LED Industry Faces Tough Times, Reports Research In China
LED manufacturers saw substantial price declines in 2011, and can expect much of the same until 2014, reports China-based business analyst Research in China.
According to the analyst firm, many Chinese companies entered the LED industry around 2009, as manufacturers of notebook computers and monitors started replacing cold cathode fluorescent lamps backlight units with LED versions.
Since then, LED prices have fallen and front-end epitaxy developers in particular have suffered steep price declines. The over-supply of LEDs that followed has been compounded by shrinking LED-TV shipments in Q2 2011 and the adoption of LED chips with higher brightness.
Research In China asserts companies in Taiwan and South Korea have been hardest hit by the declining price. And while the number of Chinese LED chip projects initiated between 2009 and 2010 totalled 46, only 20 were put into production.
Of the remaining 26, 16 have failed to go into operation, and ten have been cancelled or saw little progress.
Crucially, the original 46 projects planned to buy 1220 MOCVDs, but only 436 MOCVDs have actually been purchased.
Research in China also believes the China LED lighting industry, which has rallied much optimism amongst LED manufacturers, is by no means as promising as expected.
According to the analyst, a large disparity between the price of LEDs and compact fluorescent lamps (CFLs) still exists, where even the price of the lowest-priced LED bulb is about five times higher than the a CFL.
Taking a worldwide view, China in Research says Japan has the largest LED lighting market. Global sales of LED bulbs reached 41 million units in 2011, of which Japan accounted for 62%, and Europe made up 16% of these.
Fueled by the boom of Japanese market, Japan-based nitride semiconductor developer, Nichia, continues to widen the gap with its rivals, with revenue from LED chips is estimated to surpass US$3 billion.
Meanwhile, dragged by the European economy, Lumileds and OSRAM Opto Semiconductor present weak performance. And as China in Research points out, these companies still lag far behind Cree, Nichia and Toyoda Gosei in terms of technology.
Top 27 LED Companies by Revenue, 2010-2012 (Unit: Million USD)