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© eskymaks dreamstime.com Analysis | June 18, 2013

Medium-power LED lighting remains unstable

Medium-power LED lighting remains unstable, declines by only 1%; TV backlight declines by approximately 2~4% due to China’s policies.
According to LEDinside, a research division of TrendForce, the Q2 supply for medium-power LED for lighting applications remains unstable. While the current market demand still came from warm white LED, the shortage situation won’t be eased until July. Hence, the price of medium-power LED for lighting application has declined by 1~3% in this quarter and that of high-power LED has declined by 3% as well.

With backlight applications being impacted by the lack of strong demand and the Chinese government’s subsidy on TV market has been ended, TV manufacturers are conservative about the 3Q13 stock, and are less willing to place long term purchase orders. Overall, the prices of LEDs for backlight applications showed a slight decrease, which are below 5%.

Whether low-price tablets and Chinese TV subsidy policy can continue may impact the growth momentum for 3Q13 backlight market

Although HTC, LG, and Motorola announced to let go of the tablet market, the tablet product owns higher gross margins--which are relatively larger than those of the other 3C products--have managed to attract manufacturers in mobile, PC, TV, and system areas. These include: Lenovo, HP, Acer, and Google, all of which have released their own tablets. All together with whitebox mobile market, the worldwide tablet shipment in 2013 is forecasted to reach 200 million units. In addition, The highest and lowest prices of LED for tablet applications were USD0.06 and USD0.033, respectively, which declined by 4%.

The price of LED for TV application has started to slow down in this quarter. The average price of single chip 7020 was around USD0.103, a 2% decline. In addition, the average price of double chip 7020 for premium TV model was USD0.17, with this quarter’s highest market price dropping down to USD0.2. After stocking for China’s May Day holiday, the average price of 7030 package used mostly in edge-lid TV was USD0.165, which declined by 2% this quarter.

Medium-power LED’s tightened supply situation hasn’t changed, 2Q13 medium-power LED price declined by only 1%

In terms of lighting applications, medium-power LED’s C/P ratio is better than others. Thus, 5630 package is mostly introduced in LED bulbs or tubes. Since Samsung upgraded their product and made adjustments in production lines, it caused the tightened supply situation for 5630 in china, which limited the price decline for medium-power 5630 LED to only 1%. As for high power LED, although its market demand has started to increase, the price is still steadily decreasing because each manufacturer is continuing to release new product specifications. The high power LED price declined by approximately 3% in this quarter.

LEDinside Viewpoint:

Backlight Market: Although China’s LED package technology and chip specifications lag behind from those of Korea-based and Taiwan-based package manufacturers, China TV brand manufacturers adopt market segment marketing strategies, such as direct-type LED TV adopted domestic package in those areas with low request for specifications and patents. After Chinese package manufacturers enter the TV supply chain, it will cause more serious oversupply situation for China’s TV backlight market.

Lighting Market: As the supply for medium-power 5630 LED is still unstable in June, there seems no noticeable reduction on market price. But many big LED manufacturers are planning to release new high power LED products, thus there might be another price reduction in 3Q13 to boost the market.

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