In recent times, EBV has become increasingly involved in the LED lighting segment. In light of the market volume and due to the expected growth rates, the distributor has set up a team of experts led by vertical segment director for EMEA, Bruce Lynch, who in an interview shared his thoughts about the latest trends shaping the LED lighting market.
Q: What are the decisive factors in determining a distributor’s success in the LED lighting market?
A: In my opinion, there are three decisive factors in this field: first and foremost, the people; then the manufacturers’ line card; and finally the ‘ecosystem’. Let me deal with these in more detail.
Regarding point 1: The lighting market is completely different to the traditional semiconductor markets. It is not sufficient merely to maintain the supply chain; experts are called for. This is why, four years ago, EBV started setting up a team to deal exclusively with the issue of lighting. There are now 16 people in the team in EMEA providing on-site help to customers.
Point 2 is with regard to the suppliers. EBV can look back on long-standing relationships with the major LED suppliers such as Osram and Avago. EBV has also recently begun working very closely with the LED manufacturers Everlight and Luminus. In addition to which, the company enjoys relationships with leading suppliers of optical, thermal and driver IC products.
Thirdly, EBV has set up an ‘ecosystem’ which gives our customers access to Premium Lighting Partner services. Thanks to their expertise, these partners can help the manufacturers of lighting equipment bring their concepts and designs to market just that bit quicker.
Q: What motivated EBV to proceed so aggressively in what is, after all, an obviously challenging market?
A: I would initially like to answer this by referring to some figures that were published by an independent market research company. Their investigation focused on the high brightness LED market and their findings showed that the worldwide HB LED market shot up from $5,6 billion in 2009 to $10,8 billion in 2010, a growth rate of 93%, and that the total market is expected to reach $18,9 billion in 2015, representing a compound annual growth rate of 11,8%. Naturally, these attractive growth rates are the reason why we are focusing on the high brightness LED segment.
Q: What is your current position in this market? According to research, EBV already has a significant share of the optoelectronics market at between 32% and 35%.
A: Yes, according to DMASS, we enjoy a market share of around 32% in the field of optoelectronic components. With regards to LEDs, we are quite well positioned with the products in the sub 0,5 W class. Above 0,5 W, we have not yet reached the point we would like to. This is why we are focusing on this area of ‘high brightness/high power’, an area in which exponential growth is also expected.
Q: What sets EBV apart from other distributors, at least in terms of activities in the field of LED lighting?
A: The major difference is that we respond to the particular concerns of this market. I believe that explaining the technology of LED lighting to the customers and familiarising them with it will be decisive. This is why we work very closely with our customers. The traditional manufacturers of lighting equipment generally have a concept, and we advise them on how to transform this into a marketable product as quickly as possible.
The important thing is that we offer a single, central point of contact. This means that we have contact with the LED and IC manufacturers, and we can also assist the customers during the development phase by providing the necessary expertise. This is what distinguishes us from conventional distribution: instead of focusing on individual design wins of components, we try to offer the optimum solution.
We can then take a look at what is on the bill of materials, ie, the parts list, and try to increase the EBV share of it. When working together with us, the customer has the advantage that they can launch their product on the market just that bit quicker.
Naturally, our day-to-day business involves offering our customers individual solutions for the supply chain and our customers must be able to rely on us being able to act as their supplier when they increase their production.
Q: The designer of an LED light must not only offer a special power supply but also dissipate the heat which the light source develops. How does EBV assist the lamp manufacturer in these cases?
A: First of all, I must be perfectly honest about one thing: we cannot do everything. But this is precisely the reason why we have created our ecosystem with outstanding partners. With regard to the question of heat dissipation, we are working with the Swedish company Aluwave. This company has developed an extremely innovative and unique circuit board, marketed under the name Alunat. This product is a multilayer, ceramic-based circuit board with which electronic assemblies can be cooled efficiently.
In general, we also use our partners’ expertise and refer our customers to these companies when necessary. For example, in Germany we work with Soluxion, a company that can assist a lamp manufacturer in developing a product from the initial design through to the production stage.
Q: In lighting technology, the light bulb socket and later on the socket for luminescent tubes were regarded as paradigms for standardisation. Could you ever see EBV playing a major role in a standardisation initiative for LED lighting?
A: An interesting question. However, we believe that it is not particularly likely that such a consortium will be founded. What we can see in the various manufacturers is that they want to differentiate themselves from the competition.
We can also see this among the manufacturers of components. They prefer to adapt the things to specific applications instead of trying to achieve standardisation. In addition, we are working in an industry in which technical development moves forward very quickly, so quickly in fact that it is barely possible to establish standards here. There are therefore hardly any standards in the LED industry.
Q: What technical obstacles are standing in the way of a breakthrough in LED lighting?
A: When we look back at the previous development of LEDs, we can see that what was always at stake for the LED manufacturers was improving efficiency, ie, increasing the lumens per Watt. To achieve this, an entire series of technological difficulties had to be overcome.
Today, however, the manufacturers are supplying us with LEDs with brightness and levels of efficiency that exceed what we used to call the ‘magic limit’ only a few years ago. Naturally, there is still a magic limit with the ‘lumen per dollar’, but it is to be expected that the level of efficiency can be further increased while also lowering costs.
Q: In recent times, there have been more and more news stories that the raw materials for manufacturing specific semiconductors or devices could grow scarce. Do you see a danger here, and can the distributors counteract this?
A: Answering this question is part of our strategy. When it comes to establishing a supply chain, we see it as our duty to respond to the concerns of our customers and of our suppliers. To this end, we must know our customers’ goals and ideas and inform the manufacturers of the relevant requirements so that they can organise their production capacities in such a way that the customer does not experience any bottlenecks at the point of production startup.
In other words, we primarily see our role as working together with our customers in order to understand what they are developing. This forms the basis for our forecasts, with which we keep our suppliers up to date.
Instead of just ordering and supplying, our rule of thumb is to anticipate market developments and provide sufficient inventories. This also applies in all divisions and allows us to assist our customers to the best of our ability by balancing out the high and low points in production. However, the central focus remains working closely together with our customers so that we are involved, right from the start of a new development.Bruce Lynch has been segment director for the lighting division at EBV since May 2010. An experienced engineer, he joined the company after working at Future Lighting Solutions for more than four years. He launched his career in the semiconductor industry at Motorola, first of all in East Kilbride in Scotland and then in Toulouse, France. There, and later at Freescale, he spent many years looking after 8-bit and 16-bit microcontroller customers.
For more information contact EBV Electrolink, +27 (0)21 402 1940, [email protected], www.ebv.com
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