LED Lighting Market Trends & ON Semiconductor LED Solutions Overview - 1 of 7

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The LED Lighting revolution is here:
• Global government regulations combined with market forces are the drivers
The opportunity is real and large:
• The retrofit lamps will be the volume driver in the near term
• “Smart Lighting” presents a significant opportunity
ON Semiconductor is well positioned to win with:
• Strong product portfolio
• Complete turn-key solutions
• Breadth of offering

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LED Lighting Market Trends & ON Semiconductor LED Solutions Overview - 1 of 7

  1. 1. 1 LED Lighting Market Trends & ON Semiconductor LED Solutions Overview
  2. 2. 2 • Template • Nov-12 Confidential Proprietary2 Government Regulations Source: McKinsey & Co (2012) Global movement to ban incandescent and in some instances Halogen
  3. 3. 3 • Template • Nov-12 Confidential Proprietary3 Need for Efficient Solutions: Energy Security Source: McKinsey & Co (2012)
  4. 4. 4 • Template • Nov-12 Confidential Proprietary4 Equivalency – in lumen-hours Source: DOE LED Lifecycle Report, 2012 • Average output of a 60 W incandescent lamp is 900 lumens • 1 LED Lamp provides 800 lumens and 25K lifetime hrs  20 million lumen-hours
  5. 5. 5 • Template • Nov-12 Confidential Proprietary5 LED Market is Rapidly Evolving • Lighting accounts for ~1/5th of total electricity world-wide – With the adoption of technology available today, 30% can be saved • Beijing has set a target for LEDs to account for 30% of total general lighting market by 2015 – Estimated to cut annual coal use by 35 million tons • Taiwan can reduce electricity consumption by ~15% if LED lighting is fully adopted • Japan already has 30 percent LED penetration • Phaseout of incandescents in the U..S started in 2011 – Energy Independence and Security Act of 2007 – GE shut down last factory making incandescents in 2011 • IKEA will sell only LED lighting products starting in 2016
  6. 6. 6 • Template • Nov-12 Confidential Proprietary6 LED Bulbs Reach Tipping Point in 2014 Aggressive Market Price Reductions in LED bulbs in the US Source: DOE MYPP 2013, Datapoint 2013: CREE 60W bulb @ $12.97 2013 Retail: $14.97 -40% LED Bulb Efficacy Improvement Dramatic improvements recently and more projected before reaching theoretical LED limit of 268 lumens/watt Efficiency improvements driving Cost reductions LED Cost ($/Klm) Improvement CREE 60W bulb @ $16/Klumen $5 for a 60W bulb in 2020 Anticipate “tipping point” when LED bulbs reach <$10
  7. 7. 7 • Template • Nov-12 Confidential Proprietary7 Market (R)evolution • Drive for energy efficiency and tops-down push aiding SSL adoption • The volume & opportunity today is in “General Lighting” • “Smart” lighting will start to grow significantly in 1-5 years - Driven by the “internet of things” & command/control • Color / CCT Control • Spectrum Shaping • New applications / uses
  8. 8. 8 • Template • Nov-12 Confidential Proprietary8 The LED General Lighting Adoption Curve PHASE 1 Introduction PHASE 2 Rapid Growth PHASE 3 Maturity Compete on Performance Compete on Cost and Scale Compete on Quality and Breadth • Cost still high • Demand needs to be created • Highly fragmented market with many new entrants • Cost reduction on scale • Increased public awareness • Consolidation kicks- off • Volume Surge • Multitude of applications • Industry profit growth slows 2013E 2016E
  9. 9. 9 • Template • Nov-12 Confidential Proprietary9 Global Lighting Market - Huge installed base of 40B units and growing - In 2016, annual units shipped of LED lamps will surpass cell phones - Even with 6B units shipped over the next 5 years, LEDs will only have sub- 10% penetration Source: Datapoint, Corporate Marketing Lamp Sockets – Installed base by Lighting Technology
  10. 10. 10 • Template • Nov-12 Confidential Proprietary10 Global Lighting Market Source: Datapoint, Corporate Marketing Lamps – Annual Unit Shipments & Penetration - Annual shipments of 14B units – declining to 10B due to longer lifetime of LED Bulbs - All lighting technologies flat, except incandescents that will decline - LED experiencing explosive growth and capture 25% share by 2017
  11. 11. 11 • Template • Nov-12 Confidential Proprietary11 The Opportunity • Global Lighting Market is growing and will be $125B USD in 2017 • The General Lighting segment will be the biggest driver, by far Euros Source: McKinsey – Lighting the Way
  12. 12. 12 • Template • Nov-12 Confidential Proprietary12 The Market Revolution Source: Datapoint & ON Semiconductor analysis and estimates (2012) Today Emerging in volume – on the market today “Bulbs get most of the attention due to the sheer size of the market, and this is an important step in adoption. However, bulbs will be a bridge solution and a Trojan Horse for a more sustainable content driven, networked, intelligent market” – CANACCORD, April 2013
  13. 13. 13 • Template • Nov-12 Confidential Proprietary13 Complete Solutions from ON Semiconductor Source: Datapoint & ON Semiconductor analysis and estimates (2012) Today: ON Semiconductor offers LED Drivers + FETs + Power Discretes LED Driver EMI Filter / Prote ction LED Driver + MOSFET MCU Sensors Wired/ Wireless Comm EMI Filter / Protecti on ON Semiconductor will also provide additional solutions for wired and wireless communication, sensors (Ambient, Light, Proximity, PIR) and control (MCUs) customized for Smart Lighting Applications The LED Bulb Networked Lighting (“Smart Lighting)
  14. 14. 14 • Template • Nov-12 Confidential Proprietary14 Complete Portfolio of LED Lighting Solutions • ON Semiconductor has leveraged its leadership position in the Power Supply arena to provide complete solutions for Lighting applications • LED Drivers • High Voltage Power MOSFETs • High Voltage Rectifiers • Bipolar Transistors • Protection Solutions • ON Semiconductor’s expertise in Industrial applications uniquely position the company to exploit the emerging “Smart Lighting” market • Wired & Wireless Communication offerings (Zigbee, KNX, PLC) • Ambient, Light, Proximity and Passive InfraRed (PIR) sensors • Stand-alone and integrated MCUs for “Control” • ON Semiconductor has a broad range of products and technologies that service all the requirements in the replacement/retrofit market
  15. 15. 15 • Template • Nov-12 Confidential Proprietary15 Key Takeaways The LED Lighting revolution is here • Global government regulations combined with market forces are the drivers The opportunity is real and large • The retrofit lamps will be the volume driver in the near term • “Smart Lighting” presents a significant opportunity ON Semiconductor is well positioned to win with • Strong product portfolio • Complete turn-key solutions • Breadth of offering

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