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2019 China LED chip packaging industry trend analysis
- Dec 28, 2018 -

Overall, the phenomenon of oversupply in the industry is obvious. In the 2018, due to the global economic downturn and Sino-US trade friction, the LED market demand side growth rate is less than expected, and on the supply side, whether the chip or packaging industry, as a result of the 2017 expansion, resulting in a continuous release of 2018 annual production capacity.

Overall, the phenomenon of oversupply in the industry is obvious.

Market demand subdued, lighting export growth decline As the largest application of LED, the growth rate of LED lighting exports declined significantly in 2018. According to the China Lighting Electrical Appliance Association, 2018 years ago in the three quarter of China's total LED lighting exports of 23 billion U.S. dollars, only 2% growth, compared with the 2017 20% growth rate, the decline is obvious.

As the country's largest export province, Guangdong province in September LED lighting exports of 723 million U.S. dollars down 56%, China and the United States trade friction is expected to have a greater impact in the four quarter, so the total annual LED lighting exports do not rule out the possibility of negative growth.

Chip market size 17.1 billion, output growth rate is far less than capacity growth rate According to Ledinside statistics, China's led chip market reached 17.1 billion yuan in 2018, growing only 4% year-on-year, compared with 19% in 2017, the growth rate decreased significantly. Starting in the second half of 2017, the production capacity of manufacturers continued to release, as of the end of 2018, the mainland led chip manufacturers can reach 11.2 million tablets/month (equivalent to 2 inches), an increase of 31% year-on-year.

Production capacity growth rate is higher than demand growth, resulting in high inventory of manufacturers, chip prices continue to fall. China's local chip manufacturers, the total sales scale of 15.5 billion yuan in 2018, an increase of 4%.

Including the three-Ann, Huachan, Aussie Shunchang, including the first-line factory, revenue is still on a steady upward trend, while other small and medium-sized manufacturers, because the capacity has not increased, the decline in market prices led to a decline in revenue. Chip supply, the mainland's local manufacturers accounted for 81% in 2018, China's Taiwan manufacturers accounted for 18% of the market, Taiwan's imports of manufacturers mainly for crystal power. On the export side, the mainland chip export rate of 12% in 2018, including three Ann, Huachan and other mainland manufacturers, chips have been directly sold to Taiwan, South Korea and other markets.

However, as the mainland is the world's leading packaging base and international orders have gradually shifted to the mainland in recent years, total chip exports are expected to remain stable. Industry concentration, 2018 years ago, the top ten chip manufacturers accounted for 85%, compared to 2017 increased by 2%, the degree of industry concentration has steadily improved. Among them, three Ann Optoelectronics is still a single, the 2018 market share reached 32%. 

The top ten manufacturers are only one of the Taiwanese companies, and the rest are local manufacturers on the mainland.

Package Market size 69.7 billion, less than expected growth rate Packaging, according to Ledinside statistics, 2018 China's led packaging market size of 69.7 billion yuan, a 6% increase in the year. Starting in the second half of 2018, due to Sino-US trade friction, LED lighting exports will be greatly affected, and the impact is difficult to eliminate in the short term.

Therefore, 2019 market demand is still not optimistic, the mainland local market internal demand will be the main driving force for growth, including automotive led, high-end commercial photos, high-end backlight and display and other markets. From the product, lighting is still the largest application of LED, 2018 accounted for 49%, traditional display and traditional backlight market still occupies a large proportion, but the future growth scale is very limited, the new mini LED backlight or mini RGB in the future is expected to become a new growth driver, But the current level of market acceptance remains low. The car lighting market is the most noteworthy market in the next two or three years, the rise of domestic cars and new energy vehicles will form a new supply system, the original more closed car supply chain is expected to be broken.

It is an opportunity for new visitors to the market in Taiwan or the mainland. From the supply side, mainland manufacturers are still the main supply camp, 2018 city accounted for 70%, but the increase in the proportion is not obvious, the main reason for high-end car, high-end backlight and lighting market is still dominated by international manufacturers, 2018 international manufacturers in the mainland market revenue still maintain 4% growth.

Mainland local manufacturers 2018 years of revenue scale of 48.8 billion, an increase of 7% year-on-line, including Mullinson, guoxing, Hongli and poly fly and other first-tier large factories, revenue continued to maintain rapid growth. In terms of industry concentration, the market share of the top ten packaging manufacturers 2018 years ago was 50%, compared with the 2017 micro-increase. Mullinson continued to rank first with a 9% market share, followed by Japanese-Asian chemistry.

The top ten manufacturers also include Guoxing, Hongli and poly three mainland manufacturers.

2019 market environment is not optimistic, production capacity will continue to grow Under the environment of Sino-US trade friction, the total amount of LED related products affected reached 8 billion U.S. dollars. The second half of 2018 had already had an impact, with some international manufacturers showing a wait-and-see attitude and fewer orders actually implemented.

The future will not rule out the transfer of orders to Taiwan or Vietnam, India and other places. And on the supply side, capacity will continue to increase.

According to Ledinside statistics, the production capacity of LED chips is expected to increase by 1.4 million tablets per month (equivalent to 2 inches), the current manufacturer's inventory is already at a higher level, with the release of new capacity in 2019, chip market prices are expected to continue to fall. Overall, the growth rate of market demand in 2018 is far less than the growth rate of production capacity, the price falls, and the increase of enterprises does not

In the 2019, the demand side, affected by the global economic downturn and Sino-US trade frictions, was not optimistic; on the supply side, expansion projects continued to increase and overcapacity remained the problem. Over the past decade, China's led industry has achieved rapid growth, with markets such as lighting, backlighting and displays being the main drivers of the industry's progress, driven by demonstration projects such as the MOCVD subsidy policy and the "Ten Cities Million". After more than 10 years of rapid growth, these led traditional application industries have entered a mature period. Therefore, the LED industry needs to find the next led industry for ten years, to explore the future of high-speed growth possibilities of the application. such as Mini/micro led, automotive lighting, high-end health lighting and uv/ir led and other emerging applications, are worthy of market attention.

2019 market environment is not optimistic, production capacity will continue to grow Under the environment of Sino-US trade friction, the total amount of LED related products affected reached 8 billion U.S. dollars. The second half of 2018 had already had an impact, with some international manufacturers showing a wait-and-see attitude and fewer orders actually implemented.

The future will not rule out the transfer of orders to Taiwan or Vietnam, India and other places. And on the supply side, capacity will continue to increase.

According to Ledinside statistics, the production capacity of LED chips is expected to increase by 1.4 million tablets per month (equivalent to 2 inches), the current manufacturer's inventory is already at a higher level, with the release of new capacity in 2019, chip market prices are expected to continue to fall. Overall, the growth rate of market demand in 2018 is far less than the growth rate of production capacity, the price falls, and the increase of enterprises does not