LED Bulb Promotions Triggered Falling Prices in Europe and U.S. in January, Said LEDinside

LEDinside, a division of TrendForce, reports that both the 40W-equivalent (equiv.) and 60W-equiv. LED light bulbs suffered decline in their global average retail prices in January. The price of the 40W-equiv. dropped 3.3% from December to US$10.3, while the price of the 60W-equiv. ended up at US$14.1, amounting to a 2.5% monthly decline.

LEDinside analyst Allen Yu said that U.S. and European lighting vendors maintained their promotional pricing through the turn of the year in order to boost sales, so some products in those markets experienced significant price declines. In China, prices of LED light bulbs fell at a slower pace in January compared with the sharp drops in November and December of last year. Prices of most products have stabilized as many local lighting vendors are shutting down earlier for the Chinese New Year holidays. In Asia’s other regional markets, prices will remain in a downtrend.

The LED package market in China is also seeing a slowdown in trading as the country prepares for the upcoming holiday season. Some LED packages experienced sharper price drops in January.

Lack of trading activities ahead of the Chinese New Year holidays hurt prices of some LED packages

The LED industry has undergone a modest recovery since the fourth quarter of 2015. In the January of this year, however, many package companies in China decided to close before the official start of the Chinese New Year holidays. Trading therefore dropped considerably during the month, and there was marked decline in prices for some packages. Set against December of last year, international LED manufacturers such as Samsung, Seoul Semiconductor (SSC) and LG lowered their prices for 5630 LED products by an average of 4.9% in January. Besides, major manufacturers cut the prices of their 0.5W 2825 LED products by about US$0.012, amounting to a monthly drop of 3.4%. As for 0.2W 2835 LED products, their prices were near the cost price level after seeing sharp decline in 2015. Their prices therefore remained stable during January.

Yu said the Chinese LED package industry is still having excess capacity. Furthermore, technological advances will result in LEDs producing greater brightness from the same chip surface area. Hence, prices are expected to keep falling in the Chinese package market during 2016.

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