With China’s energy efficiency subsidy coming to a close, demand for LED backlight at the end of 2Q and beginning of 3Q slowed. The upcoming National Day holiday orders also had effect on 3Q LED backlight delivery performance. China is expected to promote another energy subsidy that will be stricter towards efficiency performance in the near future, with the possibility of drastically raising the EEI (Energy Efficiency Index) from 1.7 and 1.9. LED manufacturers have also aggressively begun placement strategies for high efficiency direct lit TVs.

The end of the energy efficiency subsidy also had an effect on LED manufacturer’s forthcoming orders. The predicted time for the new energy efficiency subsidy falls right before National Day holidays and will include stricter regulations towards energy efficiency. LED manufactures have thus begun to aggressively develop more energy efficient direct lit LED TVs to give themselves a competitive edge on the market before the holidays begin.    

 According to the demands of the new energy subsidy, a TV with dimensions of 19-31 inches must have an EEI of 1.7 and 1.9. A TV with EEI of 1.7 receives a subsidy of RMB 100. TVs with the same dimensions but 1.9 EEI will receive RMB 150 in subsidy. Bigger TVs with a dimension of 32-42 inches with an EEI of 1.7 will get RMB 250 in subsidy, while similar sizes TVs with an EEI of 1.9 will get RMB 300. Similarly, TVs 42 inches in size with EEI of 1.7 will receive RMB 350 and EEI 1.92 TVs will get RMB 400.

Industry insiders predict that the new subsidy policy will be launched before National Day holidays. It has become common knowledge to manufacturers that household energy efficiency performance needs are higher. The next energy subsidy will increase EEI numbers higher than the current 1.7 and 1.9. In order to accommodate the rising EEI, LED manufacturers have actively been developing more energy saving direct lit LED TVs.