The LED packaging industry’s value is anticipated to only rise an estimated 3.2% on-year in 2015, from this year's US$14.6 billion to US$15 billion, according to the latest “Global LED package Industry Report” released by LEDinside, a division of Taiwan based market intelligence firm TrendForce. “With growth in the LED package market slowing and competitive pressure coming from China, the LED industry will face some major challenges next year,” said Roger Chu, research director at LEDinside. 

Increased demands from the LED and mobile device application market have spurred sapphire manufacturers to expand sapphire ingot, sapphire wafer, and PSS production, according to the recent 2014 Global Sapphire Substrate Market Report from LEDinside, the green energy research division of TrendForce. 

Increased demands from the LED and backlight application market have spurred sapphire manufacturers to expand sapphire ingot, sapphire wafer, and PSS production, according to the recent 2014 Global Sapphire Substrate Market Report from LEDinside, a division of research organization Trendforce. 

China LED packaging market scale reached US $7.2 billion in 2013, according to the latest China LED package market report from LEDinside, a division of research organization Trendforce. China become a prime market for global LED packaging manufacturers, who are speeding up efforts to acquire bigger market share. Leading Chinese manufacturers are also maintain fast development rates, increasing restructure pace is also scaling up industry concentration in the country. Chinese manufacturers’ actions have impacted Taiwanese manufacturers’ Chinese market share, which slid to 9% as a result. Raising product competitiveness has become an urgent matter for manufacturers.

LEDinside analyst Figo Wang, who has over a decade of experience in the Chinese LED industry, gives a thorough analysis of San’an Opto’s production capacity strategy in this article, and asks whether using this production capacity expansion plan as a threat is successfully deterring competitors.

In 2013 the LED chips total revenues of mainland Chinese companies(which mainly based on mainland investment, similarly hereinafter) reached 992 M USD, with a year-on-year growth of 17%, and is expected to reach 1182 M USD in 2014.

Global market research firm TrendForce's Green Energy Division LEDinside said that, with the decrease in LED price and the gradual improvement in LED efficacy, the cost recovery period has been shortened remarkably, greatly improving the intention of commercial and public departments worldwide to replace lights, formally launching the global replacement tide with LED lamps, and retrofit lamps like bulb and tube are most welcomed by market. LEDinside estimates that the global demand for LED bulb and LED tube will increase by 86% and 89% in 2014 respectively o...

Global market research firm TrendForce's Green Energy Division LEDinside said that, in 2013 Chinese LED packaging market value increased far quicker than the global average. LED lighting is still the largest application field of 2013 Chinese LED packaging market, accounting for 42%. Due to the rapid growth of Chinese LED commercial lighting market demand, Chinese lighting-use LED manufacturers such as MLS Lighting, Honglitronic, CF Lighting got continuously outstanding performance. High-quality indigenous chips greatly improved the competitive position for Chinese LED lighting-use LED packaging industry. According to LEDinside, indigenous chips has accounted for almost 80% in the 2013 Chinese chip market.

Global LED lighting market penetration rate is quickly rising with market value expected to reach US$ 17.8 billion by 2014, according to the latest silver report by LEDinside, a subsidiary of global research institute TrendForce. Compared to 2013, the overall LED light product shipment volume will grow 68% YoY to 1.32 billion units in 2014.

Korean manufacturers are still planning to increase direct-type LED TV shipment volumes, according to LEDinside, a research subsidiary of global research institute TrendForce. In addition, as Chinese Lunar New Year approaches in January, most LED manufacturers are working hard to release higher Price/Performance (P/P) products in 2014. In face of fierce competition and conventionally low season in 2014, companies are developing new flip chip LED and EMC package technologies to increase their competitiveness.

