5000

Patents

owned by Universal Display worldwide for organic OLEDs

4

Times More Efficient

Universal Display’s OLED technology 4x more energy efficient than conventional fluorescent LEDs

16.6%

CAGR

in Universal Display’s total revenue between 2016 - 2020

View Our Analysis

The Path to Drawdown: LEDs

Invented in 1994, Light-emitting diodes (LEDs) are designed as high-brightness, high-efficiency light bulbs. LEDs work like solar panels in reverse, converting electrons to photons rather than the other way around. LEDs use 90% less energy than incandescent bulbs and half as much as compact fluorescents for the same amount of light. While other lighting technologies convert energy into heat (and most of it wasted), LEDs turn 80% of their energy use into light.

LED lighting has many environmental advantages. Its efficiency in converting energy into light helps reduce electricity consumption and air-conditioning usage. For people without access to ample energy, LEDs can be powered with small solar cells and can replace costly kerosene lamps and their noxious fumes and emissions. Where LEDs are used in streetlights, they can save up to 70% of energy and significantly reduce maintenance costs.

Project Drawdown predicts that if LED lighting becomes widely used in the residential and commercial lighting markets, it can help avoid between 10.2 - 10.8 gigatons of CO2 emissions in housing, and between 5.9 - 6.7 gigatons in commercial buildings. To achieve this, the global market share of LEDs needs to scale fast:

  • <::marker> In 2018, LEDs comprised 3% of the total commercial lighting market and 2% of the residential lighting market
  • <::marker> By 2050, LEDs should account for 95% and 90% of the residential and commercial markets, respectively
  • <::marker> That’s 12.82% CAGR for residential LED, and 11.21% CAGR for commercial LED lighting between 2018 - 2050.

What We Want to See Improve

Track Sustainability Metrics

We are dismayed that there are no mentions of sustainability or climate change on Universal Display’s website, reports and presentations. As a company that produces energy efficient lighting and display technology, we would like to see Universal Display leading the way toward a decarbonized future. This begins by tracking their own direct and indirect GHG emissions, setting targets to reduce these emissions, and publishing these metrics and targets in an annual ESG report.

Diversify Suppliers

Universal Display notes (p. 23) that they rely solely on PPG to manufacture the OLED materials they use and sell to product manufactures. Their agreement rolls over every year, and Universal Display acknowledges that if this relationship is disrupted, it would have an outside negative impact on their revenue. We urge Universal Display to broaden their supplier base so as to make their supply chain more resilient to potential shocks.

Clean Up Supply Chain

We appreciate that Universal Display provides some information about their suppliers and makes their supplier code of conduct available on their website. We also commend them for pushing suppliers to adhere to environmental protection and resource conservation. But we would like Universal Display to go further and require suppliers to reduce their GHG emissions by a concrete amount in the short-term. A company with the purchasing power of Universal Display can and should put strong pressure on their suppliers to reduce their carbon footprint.

Related LED Lights Stocks in the Climate Index

View All Climate Index Stocks →

Allocated Company Description

5.00%

Applied Materials (AMAT)

Applied Materials supplies equipment, services and software for LED manufacturing. LEDs help conserve energy and cut emissions

0.56%

Universal Display (OLED)

Universal Display makes organic LEDs, replacing fluorescent and incandescent lighting and improving building energy efficiency

0.47%

Acuity Brands (AYI)

Acuity makes LEDs, smart lighting and building technology solutions that can improve energy efficiency and emissions from buildings

0.40%

Power Integrations, Inc. (POWI)

POWI makes energy-efficiency products like AC-DC power converters and LED drivers. These solutions help buildings conserve energy and cut emissions

0.28%

Diodes Incorporated (DIOD)

Diodes makes a range of semiconductor products for LCD display, LED monitors and lighting. LED lighting is a key solution for cutting building emissions

0.07%

Veeco Instruments Inc. (VECO)

Veeco makes equipment and processing systems used in making high-tech LEDs. Energy-efficient LEDs help buildings cut energy use and emissions

0.05%

Magnachip Semiconductor Corp. (MX)

Magnachip Semiconductor derives its revenue in part from the promotion of LEDs and solar PVs, through the sale of LED products and products used with solar PVs. It creates no products specifically for the fossil fuel industry.

0.02%

Agrify Corporation (AGFY)

Agrify provides LED lighting and other products for high-yield indoor agriculture. Efficient LEDs are an energy-saving alternative to conventional lights

0.02%

Amtech Systems, Inc. (ASYS)

Amtech Systems makes semiconductor equipment for LED and power device applications. LED lighting helps buildings cut emissions

0.02%

AXT, Inc. (AXTI)

AXT sells semiconductor substrates used in LEDs, thermal imaging, and autonomous vehicles. It makes no products specifically for the fossil fuel industry, thus passing our revenue filter.

0.02%

Energy Focus (EFOI)

Energy Focus makes LEDs for the Navy, federal, state and local governments, and big organizations, helping them save energy and cut building emissions

0.02%

Highway Holdings Limited (HIHO)

HIHO makes electronic components, some of which are used in making LEDs. LEDs are energy-efficient lighting that can cut emissions from buildings

0.02%

SemiLEDs Corporation (LEDS)

SemiLEDs makes LED components for lighting and other applications. LEDs are an energy-efficient lighting alternative that can cut building emissions

0.02%

LSI Industries Inc. (LYTS)

LSI Industries makes LEDs for automotive, restaurant, retail and grocery store customers. Energy-efficient LEDs help buildings cut emissions

0.02%

Orion Energy Systems, Inc (OESX)

Orion offers LED lighting and custom-made energy management systems for big organizations - a solution that cuts energy use and emissions from buildings

0.02%

O2Micro International Limited (OIIM)

O2Micro International makes LED products and lighting. LEDs are an energy-efficient lighting alternative that can cut emissions

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