LEDs & Lighting
Media Group:

Strategically Blogging

Lighting as a Service

04/15/2014

This new interesting idea has been floating around recently, the idea of having lighting as a service business model. The gist of the idea is that manufacturers will install, maintain, and operate customer’s lighting systems with no upfront cost to the customer. The lighting system will pay for itself through energy cost savings. This model is very similar to...

Quality vs. Price

03/11/2014

In 2013, several A-lamps were introduced that not only looked and behaved like incandescent lamps, but also were close to or below the magical $10 price point. It is clear that prices and therefore margins will continue to fall for these lamps. This creates a little bit of a quandary for...

Are LEDs the Same as Smart Phones?

03/07/2014

The DOE recently released their study on Early Lessons Learned on the Way to Market. The study outlines some of the outcomes of LEDs in their earlier days as well as key lessons that have been learned in the early SSL market introduction. The study also strives to understand the key elements needed to pursue Solid State Lighting as the new promising technology. The study, which outlined 12 key lessons by the DOE, can be found on the DOE website.

Mid-power LED Packages are Getting Brighter, Providing the Output of High-Power LED Packages

03/07/2014

Is it time to change definitions?

One of the questions that came up during our conference, Strategies in Light, last week was the question of definitions and categories for LEDs.  As the industry continues to evolve and companies are diversifying and improving their existing line of products almost daily, comparing similar products from different manufacturers is becoming confusing. The category that stirs the most discussions is the category of mid-power LEDs.

LED Fluorescent Replacement Lamps

03/06/2014

As many of you know, last week the Strategies Unlimited team was at Strategies in Light to present data and help out with the proceedings...

The solar market and the 2nd-Derivative Paradox

By Tom Hausken
How could equipment sales in an exponentially-growing market be anything but upward? It happens all the time. Welcome to the 2nd-Derivative Paradox. That's my name for the trap that one can fall into when it comes to capital equipment markets. Solar is a great example. It's hard to explain the paradox, though, so bear with me.

Start with installed capacity. If you are a power generator, you think in terms of the cumulative installed generating capacity in the world. This is what the users actually use. The figure shows three scenarios how that might play out, and they all look pretty much the same in this chart. Nice, steep slopes. Note how they all start at the same point and end up at the same point.



Then look at panel shipments. But the solar panel industry isn't interested in what's already out there. It needs to ship new panels every year. The shipments amount to a 1st derivative: the new capacity that's added to the infrastructure every year. Now the differences in the scenarios show through, as shown in the second figure. But the scenarios all show steep upward growth. What's to worry about?


Now look at panel manufacturing equipment. The solar manufacturing equipment industry, and that includes lasers--isn't even interested in solar shipments, but the need for more manufacturing capacity to make the panels. You only need more equipment when you are shipping more panels than before. That amounts to a 2nd derivative of the cumulative generating capacity, and can give wildly different results. New equipment is shipped in all three scenarios, but in the "sustaining" scenario the equipment shipments are flat year after year, while in the "slowing" scenario they start out strong, but then decline. Ouch.

Other traps. Of course we would all like to live in the "growing" scenario. The trouble is, strong positive exponential growth doesn't last indefinitely, no matter what they say. And that's not even considering some ups and downs along the way, like this year. A slight shift in the solar panel shipments wreaks total havoc for equipment shipments.



Other things that juice equipment sales. The same trap exists in other industries, too. But there are other details to consider. First, there is usually some churn in suppliers. Machines also get obsolete. And there is also the early obsolescence forced by things like Moore's Law. These all have to be considered.

Watch that 2nd derivative. Don't get me wrong. I love solar. I had a summer job at TI testing solar cells back in the Jimmy Carter era. We all believe it's going to be a great thing in coming decades. But it's not enough that the cumulative generating capacity will be on a steep upward slope for years to come, because when it comes to manufacturing equipment, it's the 2nd derivative that counts.

Connect with Strategies Unlimited


Strategies Spotlight

STRATEGIES UNLIMITED FORECASTS GLOBAL HB LED MARKET TO EXCEED $26 BILLION BY 2018

04/14/2014 Mountain View, CA / April 11, 2014 — Strategies Unlimited has released its annual market research report, The Worldwide Market for LEDs: Market Review and Fo...

STRATEGIES UNLIMITED FORECASTS LASER MARKET TO EXCEED $11 BILLION BY 2017

02/04/2014 Mountain View, CA / January 31, 2014 —Strategies Unlimited has now released its annual market research report, The Worldwide Market for Lasers.  Th...

Strategically Blogging

Lighting as a Service

04/15/2014 This new interesting idea has been floating around recently, the idea of having lighting as a service business model. The gist of the idea is that manuf...

Our Expertise

Providing market research reports, analysis, and custom studies to world leaders in:






 

About Strategies Unlimited

Strategies Unlimited is the world leader in market research in photonic devices and beyond.  We produce highly detailed market reports, custom studies and provide consulting services.

Learn more about Strategies Unlimited by clicking on the links below.