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
ZESTRON Academy Launches 2024 Advanced Packaging & Power Electronics Webinar Series
05/01/2024 | ZESTRONZESTRON, the leading global provider of high-precision cleaning products, services, and training solutions in the electronics manufacturing and semiconductor industries, proudly announces the launch of its highly anticipated webinar series on Advanced Packaging & Power Electronics, a webinar series on the latest innovations, cleaning, and corrosion challenges.
The New Industry: Will the Growth Continue?
04/30/2024 | I-Connect007 Editorial TeamHow sustainable are the primary financial models in the United States regarding PCB fabrication shops? In this interview with economic experts Shawn DuBravac and Tom Kastner, we explore what’s happening with U.S. printed circuit board shops in today’s market, how consolidation affects the industry, and what can be done.
TTM’s High Tech Expansion and Industry Innovation
04/30/2024 | Marcy LaRont, PCB007 MagazineTom Edman has been the CEO of TTM Technologies since 2014 and has an extensive background in electronics and manufacturing. TTM is a leading global manufacturer of technology solutions, including mission systems, RF component and RF microwave microelectronics assemblies, and quick turn and advanced technology printed circuit boards.
U.S. Companies Invest Heavily in Robots
04/30/2024 | IFRManufacturing companies in the United States have invested heavily in more automation: total installations of industrial robots rose by 12% and reached 44,303 units in 2023. Number one adopter is the car industry followed by the electrical and electronics sector.
USPAE to Springboard U.S. Technology Forward
04/30/2024 | Marcy LaRont, PCB007 MagazineThe U.S. Partnership for Assured Electronics (USPAE) was launched as a nonprofit subsidiary of IPC in 2020, specifically to manage the DoD relationship and access to funding, and to develop a cooperative facility to develop UHDI capabilities in the U.S., not only for the defense sector, but for the whole of the U.S. electronics industry. It is a tall order, but industry veteran Joe O'Neil believes it will happen. Having been tasked with making the UHDI Capable Cooperative Production Facility (UCCPF) a reality, he provides an update on this important project for U.S. electronics manufacturing.