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LED industry supply and demand relationship improvement 2017 chip will be in short supply
- Jan 11, 2018 -

Improved supply and demand relations

Before 2016, led chip manufacturers have expanded their business, resulting in excess capacity, the price continued to fall rapidly, making the LED industry drastic changes. Many poor management of small enterprises due to technical backwardness and other reasons, have cut production or transformation, a large number of LED enterprises to withdraw from the market, at the same time, the state of MOCVD equipment subsidies to reduce the lack of funds of small enterprises unable to expand production. Overseas LED chip manufacturers have also seen a sharp decline in profits, product gross margin is lower.


However, since 2016, with the steady increase in demand, led industry, the relationship between supply and demand has gradually improved, the recent product-intensive price events. Industry insiders to China Securities newspaper reporter said, not only is the LED chip in the price, screen, etc. are also rising. Previous manufacturers to demand forecasts are too conservative, resulting in inadequate capacity preparation, at the same time, the rapid expansion of intelligent products, chip screens and other products demand increased dramatically. The superposition of these factors makes the contradiction between supply and demand intensified.

Three-an photoelectric price increase on the one hand is the cost of reasons; On the other hand, with the withdrawal of small and medium-sized manufacturers, led chip industry mainly concentrated in the hands of several large manufacturers, the seller position more powerful.

Concentration promotion

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Experts said that the LED industry after a deep shuffle, supply side reform is more adequate.

From the upstream of the LED, the concentration of the increase to accelerate the formation of higher industry barriers to curb disorderly capacity expansion, and downstream application of innovation to drive the development of industrial chain. From the current situation, LED lighting accelerated infiltration, LED lighting intelligent, networked to promote small spacing display market accelerated the outbreak of a new round led industry to increase the main driving force.

It is estimated that by the end of 2017, led chip effective capacity of about 83.28 million pieces, demand about 92.35 million pieces. Among them, the demand for 47.04 million pieces of lighting chips, an increase of 20%, outdoor full-color display screen demand 26.02 million, the growth of 5%, indoor small spacing demand 1.02 million, year-on-year growth of 50%, mobile phone backlight demand 1.39 million tablets, Tablet PC backlight demand 440,000, computer and TV backlight demand 6.99 million pieces, Car lamps demand 1.06 million pieces.

Industry insiders believe that led chip capacity is still lower than demand. Given the steady growth in demand in 2017, led chips will be in short supply.

Three photoelectric as a chip link leading, is the only company engaged in full color LED chip production enterprises. Company actively expand production capacity, to 2017 end of the year is expected to have 400 units MOCVD equipment. Philips, Seoul Semiconductor, LG, Samsung, Cree and other overseas led giants have been basically discontinued, new demand outsourcing to three, the company's overseas customer orders are expected to further upgrade.

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