3 August 2015

LED prices to stabilize in Q3, before falling again in Q4

After prices for LED chips and packaging services fell 10-17% in first-half 2015, prices are expected to be stable in third-quarter 2015 due to peak demand, but may fall again in fourth-quarter 2015 and first-quarter 2016 due to slow demand, according to Taiwan-based LED makers, reports Digitimes.

Prices in first-half 2015 were affected by a slowdown in the industry coupled with China-based LED makers unleashing new capacity. Manufacturers consequently competed for orders through lowered price quotes, which also affected profits of various LED makers. LED 2835 products saw average price declines of 10-17%, exceeding the 10% price decline for packaging.

Heading into third-quarter 2015, these trends will balance due to a heating up in the market, but the fourth quarter is likely to see a slowing down again, it is reckoned. Going into 2016, in order to save on costs, manufacturers aim to reduce packaging sizes and the number of LEDs used in various applications, most notably for 2835 products, in an effort to reduce the effects of the price decline.

For the LED backlighting market, growth in 2015 has been slower than expected because end-market demand picked up much later and changes were made to China's LED subsidy policy. LEDs for direct-type TV applications experienced the greatest price decline in the second quarter, with 3030, 2835, 3535 and 3228 package types falling to US$0.25-0.30/unit. LED package prices for mid-range and low-end TVs has dropped by nearly 6% each quarter. In particular, 7020 packages (mainstream for edge-type TV application) are priced at US$0.085-0.095/unit, according to a recent report from LEDinside.

Tags: LED market

Visit: www.digitimes.com