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written by Khatabook | January 27, 2022

LED Light Manufacturing Business

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Table of Content


Halogen lights and the old electric incandescent bulbs are out, and most people today use light-emitting diode (LED) lights. Besides, with technological advancements and the expansion of business models, there is an increased demand for LED lights from the commercial, automotive, and residential sectors. That’s why starting your own LED lighting business is a wise decision. So, let's understand the requirements and other factors necessary to start an LED lights manufacturing business in India.

Did you know? 

The LED systems have a better light quality range from 27 to 45K, use 80% less energy and last 20 times more than the traditional incandescent bulbs.

Why do people switch to LEDs?

LED means diodes that emit light and is a semiconductor that provides visible light whenever a small electric current passes through it. The LED lights are available in several ranges and colours. They are graded as per their light-emitting efficiency of approximately 110 lumens per watt. They consume less electric power, have a longer operating life, and have a slightly higher acquisition cost than the conventional electric compact fluorescent lamp (CFL). For example, a 100W fluorescent tube light can be easily replaced with a 36W LED bulb! That’s why LED has replaced CFL, tube lights, incandescent and other light bulbs both domestically and internationally.

Business models for the LED Lighting Business

The LED manufacturing business model offers two choices when setting up the business. They are:

Retail LED business

If you find it is easier to market the manufactured lighting tubes, incandescent bulbs and industrial lamps, then LED bulb business retailing should be your choice. You can start your LED bulb assembly work from home and supply LED lights to colleges, universities, schools, private institutions, offices or the government from your retail counter. To set up a retail counter, it is critical to find reputed suppliers, and you should ace the market with the quality and pricing of your LED products. A certain amount of prior experience in selling LED items helps, and knowledge of running an effective business could improve your strategy and success.

Also Read: Most Profitable Manufacturing Business to Start in India

Manufacturing LED bulbs or lights business

The LED bulb manufacturing business process is challenging and time-consuming since the scale of operations is much larger. The production process is also complex, requiring far more investment capacity. However, if you don’t want to start with the whole process of manufacturing LED bulbs and lights, the Indian market is great for a LED small scale assembly and processing unit.

Licenses and registrations required

Any entrepreneur starting a business needs good knowledge about the licenses and registrations required to start a LED manufacturing unit. The essential ones for the LED manufacturing business are summed up below:

  • Company Registration: The business can be started as a proprietorship, partnership, LLP or Limited Liability Partnership, an LLC,  or a Private Limited Company. Depending on the ownership choice, the documentation may involve registering the firm with an Ownership document, Partnership Deed, LLP/LLC documentation etc., at the Registrar of Companies (ROC). 
  • GST registration is mandatory.
  • Municipal Authority Trade Licence is required for all kinds of trading activity and must be obtained from the relevant municipal authorities.
  • Pollution Control Board NOC (No Objection Certificate) is essential as the LED manufacturing industry causes pollution and uses certain hazardous materials that are not friendly to the environment.
  • Trade Mark is another procedure that protects your brand name and business branding.
  • Ministry of Micro, Small and Medium Enterprises or MSME Udyog registration & Aadhar Certification is also required. Before applying for the MSME Certification, you must register with the MSME Ministry and obtain the 12-digit MSME Udyog Aadhar Number for your LED manufacturing industry.
  • Certification from the Bureau of Energy Efficiency as to how much energy the plant consumes is also required for manufacturing LED bulbs. 
  • Bureau of Indian Standards (BIS) Certification is required mandatorily for specific LED items notified by the DG of Foreign Trade and is not a country dependent procedure.
  • Importer-Exporter Code (IEC) Code is required if you plan to export your LED products from India.

Pollution control measures in LED Manufacturing

To be compliant with the stringent pollution measures in force, here are some measures to equip your LED manufacture business:

  • Use eco-friendly solvents to clean the circuit boards and reduce the CCL4 or carbon tetrachloride residue, CFCs generated, methyl chloroform emissions, and packaging foams. Methylene chloride, perchloroethylene, trichloroethylene, etc., were previously used and should be replaced with alcohols or ketones in the cleaning process to protect against the detrimental effects of pollution. 
  • The manufacturing LED lighting business process involves hand-soldering, dip-soldering, or wave-soldering that emits harmful gas fumes. 
  • Modern methods and technology can reduce these harmful gaseous emissions and air pollution. 
  • Several new flux materials are also available that contain less than 10% flux solids compared to the 15-35% flux solids produced in the traditional methods.