In 1H13, listed Chinese LED manufacturers’ total revenue increased at a Year Over Year (YOY) rate of 24.26% to US$ 629.62 million, while LED chip manufacturers’ revenue reached US$ 274.01 million. LED package manufacturers listed on the Chinese bourse also saw their revenue increase to US$ 355.61 million. Although, chip prices plunged in 1H13, overall sales increased at a YOY rate of 15.42%, companies have implemented low pricing strategies as manufacturers expanded production capacity. Taking into consideration factors including the timing of the production capacity expansion and chip performance, there were huge differences in chip manufacturers’ revenues. Affected by the LED lighting market demand, China’s major chip manufacturers’ production utilization rate reached a historical high, with San’an Optoelectronics and Elec-tech International (ETI) utilization rates at 87% and 59% respectively. Package manufacturers, especially in backlight field had the highest profits as they benefited from unexpected volume increases for lighting applications during 1H13 and an increasingly domestic backlight module supply chain.

According to LEDinside, a research division of TrendForce, in July 2013, the total revenues of LED companies listed on Taiwan’s stock market reached NT$ 10.95 billion (US$ 366 million), with a Year on Year (YOY) increase of 24.9% and a Month-Over-Month (MOM) growth of 4.24%. Listed Taiwanese LED chip manufacturers revenues peaked NT$ 3.85 billion in the same month, while listed LED package manufacturers saw revenues climb to NT$ 7.09 billion. Despite effects from slowed backlight demands, end-market demands have attracted LED manufacturers to quickly expand into lighting applications.

In 2013, LED package industry in China still grows very fast. Take Refond, a representative company of medium-large size LED package manufacture, for example, their revenue in the first half of 2013 meet RMB 294 millions, 67% higher on a year-on-year basis. The LED revenue for meidun-large sized backlight application went to RMB 135 millions with a 113% growth on a year-on-year basis; at the same time, their LED revenue from new small-sized backlight LED also jumped over 10 millions. Beside of this, Shenzhen Jufei Optoelectronics co., Ltd., another representative Chinese small-sized backlight LED package manufacturer’s net profit improved 25%-55% on a year-on-year basis as well. LEDinside, a green energy branch of international market investigating institute TrendFoce said that as Chinese manufacturers’ package technology keep improving, it is obvious that LED package for backlight in China is going ready emerge.

The total revenue of Taiwanese listed LED manufacturers plunged to NTD 10.6 billion in June 2013, as the LED market was affected by declining demand for backlight application and stocktaking, according to LEDinside, a research subsidiary of industry research organization TrendForce. Revenue of listed LED chip manufacturers reached NTD 3.97 billion, while LED package manufacturers revenue grew to NTD6.63 billion.

China’s LED lighting market will reach RMB 32.4 billion (US$5.24 billion) in 2013, at a year-on-year growth rate of 36 percent, according to LEDInside’s latest Chinese LED Lighting report. LEDInside is a research division under global market research organization, TrendForce. The report highlighted the home market growth of 96 percent, placing it just one place behind the top ranking commercial market. Traditional lighting manufacturers, such as NVC Lighting Technology (NVC), Opple Lighting (Opple), PAK Corporation (PAK) and Foshan Electrical Lighting (Foshan) have all switched to LED lighting, while Taiwanese and Chinese LED assembly companies including Everlight, Edison Opto (Edison), MIS Lighting (MIS), Shenzhen Changfang Lighting (Changfang) are more proactive in utilizing advantages in LED manufacturing to grasp a share of China’s LED lighting market.

As indicated by market research organization TrendForce’s research division LEDinside, LED market demand was benefited from inventory demand and lighting market order demand. In May, 2013, Taiwanese listed LED manufacturers’ total sales revenue increased to NTD10.96 billion (+6.8%MoM，+23.8%YoY). Meanwhile, Taiwanese listed LED chip manufacturers’ total sales revenue reached NTD4.44 billion (+6.7%MoM，+10.9%YoY). Moreover, that of Taiwanese listed LED package manufacturers also increased to NTD6.52 billions (+6.9%MoM，+34.4%YoY).

