Scale of Chinese LED Package Market to Expand by 5% Annually in 2016
June 16, 2016 | TrendForceEstimated reading time: 2 minutes
The scale of China’s LED package industry grew just 2% annually to US$8.8 billion in 2015, according to the 2016 Chinese LED Chip and Package Industry Report by LEDinside, a division of TrendForce. The weak performance of the Chinese LED industry last year was mainly attributed to the global economic slowdown.
LEDinside analyst Allen Yu said the market is showing some signs of rebound this year as branded lighting vendors have been restocking their inventories, thereby generating demand and boosting the capacity utilization of LED chip suppliers. Only a few chip suppliers have raised prices, but their efforts are enough to stop the general downtrend in the chip market. Consequently, package prices will also remain stable in the short term. As the industry enters its maturation phase, technological advances have lowered LED usage volumes for some applications and caused these markets to contract. LEDinside projects the scale of the Chinese LED package industry to grow 5% annually in 2016 to US$9.3 billion.
The main growth driver for the Chinese package industry last year was the lighting sector. However, lighting’s contribution to demand growth was smaller than anticipated due to the weak U.S. and European economies. Yu pointed out that the Chinese exports of LED lighting products slowed down dramatically from the annual growth rate of 60% in 2014 to 16% in 2015, when they reached US$16.4 billion in value.
The scale of China’s LED backlight market has contracted as technological improvements continue to reduce LED usage volume. As for the Chinese LED display market, demand is growing for the fine-pitch LED display application, but this market is still too small to make a significant contribution to the overall demand.
As Chinese package suppliers increase their market shares, foreign competitors adopt strategies to differentiate themselves
LED package suppliers saw their revenues being squeezed last year as LED lighting vendors, who were under immense competitive pressure, compelled them to cut prices as well. China was the weakest region for foreign suppliers as their revenues from that market fell by 10% on average in 2015. Chinese suppliers, by contrast, posted annual revenue growth of 7% on average for the same year. Chinese package companies increased their revenues against the market headwinds because they benefitted from the successes of their compatriot LED lighting vendors in Southeast Asia, India and other emerging markets. Yu expects non-Chinese package suppliers to differentiate their products and develop new market segments as to avoid head-on price competition against the Chinese suppliers.
Suggested Items
The New Chapter: Attracting ‘Generation Green’
03/28/2024 | Hannah Grace & Paige Fiet -- Column: The New ChapterIn the electronics industry, we talk a lot about sustainability in terms of recruitment and retention of the next generation of engineers. But what if the key to sustaining the industry long into the future is through the more common definition of the word? What if, for just a moment, we think about sustainability in terms of the environment and what we as an industry are doing to care for it? Because, if you weren’t aware, Gen Z cares tremendously about the environment and the actions companies are taking to preserve it. Without Gen Z joining the electronics industry’s workforce, we won’t be able to sustain the industry for much longer.
Accenture Invests in Sanctuary AI to Bring AI-Powered, Humanoid Robotics to Work Alongside Humans
03/27/2024 | BUSINESS WIREAccenture has made a strategic investment, through Accenture Ventures, in Sanctuary AI, a developer of humanoid general-purpose robots that are powered by AI and can perform a wide variety of work tasks quickly, safely and effectively.
Don Dennison Appointed to Roll Out KIC’s Latest Thermal Analysis System Software in the Northeast
03/26/2024 | KICKIC, a renowned pioneer in thermal process and temperature measurement solutions for electronics manufacturing, is pleased to announce the appointment of PIT Equipment Services, LLC, led by Don Dennison, as its representative for New York, New Jersey, and Eastern Pennsylvania.
iNEMI/IPC White Paper on Complex Integrated Systems Highlights Future Technology and Manufacturing Ecosystem Needs
03/25/2024 | IPCToday’s system solutions combine more varied functionality, such as digital, analog, optical, micro-mechanical, etc., packed into smaller form factors. As a result, electronics manufacturing has to deliver increasingly complex integration of diverse technologies with system designs that blur the distinction between chip, package, board, and assembly.
Seeking Employment: Meet Gary Turner
03/25/2024 | Barry Matties, I-Connect007Meet Gary Turner, a recent graduate from the University of Texas at Dallas with a bachelor’s degree in mechanical engineering and a master’s in material science and engineering. He is currently seeking employment in the industry. The following interview will allow you to learn about Gary and see if he might be a good candidate for a position you are looking to fill.