Challenges and opportunities in the LED lighting market at this stage

📊 General Overview of the LED Lighting Industry

Global LED lighting market in 2025 presents a complex situation: on the one hand, the traditional general lighting market is under pressure; on the other hand, smart lighting, high value-added segments show strong vitality.

1. Market size and growth: According to TrendForce, the global LED lighting market will be approximately US$56.058 billion in 2024. In the first half of 2025, the overall market demand did not meet the expected recovery, and the growth rate of both the new installation market and the stock replacement market slowed down. The global LED lighting market size is expected to decline by 4.4% to US$53.573 billion for the whole year of 2025. This is mainly affected by global economic uncertainty, geopolitics and other factors.
2. Increased market structure differentiation (“fire and ice”): significant differentiation within the industry.
   • General lighting market: fierce competition, into the ” volume and price ” of the dilemma. A number of enterprises revenue decline, profit margins are squeezed.
   • High value-added market segments: intelligent lighting, human health lighting, plant lighting and other areas of order performance is bright, becoming the key to revenue growth and solid market share of some manufacturers. For example, the global LED intelligent lighting market size is expected to reach $11.573 billion in 2025, an annual increase of 19.2%; LED plant lighting market size is expected to reach $1.366 billion, an annual increase of 3.9%.

🔍 Analysis of key market segments

1. Smart Lighting:
   • This is currently the strongest growth engine in the LED lighting industry. Its growth is mainly driven by energy saving and emission reduction policies, user demand for dynamic dimming and color mixing and healthy lighting.
   • The smart home lighting market rebounded strongly in the first half of 2025, driving the demand for products such as smart bulbs, ceiling lights, and light strips.
   • Smart city and Industrial Internet of Things (IIoT) developments are also expected to drive the growth potential of IoT outdoor lighting.
2. Plant lighting:
   • The recovery of this market has been driven by European energy efficiency regulations and the introduction of high luminous efficacy (PPF/W) products. Strong growth in Europe hedged against pressure from regions such as North America.
   • Technology trends towards dynamic and controllable intelligent LED plant growth lights, equipped with 3-4 channels of adjustable spectral products are gradually becoming the mainstream, and the depth of integration with intelligent control systems.
3. Outdoor and industrial lighting:
   • Driven by high energy costs and policies, shipments of LED streetlights, floodlights (Floodlight), and patio lights are expected to maintain steady growth.
   • The boom in artificial intelligence (AI) digital infrastructure is also helping to stabilize demand for related lighting products such as LED Light Strip.

🏢 Key vendor performance and competitive strategy

Global Top 5 Lighting Manufacturers Ranking Stable in 2024, Industry Pattern Stable.

1. Strategic realignment of international giants:
   • An international leader reported total sales of €1,418 million in the second quarter of 2025, down 4.4% year-on-year. However, its installed base of connected luminaires increased to 156 million, its smart and specialty lighting business accounted for more than one-third of total sales, and its share of “recycled revenue” was 37%, exceeding its 2025 target.
   • Another international headliner, FY2025 Q1 sales rose 1.8% to $951.6 million, with a gross margin of 47.2%. Its strategy goes beyond connected lighting, aiming to build a ” smart space group ” through acquisitions such as QSC, which offers a full-stack AV and data platform.
2. Chinese Manufacturers Under Pressure and Transformation:
   • Traditional lighting companies face greater pressure in the general lighting market.
   • Transformation and Breakout: Many companies seek breakthroughs through acquisitions and expansion into emerging tracks.
3. Upstream chip enterprises “core” bright:
   • In contrast to the downstream, some of the upstream chip companies in the first half of 2025 performed brightly, with year-on-year revenue growth rates exceeding double digits. This reflects the importance of technological advantage.

📈 Technology, cost and price trends

• Deepening technology integration: LED lighting is deeply integrated with Internet of Things (IoT), Artificial Intelligence (AI), sensors and other technologies, upgrading from “lighting tool” to ” space experience service “. Adjustable white light, human-centered lighting (HCL) and other high-end market applications have become standard.
• Lighting packaging LED prices under pressure: in the first half of 2025, the average price of LED packaging market fell international brand manufacturers to adjust the product structure and pricing strategy, optimize the cost, accelerate the introduction of cost-effective solutions to capture market share . Lighting LED output value is expected to decrease by 7.6% annually to $3.325 billion in 2025 .
• 🌟 Trends and future perspectives
• Short-term outlook (H2 2025): Changes in the international situation have led to rising wait-and-see sentiment and uncertainty in the outlook . End customers adopt cautious inventory management strategies . However, high value-added products such as high luminous efficacy, healthy, intelligent, and circular lighting will remain a growth highlight .
• Medium- to long-term trends:
  • Increasing market concentration: Industry consolidation is accelerating, and the pattern of ” the strongest is always stronger ” is expected to continue . Large players strengthen their one-stop solution capability and regional market share through acquisitions and brand integration .
  • Driven by value innovation: The industry is shifting from purely pursuing scale expansion to a new competitive dimension centered on technology density and scenario value. Corporate strategy will focus on environmentally friendly products and digital lighting solutions.
  • Expansion of emerging applications: In addition to intelligent lighting and plant lighting, marine lighting, medical lighting, cultural and tourism lighting and other segments with relatively high barriers are also the focus of future competition and penetration of enterprises .
• 💎 Conclusions and recommendations
• From a comprehensive point of view, the LED lighting industry’s ” golden track ” undoubtedly belongs to those who can continue to technological innovation, ploughing into high value-added market segments, and can provide intelligent, digital integrated solutions to the enterprise.
• For industry participants:
• For enterprises: need to increase investment in research and development, get rid of low-end price competition, to intelligent, healthy, professional lighting and other high-end areas of transition, and pay attention to the opportunities and risks of overseas markets.
• For investors: can focus on intelligent lighting, automotive lighting and other high-growth market segments with core technology, as well as profitability continues to improve the industry chain upstream leader.