Known as a new generation of energy saving luminaries, prices for LEDs are 6-10 times that of their equally luminous counterparts, rare earth phosphor lamps. However, LEDs have much higher energy efficacy which can increase price/performance ratio for high power consuming public places. With soaring inflation and rapidly dropping prices, rare earth phosphor lamp quotas are plummeting. Investors have slowly begun to lose faith in rare earth and as a result orders have decline dramatically.

Council member of the Shanghai Illuminating Engineering Society Wuhong pointed out that rare earth phosphor lamps are only at an operational rate of 40-50 percent and that abruptions in production is a normal occurrence. These hard times however have given LED a rare opportunity for cultivation. It is reported that several manufacturers have turned their production away from rare earth phosphor lamps towards LEDs, such as Yankon Lighting which has raised LED production from 10 percent last year to 28 percent this year. Wohong expressed that before 2011 industry insiders predicted that LED luminaries would replace rare earth lamps within 10 years, but it seems it will happened sooner than expected.

The rare earth luminescent material market slump has provided LED with a golden opportunity. Even though both are energy saving luminescent materials, the situation between rare earth phosphor lamps and LED are as different as night and day with the LED market flourishing while rare earth market withers. According to information gathered at the Ganzhou Rare Earth International Forum, sales volume for rare earth luminescent material in 2012 was 4,500 tons, a yearly decrease of 43.8 percent. LED third generation energy saving luminaries on the other hand had a surge in sales volume close to 34 percent.