Although the majority of module and light engine manufacturers offer standardized products, the majority of the module and light engine market is manufactured on a custom basis. Many of the manufacturers interviewed for the LED Modules & Light Engines – 2015 report indicated that greater than 70% of their module and light engine products were done on a custom basis, with some claiming 100%. For example, in Japan, most of the modules and light engines manufactured for Japanese lighting products are done on a custom basis. Even with standard products, customers often want to change certain things about the product so that it becomes a custom product by the end.
Organizations like Zhaga aim to move these markets into more of a standardized market, allowing for a level playing field and more options among luminaire manufacturers. There are many module and light engine configuration possibilities, and it varies by manufacturer, making standardization all the more difficult. Tier 1 and high end luminaire players prefer custom products because they want unique designs and a degree of freedom over these designs. Tier 2-3 players and low end players are more likely to use standardized products. These lighting companies often don’t have the electrical engineering support or understanding of thermal management. They want to get to the market fast and usually cannot do this on their own; a way to get around this is to purchase standardized “plug and play” products that can easily be incorporated into their designs.
Understandably, module and light engine manufacturers want to see the market move towards more standardized products so volumes can increase. Making customized products for larger luminaire companies is not so much an issue because the large luminaire manufacturers can provide volume; however, customers with small runs make it difficult for module and light engine manufacturers to stay price competitive since the volumes are not as high. Without high volumes, they cannot erode the price enough. Strategies Unlimited anticipates that tier 2 and 3 players will begin buying more standardized products within the next 2-3 years.
More information on the newly released report can be found here >>