LED Manufacturers will Uplift the Technology Entry Level and Find New Applications in Hopes to Raise Profitability in 2015

For many LED manufacturers, 2014 has been a challenging year. A lot of manufacturers' performance in first and second half of the year was very polarized. Lighting market demands were stronger than expected in the first half of 2014, leading to a period of LED supply shortages, said Roger Chu, Research Director of LEDinside, a research division of TrendForce. Despite the positive development, the industry was impacted by clients double booking and distributors rising inventory levels during second half of the year. Many manufacturers were impacted by the markets cooling demands, and price competition as a result. Worth noting, the emergence of Chinese LED manufacturers led to sliding LED product prices. Hence, LED manufacturers will raise technology entry levels and find new applications in hopes to raise profitability in 2015.

LEDinside estimates globally 239 new MOCVDs were installed in 2014. Some local governments will continue to issue subsidies in China throughout 2015, therefore, more than 170 MOCVDs are expected to be newly installed in China. Overall, LED manufacturers expansion projects depends on local governments subsidies, hence LED chip manufacturers will grow.

As Chinese LED chip manufacturers improve their technology and scale up production capacity, China's LED chip production capacity has increased from 27% in 2013 to 36% in 2014. In the past, Chinese LED backlight and lighting applications largely relied on Taiwanese or international LED manufacturers, but this is no longer the case. Due to Chinese package manufacturers increasing usage of domestic LED chips, prices are increasingly competitive, leading to Chinese manufacturers growing market share in the global LED industry.

Spurred by falling product prices, high LED lighting market demands have emerged. LED bulbs remain the main growth drivers for LED lighting products in 2015, including LED bulbs, tubes and other light source products, said Chu. Therefore, LEDs retail price and costs are often the main factors taken into consideration.

Standard and mid-power LEDs with good C/P ratio often meet these LED lighting products lower price demands, for instance 3030 and 2835 LEDs have become mainstream on the market. Future LED manufacturers will continue to find better heat dissipation material, and use high driving currents to reduce the number of LEDs. Even COB LED has gradually attracted attention from lighting manufacturers. Besides lower LED prices, LED lighting manufacturers have also turned their focus to drivers and other components, in hopes of designing total solutions to lower costs.