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LED industry area landscape change packaging capacity to accelerate the shift to China
Mar 07, 2017

In recent years, along with the improving of the LED permeability, the global LED industry growth is slowing, and in the domestic market, the LED chip vendors, share more than seventy percent share, global packaging capacity to accelerate transferring to China, also is expected to 2017 mainland packaging production capacity will continue to keep growing.

The LED industry area pattern change

After a high-speed growth in previous years, the global LED industry is gradually entering the "plateau", growth is slowing. Among them, the Chinese manufacturer's market share continued to improve, is playing a more and more important role.

In the field of upstream LED chips, China market size of 13.9 billion yuan in 2016, year-on-year growth of 9%, chip GuoChanLv rose to 76%, the top 10 manufacturers, share rose to 77%; And in the field of middle encapsulation, the size of the market in 2016 reached 2016 yuan, year-on-year growth of 6%, GuoChanLv rose to 67%, the top 10 manufacturers, share rose to 43%.

Now LED the technology gap is narrowing of the enterprise, on both sides of the Taiwan mainland manufacturers on the price advantage is obvious. Expansion has, for the moment, the manufacturers are mainly concentrated in the mainland, which predicts that LED the localization rate will continue to improve in the future.

In addition to the upstream of the LED chip, in LED encapsulation link, the industry also is entering a smooth development. Industry forecasts, from 2015 to 2020, compound growth rate of only about 6%, growth is far more less than in previous years.

"Although the industry growth rate slowed significantly, but the area of industry structure changes, the global packaging capacity is accelerating shift to China". Yu Bin said, as some international companies such as philips, samsung, foundry factory capacity in China is increasing.

Due to cost pressures, the domestic many LED enterprises is shifting from the pearl river delta to other areas, such as wood Tomlinson began experimenting with some manufacturers such as shift to jiangxi, jiangsu and other places. In addition, due to the industrial structure gradually clear, giant has now, part of the small and medium-sized enterprise transformation also beginning to show signs of other industries.

New technology and new applications to promote growth of the industry

Looking ahead to 2017, LED the market remains competitive, companies will accelerate to display small spacing, infrared and ultraviolet LED niche market in order to profit, forecasts the global LED market output value will reach $2017 in 15.4 billion, the annual growth of 4%.

"Small spacing LED display market become mohican." Store in said, due to the small distance between the LED display screen LED LED of geometric use quantity growth, attracting many Chinese LED assembly house to expand capacity to those of the market pie. In addition, the infrared LED in areas such as security, iris recognition and VR application boundless opportunities.

In 2017, another important thing is the micro LED products is expected to come out. In the expert opinion, the LED is to have a chance to replace the next generation of OLED panel display technology, currently has attracted many brand companies into research and development. Although at this stage micro LED distance instead of TFT - LCD (liquid crystal) and OLED display is still very far away, but some manufacturers has plans to launch application, forecast appeared in succession in 2017 will be a micro LED products.

According to sun yat-sen university - joint, an assistant professor in the college of engineering at Carnegie Mellon university Liu Zhaojun introduction, is considered to be ideal for the next generation of micro LED display technology, its application will include large and medium size outdoor/indoor large screen, desktop/notebook computer monitors, mobile phone/digital camera/portable projector screen, smart watches, bracelets and wearable products.

In addition, like industrial lighting, automotive LED, LED lamp filament niche markets are widely popular. Global industrial lighting market size for $2.932 billion in 2016, after a few years with the growth rate of more than 15% growth, predicts 2020, the size of the market will reach $5.204 billion.


"At present, automotive LED the trend the most explosive, car to light, tail light, etc. Choose LED the way more and more, due to the small volume, strong brightness, LED up the car design aesthetic feeling." Light vehicle center, deputy director of the zhong-wei wang said.

The market price or rose slightly

Due to the upstream raw materials costs rise, the LED industry into the surge in an all-round way. In may last year, Taiwan chip electric open the first wave of chip prices then mainland three Ann photoelectric, HuaCan photoelectric followed suit. At present, the surge has to terminal consumer applications. The industry predicted that in 2017 LED industry will maintain their current conditions, price is even further edged up space.

Since 2016, the LED industry successively in the five round of price increases, price increase is the main factors of the supply side rising prices of raw materials, as well as the small spacing on demand rapid growth in the field of LED display this segment.

In his view, the two years before the domestic LED chip prices fell sharply, so 2016 price is bottoming rebound after the crash. But on the other hand, due to the price of some LED products supply shortage phenomenon, is not a full reversal of the market, rather than structural shortage.

Due to the current rise in price is mainly cost factor, demand growth benefit of enterprise is not much, so prices benefited range relatively limited, mainly in the display supply chain and have the ability to pass on the cost of downstream production. Most of the middle and lower reaches of the manufacturer still face need not cost of materials is in rapid growth, which affect profitability.

In view of the current of the LED, LED by three Ann and electricity, leading enterprises in the LED chip market price game, wang, 2017 chip makers should adopt a reasonable strategy, avoid the "prisoner's dilemma", maintain industry into the cooperative game model, the last 2016 years don't drop the price rise, avoid vicious competition back into a price war.