LEDinside Chief Analyst Market Seminar 2015, was successfully held in Shenzhen Marco Polo Hotel located in Shenzhen, Guandong Province, China on Jan. 9, 2015. HC SemiTek was the honored title sponsor of this year’s seminar. LEDinside analysts shared their latest research findings on the LED industry, and an unprecedented number of industry elites gathered at this year’s hall.

Roger Chu: LED manufacturer growth opportunities lie in special application as LED chip market matures

The global newly installed MOCVD volume will reach 239 units in 2014, while the government will continue to provide subsidies in parts of China, the MOCVD installation scale is expected to reach more than 170 units. LED manufacturers' expansion plans depend on the grants offered by local government, so large LED chip manufacturers will become increasingly powerful in the future, said Roger Chu.

With the increasingly fierce LED price competitions, manufacturers have to search for new special applications to improve profitability, such non-visible LED including UV or IR LED applications, which is gaining industry attention. Although, the market size of non-visible LED is small compared to LED lighting or backlighting applications, it requires close cooperation with system manufacturers, due to technical difficulties and customization requirements. Thus, the market has a higher entry threshold, and better gross margin than white LEDs. Currently, IR LED and UV LED fields are dominated by Japanese, American and European manufacturers. Taiwanese LED manufacturers also have a small share, and it is expected more LED manufacturers will enter the non-visible LED field future.

Figo Wang: Chinese lighting manufacturers witness positive developments from synergizing online and offline retail

China’s declining birth rate since the 1990s has gradually affected the supply of workers in the labor market in recent years. Moreover, three decades of economic growth has cultivated the Chinese market’s strong spending power, and transformed the country’s status in the world supply chain from a “global factory” into a “factory and market”. The two trends have caused annual increase in China's human costs and rental costs, making the cost advantage of E-commerce enterprises to be increasingly prominent in the competing market channels.

Reflected into the LED lighting industry, although traditional offline distribution channels play an important role in marketing, the lighting E-commerce market has soared. The offline advantages of traditional lighting brands boosted the rapid e-commerce performance. Traditional lighting companies trying out E-commerce models first emerged in 2013, and their performance was on par to new lighting E-commercial enterprises. In 2014, synergy effects from online and offline retail, and brand advantages of traditional lighting companies have become increasingly prominent. Coming to the fore, OPPLE, NVC, Philips, and Panasonic Lighting are the top five E-commerce suppliers in 2014, of which only AOZZO is a purely E-commerce enterprise.

Allen Yu: Chinese LED Packaging Market Growth Eases and Restructures Increase in 2015

The Chinese LED package market grew 19% YoY in 2014, lower than most people’s expectations. Lighting-use LED package was the main market growth momentum, and was almost the only application sector supporting industry growth. In terms of small-size backlight, despite smartphone sizes and rising market penetration, market demands have also grown. It was not enough to generate much impact on the overall packaging market, and so did the small pitch LED display market. For TV backlight and traditional displays, the market scale has started to shrink.

From the suppliers end, Chinese manufacturers’ market share accounted for 64%, +1% YoY; Taiwanese manufacturers share remain unchanged at 9%; international manufacturers dipped 1% YoY to 27%. In 2013, technology and patent advantages bursted out on the market, leading to international manufacturers escalated revenue growth in the Chinese market. However, the market reached a downturn in 2014 as growth eased. In 2014, international manufacturers' revenue grew 17% in Chinese packaging market, less than half of the 41% growth seen in 2013; Taiwanese manufacturers revenue performance was better than 2013 having reported 15% growth rates; Chinese manufacturers reported 21% revenue increase, higher than 16% in 2013.

Looking forward to 2015, LEDinside estimated Chinese package market will grow 15% and still be fairly competitive, especially in lighting packaging area where it is still difficult to improve. In the case that packaging manufacturers are actively expanding production, the industry restructure will increase.

Terri Wang: Chinese exporters usher in new business opportunities as Emerging markets become popular

With the development of the global LED lighting industry, Europe and other mature markets are nearly fully saturated, and it has been difficult for Chinese manufacturers to squeeze into the market. Chinese market is also moving towards intense competition, entering into an era of price wars, and economics of scale. At this time, emerging markets rich potentials is undoubtedly full of opportunities and challenges for Chinese manufacturers.

In the Russian market, LED lighting showed substantial increase, reaching USD 2.48 billion, and market penetration rate peaked to 32% in 2014. By 2016, LED lighting market is expected to reach USD 5.07 billion, with penetration rate climbing further up to 44%. Russia will become the fourth largest market, following Europe, U.S. and China. In Russia, large energy consumption, high energy-saving demands, favorable policies and tariffs, increasing commercial building lighting demands, world-class sports events, as well as the development of infrastructure projects, all will accelerate the penetration rate and market scale of LED lighting.

The Southeast Asian LED lighting market value including six major countries Thailand, Singapore, Malaysia, Vietnam, Indonesia and the Philippines reached about USD 11 billion, and market penetration rate reached 25% in 2014. It is expected that in the coming years, the expansion of China and ASEAN bilateral trade agreements, the tariff concessions, will promote closer trade between Southeast Asian countries and China. With government incentives and growing demands for lighting replacements, LED lighting penetration rate and import scale in Southeast Asia will continue to soar. Southeast Asia is becoming a new gold mine for Chinese LED lighting manufacturers.