Scale of Chinese LED Package Market to Expand by 5% Annually in 2016
June 16, 2016 | TrendForceEstimated reading time: 2 minutes
The scale of China’s LED package industry grew just 2% annually to US$8.8 billion in 2015, according to the 2016 Chinese LED Chip and Package Industry Report by LEDinside, a division of TrendForce. The weak performance of the Chinese LED industry last year was mainly attributed to the global economic slowdown.
LEDinside analyst Allen Yu said the market is showing some signs of rebound this year as branded lighting vendors have been restocking their inventories, thereby generating demand and boosting the capacity utilization of LED chip suppliers. Only a few chip suppliers have raised prices, but their efforts are enough to stop the general downtrend in the chip market. Consequently, package prices will also remain stable in the short term. As the industry enters its maturation phase, technological advances have lowered LED usage volumes for some applications and caused these markets to contract. LEDinside projects the scale of the Chinese LED package industry to grow 5% annually in 2016 to US$9.3 billion.
The main growth driver for the Chinese package industry last year was the lighting sector. However, lighting’s contribution to demand growth was smaller than anticipated due to the weak U.S. and European economies. Yu pointed out that the Chinese exports of LED lighting products slowed down dramatically from the annual growth rate of 60% in 2014 to 16% in 2015, when they reached US$16.4 billion in value.
The scale of China’s LED backlight market has contracted as technological improvements continue to reduce LED usage volume. As for the Chinese LED display market, demand is growing for the fine-pitch LED display application, but this market is still too small to make a significant contribution to the overall demand.
As Chinese package suppliers increase their market shares, foreign competitors adopt strategies to differentiate themselves
LED package suppliers saw their revenues being squeezed last year as LED lighting vendors, who were under immense competitive pressure, compelled them to cut prices as well. China was the weakest region for foreign suppliers as their revenues from that market fell by 10% on average in 2015. Chinese suppliers, by contrast, posted annual revenue growth of 7% on average for the same year. Chinese package companies increased their revenues against the market headwinds because they benefitted from the successes of their compatriot LED lighting vendors in Southeast Asia, India and other emerging markets. Yu expects non-Chinese package suppliers to differentiate their products and develop new market segments as to avoid head-on price competition against the Chinese suppliers.
Suggested Items
Digitalisation and ESG
04/19/2024 | Marina Hornasek-Metzl, AT&SDigitalisation and ESG are prominent and high-priority topics in the global business community. The first focuses on applying technology throughout the value chain to produce faster, smarter, and more desirable business outcomes. The latter emphasises the broader value a business is expected to create for its stakeholders from an environmental, social, and governance perspective.
Real Time with... IPC APEX EXPO 2024: Looking Back, Looking Forward With IEC
04/19/2024 | Real Time with...IPC APEX EXPOIEC came to the RTW booth and discussed both the legacy of IEC's past and the vision for its future. Industry veteran Bruno Ferri highlighted his quarter-century tenure in the industry and with IEC since its founding. He still exhibits boundless enthusiasm for the industry. Brando Stone, a young professional and a future face of IEC, talked about IEC's plans going forward and his experience at this year's IPC APEX EXPO.
Seeking Employment: Meet Parker Capers
04/18/2024 | Barry Matties, I-Connect007Parker Capers, a cybersecurity professional with a decade of experience in the SMT industry, earned a bachelor’s degree from DeVry and is CompTIA Security Plus certified. He is open to various industries but has a strong affinity for manufacturing due to extensive familiarity. Parker appreciates smaller companies where personal connections matter. Are you hiring?
SEMI Applauds CHIPS Program Office Progress to Diversify U.S. Semiconductor Industry Workforce
04/18/2024 | SEMIThe SEMI Foundation, the arm of SEMI dedicated to supporting economic opportunity for workers and the sustained growth of the microelectronics industry by creating pathways and opportunities for job seekers, applauded strides made by the CHIPS Program Office to diversify the U.S. semiconductor industry workforce and its release of the First Annual Report Regarding the Opportunities and Inclusion Activities Undertaken by the Department of Commerce.
VDMA: Machine Vision Navigating Through Uncertain Times
04/18/2024 | VDMAFor over a decade, the European machine vision industry has reported steady growth, with turnover increasing by an average of 9 percent annually between 2012 and 2022. Despite a temporary setback in 2020 (minus 4 percent) due to the Covid-19 pandemic, the industry rebounded strongly in 2021 (plus 17 percent) and 2022 (plus 11 percent).