[LED Lighting Market Development Trend- Commercial Lighting Market Trend] Because commercial lighting often serves a long operation time, in addition to the high brightness requirement, energy-saving requests have also been significant. Since the efficiency of LED lighting products have continued to increase, LED lighting demands brought by the replacement with LED light source will also increase. LEDinside expect that by 2015, the global LED commercial lighting market value will be up to 16,818 million USD.

LED Lighting Market Development Trend- Commercial Lighting Market Trend Because commercial lighting often serves a long operation time, in addition to the high brightness requirement, energy-saving requests have also been significant. Since the efficiency of LED lighting products have continued to increase, LED lighting demands brought by the replacement with LED light source will also increase. LEDinside expect that by 2015, the global LED commercial lighting market value will be up to 16,818 million USD.

LEDinside, a research division of Trendforce indicated that benefiting from the advance stocking of the backlight supply chain, listed Taiwanese LED manufacturers achieved a total revenue of 9.39 billion NTD in March of 2012 (+35.1%MoM，+19.5%YoY). In March of 2013, listed Taiwanese LED chip manufacturers achieved a revenue of 3.77 billion NTD (+38%MoM，+15.4%YoY), while listed Taiwanese LED package manufacturers achieved a revenue of 5.62 billion NTD (+33.2%MoM，+22.4%YoY). According to LEDinside,It is clear that due to stocking in the backlight market has broughtand numerous commercial lighting orders,; according to LEDinside, demands are expected to extend to 2Q132 and enhance growth momentum in the LED market.

  Lighting: [Worldwide LED Lighting Market Value Reach 2,478 Million USD in 2013] LED outdoor lighting is being popularized worldwide from 2013 to 2015, especially in the Asian Countries like China, Japan and Taiwan. Driven by the policies, the global LED outdoor lighting market value growth rate is expected to exceed 46%.Besides, street light replacement projects will also be popularized in other emerging markets such as Thailand, Russia, Latin America and Africa starting from 2014. Till 2015, LED street light penetration rate is expected to slow down, and the worldwide LED street light installation volume will stay around 10 million per year.    The worldwide LED outdoor lighting market showed a strong growth in 2012. The new street light installation volume in China accounts for 30% in the global market, with governmental subsidy still being the major driving force. Especially under the situation of weak export sales, more and more companies start to focus on domestic public lighting projects in China. Due to fierce competition, the street lighting price further reduced in 2012, and companies with scale advantage can have more shipment, however, new manufacturers still keep to enter the market. LEDinside estimated that the new LED outdoor lighting installation volume in China reached 900,000 sets in 2012, and as the governmental subsidy projects start installation, the total installation volume in China will reach 1.21 million in 2013, among which the installation volume in Guangdong Province itself will exceed 300,000, becoming the fastest LED outdoor lighting growth momentum. 

According to LEDinside, the LED research division of TrendForce, the total revenue of Taiwanese listed LED manufacturers in January 2013 is 8,220 million NTD (+21.5%MoM, +39.9%YoY). LEDinside indicated that in addition to the fourth quarter of 2012 (traditional off season), the TV manufacturers’ delay in stocking will also cause difficulties in the fourth quarter revenue of LED manufacturers.

According to LEDinside, the LED research division of TrendForce, Taiwanese listed LED manufacturers posted a total revenue of NT$6,917 million (MoM-14.8%, YoY+5.1%) as of December, 2012. As the fourth quarter is the traditional offseason, and branded TV vendors delayed the replenishment of their stocks, LED manufacturers’ fourth-quarter revenue was put to the test. Affected by the offseason effect in the LED backlight market, many Taiwanese LED manufacturers started to set eyes on the LED bidding market such as bulbs and street lights. However, in the face of keen competition in the market, most vendors have aggressively reduced their prices to win the bid, further dampening Taiwanese LED manufacturers’ profitability.

