant for the demand. “Without any doubt, OLED is an interesting technology. However, it is yet unclear where they can compete against solid-state LEDs”, Bielesch commented on the current OLED performance level. In terms of product segmentation, the mid-range currently seems the sweet spot for Silica. “This market has been underestimated by some manufacturers”, he explained. “These LEDs are suited to implement very cost-effective solutions without the need to place highbrightness LEDs everywhere.” Nevertheless, in the long term, high-brightness LEDs will prevail. “The price erosion will make them very popular”, Bielesch said. 6 Electronic Engineering Times Europe June 2013 www.electronics-eetimes.com


EETE JUNE 2013
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