Some of Taiwan-based LED chip manufacturers have extended to LED packaging, offering solutions that EMS players can directly turn into lighting products, according to industry sources.

The manufacturers are expanding their business to carter to fast growing demand for LED lighting, rapidly falling price in the face of price competition from China-based competitors. The manufacturers use so-called next-generation technology to roll out packaged LED chips, adding that such a trend may impact packaging houses.

The next-generation technology may help decrease overall packaging cost, but the heat dissipation is still a problem need to be solved, according to Jason Wu, chairman for LED packaging house Edison Opto. In addition, the technology is merely applicable to small-size low-power LED lighting products or some types of LED light bulb, Wu said. PLCC (plastic leaded chip carrier) is still the mainstream packaging technology for use in small-size LED lighting products in terms of performance-cost ratio, he added.

Faced with competition from chip manufacturers' extension to packaging, Taiwan-based LED packaging houses have to consider all types of LED lighting application and offer customized total solutions for clients to reduce production cost and facilitate automated production of LED lighting products, Wu said.

There is large demand for LED devices from China-based energy-saving lamp manufacturers, such as Foshan Lighting and Xiamen Topstar, Wu said. This is because they ship 10 billion such lamps a year and their adoption of LEDs as lighting sources is increasing as ex-factory prices for LED lighting products have dropped to 2.5-3 times those for conventional lamps, Wu indicated.

A 4-foot LED lighting tube, for example, is made of 96 0.2W LED devices, Wu noted. It is quite easy for China-based lamp manufacturers to enter the LED lighting market based on their existing highly automated production equipment and retail channels, Wu said.