According to LEDinside, the LED research division of TrendForce, global LED production value is expected to hit US$12.4 billion in 2013, representing a 12% YoY growth. Handset application and LED lighting product demand are expected to be the key sales driver to spur corresponding LED demand. Yet, given that the oversupply issue will not be eased in near term, every LED manufacturers will aggressively deploy into new applications and consolidate with peers in order to secure sales and enhance profitability.

Manufacturers Form Alliances within the Industry as LED Market Becomes Over-Competitive Thanks to the replenishment demand from brand vendor in 3Q12, the production value for October has shown a respective performance compared to the same period of last year. According to LEDinside, a research division of TrendForce, total revenues for listed LED companies in Taiwan amount to approximately $NT 9.27 billion, a 16.8% growth YoY. With oversupply remaining an issue within the LED industry, many vendors have turned to strategic alliances and share exchanges for the sake of long term development. In the future, the role played by LED manufacturers is likely to expand beyond simply providing chips and components. Many are expected to begin making end products.

According to LEDinside, the LED research division of TrendForce, listed Taiwanese LED firms’ revenues in August totaled NT$9.49 billion, a 2.64% MoM increase and a 7.6% YoY increase. LED Backlight Market Demand in China Surging Benefiting from the increasing demand from China’s October 1 holiday, certain LED manufacturers have been receiving more backlight orders. The demand growth in the Chinese market is attributed to China’s subsidy policy for energy-saving products enacted since June 1, which caused the demand for new TV mod...

According to LEDinside, the LED research division of TrendForce, revenues of listed Taiwanese LED firms totaled NT$8.95 billion (MoM+1.68%, YoY+2.4%) in July 2012. According to LEDinside research, TV annual shipment for 2012 will see a mere 5% YoY growth, whereas monitor shipment will suffer a downturn. Notebook demand for 3Q12 is expected to be weak, but new products releases in Mid-3Q12 will pick up the demand and make the annual shipment stay flat compared to that in 2011. As for smartphones, annual shipment forecast revised from 660 million units to 606...

According to LEDinside, the LED research division of TrendForce, the June revenues of Taiwanese listed LED manufacturers totaled NT$8.8 billion (MoM+1.12%, YoY-5.6%). Benefiting from the climbing demand for consumer electronic appliances and the traditional lighting peak season, the LED industry’s 2Q12 revenue reached NT$25.82 billion (QoQ+22.7%). Looking towards the second half of 2012, the LED industry will face a severe challenge – affected by the lukewarm economic outlook and the European debt crisis, the future for end market does not seem b...

According to LEDinside, the LED research division of TrendForce, European LED lighting market’s compound annual growth rate will hit 38% in the next five years, becoming another mature LED market besides Japan. In particular, the architectural lighting and commercial lighting markets are less price-sensitive, so they have higher acceptance of LED lighting, and therefore, LED’s penetration rate sees faster growth in both markets. According to LEDinside’s “2011-2015 European LED Lighting Market Report (2012 Version),” the global...

According to LEDinside, the LED research division of TrendForce, the March revenues of Taiwanese listed LED manufacturers totaled NT$8.109 billion (MoM+17.72%, YoY-12.2%). Due to the inventory stocking in the backlight market and the impending peak season of the commercial lighting market, the orders are expected to pour in well into May. The 1Q12 revenues of Taiwanese LED companies amounted to NT$21.05 billion (-2.5%QoQ, -14.9%YoY). The TV demand triggered by the May Day Holiday will help shed light on the market acceptance of the new TVs. Reven...

The energy shortage raises energy-saving awareness around the world, and with the effort of the major companies, LED lighting once again takes over the spotlight in 2012. According to LEDinside, the LED research division of TrendForce, Europe has become one of the most fast-growing LED markets in the world besides Japan. Benefiting from the ban imposed by certain countries against selling incandescent light bulb of high wattage in 2012, the value of European LED lighting market will soar to US$3.01 billion in 2012, a 44% YoY growth; the value is expected to reach U...