Shaoxing Xinshan Science Technology Co.,Ltd
You Are Here:Home > News > Content
Products Categories
Contact Us

Shaoxing Xinshan Science Technology Co.,Ltd

Address: Dongfangyimai, No. 2, Pujiang Road, Shaoxing, China

Tel: 86-575-85121398

M/P: 86-13305858081

Fax: 86-575-85133128



In 2017, LED Chips Will Be In Short Supply
Jul 07, 2017

In 2017, LED chips will be in short supply

SAN 'an has issued a price increase notice, raising the price of the s-30mb/s-32bb series of products by 8%, and the first shot of the 2017 LED chip price increase. Industry insiders say LED chips will be in short supply in 2017 as supply-side capacity declines and demand steadily rises.

Supply and demand relationship improvement

Before 2016, LED chip makers expanded their operations, creating overcapacity and a rapid decline in prices that LED to upheaval in the LED industry. A number of poorly run small businesses have cut production or transformed because of poor technology, and LED companies have pulled out of the market. At the same time, state subsidies for MOCVD equipment have been reduced, and cash-strapped small businesses have been unable to expand. Overseas LED chipmakers have also seen a sharp drop in profits and lower gross margins.

However, since 2016, with the steady growth of demand, the supply and demand relationship between the LED industry has gradually improved, and recently, there has been a high price increase in products. Industry insiders told China securities journal that it is not only the price of LED chips, but also the screen. Previous manufacturers have been too conservative in demand forecasting, resulting in insufficient capacity. Meanwhile, intellectualized products expand rapidly, and demand for products such as chip screens has increased dramatically. These factors add up to aggravate the contradiction between supply and demand.

Guangfa securities believes that the price increase of SAN 'an is the cause of cost. On the other hand, the LED chip industry has been concentrated in the hands of several large manufacturers, with a stronger presence, as small and medium-sized manufacturers have pulled out.

Concentration improvement

Experts say that after deep shuffling of the LED industry, supply-side reform is adequate.

From the upstream of LED, the concentration degree accelerates, forming higher industry barriers and strangles the expansion of disordered capacity. At the same time, the downstream applied innovation-driven industrial chain development. From the current situation, LED lighting accelerates penetration, LED lighting intelligently, networked drive small space to show the market acceleration explosion, becoming the main driving force of the new round of LED industry growth.

By the end of 2017, the effective capacity of LED chips is about 83.28 million tablets, with a demand of about 92.35 million tablets, according to guosen securities. Among them, the demand for lighting chips is 4704 million, up 20% year on year. Outdoor full-color screen demand 26.02 million tablets, up 5% year on year; The small spacing in the household is 1.02 million, up 50% from the previous year. The phone's back light demand is 1.39 million pieces, the tablet computer has the back light demand of 410,000 pieces, the computer and the TV back light demand 6.99 million pieces, the automobile lamps and lanterns needs 1.06 million pieces.

Industry insiders believe that LED chip capacity is still below demand. Given the steady growth of demand in 2017, LED chips will be in short supply.

SAN 'an is the only company in the country that is engaged in the production of all color LED chips. The company is actively expanding its capacity and is expected to have 400 MOCVD equipment by the end of 2017. Overseas LED giants such as philips, Seoul semiconductor, LG, samsung and CREE have been largely shut down, and new demand has been outsourced to SAN 'an, and the company's overseas customer orders are expected to improve further.