LED Business Location factors to consider

You will require at least a 600 sq. ft area for the LED business, including processing, storage, packaging, and operational office units. It is also recommended to have 3 sections of your area available:

  • A 320 sq. ft processing unit with manufacturing machines and production-related tasks. 
  • About 100 sq. ft storage unit to store the LED components, raw materials and finished products. 
  • Approximately 180 sq. ft packaging unit for the assembly, testing etc., of the LED bulbs or lights, manufactured or assembled.

But, before selecting your location for the lighting business, keep in mind the following factors.

  • Accessibility: This is important to keep your transportation and delivery costs lower. Choose a location that has good transportation links and is close to the highway or main road.
  • Pricing: Business prices and rates at the location as well as the LED light manufacturing plant cost in India must be studied closely to make the most of your profits. The pricing factor has many variables like cost of supply, LED bulb manufacturing plant cost PDF, delivery costs, transportation, availability of raw materials etc. Also, account for the rents, utility bills, property tax, cost of maintenance, parking costs, security deposits involved etc., that are taken into consideration to calculate the working capital required and the final product price.
  • Competition: Check out your competitors in the manufacturing of LED bulbs business, their prices, customers, suppliers and business differentiators before you start your LED manufacturing unit.
  • Foot-falls and traffic: An area with higher traffic generates more foot-falls and is good for the sales of your LED business. 
  • Business Potential: This is another critical factor for the growth of your business. Identify the market for your product in your chosen location before establishing your business.

What are the Raw Materials required?

For the LED light manufacturing assembly system (up to 10W), the raw materials required are listed below:

  • LED boards and required chips
  • Metallic bulb holders
  • Heat sinks
  • Rectifier with filter circuits
  • Plastic body and reflector glass
  • Connecting wire and soldering flux
  • Packaging materials 
  • LED manufacturing equipment

Other equipment listed below will also be required for the LED light manufacturing business.

  • Soldering machines
  • LCR meter
  • Sealing machine
  • Drilling machine
  • Digital multimeter
  • Packaging machines
  • Continuity tester
  • Oscilloscope
  • Lux meter

What is the 4-step manufacturing process?

A. Making the wafers of semiconductors

This LED bulb manufacturing business process has the following steps:

  • The primary semiconductor wafer is made from composite materials like Gallium arsenide (GaAs), Gallium phosphide (GaP), etc. It depends on the LED colour to be produced. A high temperature and pressure chamber to develop the semiconductor crystals is required where the materials are mixed with elements like Phosphorus, Gallium, Arsenic, etc.
  • The chamber is used to liquefy, fuse and press the materials together and then turn them into a solution. A boron oxide layer is used to cover the materials to prevent their escape from the chamber and to seal them in. The entire process is called the method of Czochralski crystal growth or liquid encapsulation method.
  • A rod is then dipped into the hot crystalline solution and slowly extricated from the chamber as the liquid cools to leave behind a cylindrical got or boule of GaAs, GaAsP, or GaP in the crystal.
  • The ingot is then sliced into several semiconductor wafers of approximately 10 mil thickness.
  • The wafers are polished with more semiconductor layers applied to the surface after sanding until a smooth surface is obtained.
  • Always look if the LED crystals and wafer are being built up or not as the polishing process and crystal variability can degrade the functioning of the wafer crystal.
  • Next, clean the wafers using a solvent and ultrasonic to remove the flux, dirt or impurities from the polished wafer surface. This is critical to good quality light.

B. Adding the epitaxial layers

The process followed in  the LED bulb manufacturing process is explained in detailed below-

  • The wafer surface is built up with the addition of layers of semiconductors, dopants, etc using the LPE or Liquid Phase Epitaxy method.
  • With this technique, the layers of semiconductors are biased using crystalline orientation during the deposit process of the molten GaAsP. The wafer is kept on a graphite slide and pushed through the molten liquid container several times. Multiple electronic density layers are  made using a different dopant in a sequence of melts or a single melt to create a wafer of LPE material of sufficient thickness.
  • The wafer is then placed in a furnace tube with high temperature, to diffuse the dopants like Nitrogen, Zinc, or Ammonium into the air. Nitrogen is used to produce a green or yellow colour.

C. Adding the Contacts

  • The wafer has the metal contact defined on it and the pattern of contact depends on the combination of diodes.
  • The contact patterns are cloned in a light-sensitive compound called photo-resist, spread over the wafer’s surface as it is spinning. A quick heat at 100 degrees C is required to harden the photoresist.
  • Next, place the photoresist mask on the wafer for cloning the mask while exposing the layer of resistance under ultraviolet light. Wash the exposed areas with the developer.
  • The metal contact is then filled onto the exposed wafer area through evaporation in a chamber with high vacuum-sealed temperatures. The vaporizing metal gets deposited on the exposed wafer, and Acetone is used to clean up.
  • An amalgamating process follows to ensure a robust connection in a furnace chamber with Nitrogen and Hydrogen.
  • The process is repeated 6000 times to get a 2-inch semiconductor wafer.
  • To cut the wafer of diodes, you may use a diamond saw or a cleaving saw. 

