One of the main LED industry indicators to look into in 2014 is manufacturers exponentially growing production volume. Where did this production capacity come from? Production capacity seen in 2014 mostly came from 2Q13 LED package expansions. A cloud of doom crept over the industry in 2012, as the industry’s oversupply situation triggered price wars and bankruptcy tsunami. Yet, in 2Q13 severe LED package shortages emerged as the slumping lighting market abruptly boomed. Many LED package manufacturers shared an optimistic market outlook at the time, some even doubled production capacity in a relatively short period.

Chinese LED manufacturers scaled up production again, according to a Liberty Times report. German MOCVD manufacturer Aixtron announced it received 50 MOCVD orders from major Chinese LED chip maker San’an Opto. The new equipment will be shipped and installed by fourth quarter 2014. The rebounding LED industry will be impacted if San’an Opto continues to expand production capacity.

Recent studies by different research organizations in China show lighting manufacturers’ orders are on the rise as industry moves closer to peak season in March. Chip manufacturers, however, remain indecisive about expanding production. LED chip supply and demand will be more optimistic compared to last year.  

Epistar Chairman Dr. B.J. Lee remained conservative about LED industry’s 4Q13 performance prospects, during an interview at LEDforum Taipei 2013. Lee was the second opening remarks speaker at the two day event in Evergreen International Convention Center organized by LEDinside, a LED research subsidiary of Trendforce.