D. Packaging and Mounting

  • All dyes are package mounted and have 2 metal 2-inch leads if the diode is to be used in an indicator light or jewellery.
  • The wafer back forms the electrical lead contact while the second lead has the tiny gold fastener lead with its surface of patterned contacts that are either wire-bonded or on the dyed surface. 
  • The entire wafer so assembled is placed in an airtight plastic sheet with optical requirements as specified for the package. The dye is then filled with liquid plastic or epoxy after checking the trueness of all-optical parameters using a connector or end lens as required.

Also Read: Setting up a successful plastic manufacturing 

Conclusion

LEDs are the best-suited way to save electricity and have a better quality source of light at a reasonable price. They are also the future of lighting systems and have a great demand. Thus, starting the LED light business can be profitable as a business venture.

Follow Khatabook for the latest updates, news blogs, and articles related to micro, small and medium businesses (MSMEs), business tips, income tax, GST, salary, and accounting.

FAQs

Q: What are the essential machines required for LED light manufacture?

Ans:

Your equipment list depends on the type of LED products you manufacture. But, generally, the following equipment helps in the assembly and manufacture of LED lights.

  • PCB assembly machine
  • LED assembly machines
  • SMD chip mounting machine
  • Tube light assembly machine
  • High-speed mounting machine
  • Candlelight assembly machine

Q: Which are the top LED companies manufacturing in India?

Ans:

India’s LED bulb business profit share has been boosted by over 50% in global markets due to these top-rated manufacturing giants of LED lighting and fixtures.  

  • Philips Electronics India Ltd
  • SYSKA LED
  • Havells India Ltd
  • Bajaj
  • Surya LEDs
  • Osram India Pvt Ltd

Besides non-branded companies like 3S International, Halonix, Eco Lite Technologies, Compact, INSTAPOWER and several others also offer good quality LED lights at cheaper prices.

Q: Where can I market LEDs?

Ans:

LEDs manufactured can be marketed through several methods and involve a choice of markets like

  • Retail Markets.
  • Wholesale Markets
  • Export Market
  • Online Market like B2B websites, B2C websites etc.

Q: What are the quality parameters that require testing?

Ans:

Quality checks are essential during the wire-bond process. The current and voltage supplied play a critical role.  All LED lights need to be checked for colour, brightness, damage, stress testing for power fluctuations, breakdown, operational characteristics, heating, life tests, etc. These can be easily managed through appropriate automation.

Disclaimer :
The information, product and services provided on this website are provided on an “as is” and “as available” basis without any warranty or representation, express or implied. Khatabook Blogs are meant purely for educational discussion of financial products and services. Khatabook does not make a guarantee that the service will meet your requirements, or that it will be uninterrupted, timely and secure, and that errors, if any, will be corrected. The material and information contained herein is for general information purposes only. Consult a professional before relying on the information to make any legal, financial or business decisions. Use this information strictly at your own risk. Khatabook will not be liable for any false, inaccurate or incomplete information present on the website. Although every effort is made to ensure that the information contained in this website is updated, relevant and accurate, Khatabook makes no guarantees about the completeness, reliability, accuracy, suitability or availability with respect to the website or the information, product, services or related graphics contained on the website for any purpose. Khatabook will not be liable for the website being temporarily unavailable, due to any technical issues or otherwise, beyond its control and for any loss or damage suffered as a result of the use of or access to, or inability to use or access to this website whatsoever.
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Disclaimer :
The information, product and services provided on this website are provided on an “as is” and “as available” basis without any warranty or representation, express or implied. Khatabook Blogs are meant purely for educational discussion of financial products and services. Khatabook does not make a guarantee that the service will meet your requirements, or that it will be uninterrupted, timely and secure, and that errors, if any, will be corrected. The material and information contained herein is for general information purposes only. Consult a professional before relying on the information to make any legal, financial or business decisions. Use this information strictly at your own risk. Khatabook will not be liable for any false, inaccurate or incomplete information present on the website. Although every effort is made to ensure that the information contained in this website is updated, relevant and accurate, Khatabook makes no guarantees about the completeness, reliability, accuracy, suitability or availability with respect to the website or the information, product, services or related graphics contained on the website for any purpose. Khatabook will not be liable for the website being temporarily unavailable, due to any technical issues or otherwise, beyond its control and for any loss or damage suffered as a result of the use of or access to, or inability to use or access to this website whatsoever.