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TrendForce Reports LED Package Prices Continue to Slide

12 May 2015 LED Roger Chu

The LED package prices continue to fall in the second quarter, according to the latest price report from LEDinside, a division of TrendForce. Compared with the prior quarter, the average LED price for the lighting application products has fallen by 1~9%, excluding the package specification 2835. Since the 2835 LED products are the mainstream in China’s lighting market, their average price decline has reached 10~17%, more severe than products of other package types. For the backlight LED package products, their average LED price has dropped by 3~6% during the second quarter. The price competition in the direct-type LED backlight market remains the fiercest this year versus markets for other types of LED packages. 

Roger Chu, research director at LEDinside, stated the second quarters of the past years were usually the peak season for the LED market, but for this year’s the demand growth has been considerably weaker. The main factor behind this is the volatile global economy, which in turn causes big exchange rate fluctuations in several regions. Currency depreciations in Europe, Japan, and the emerging markets have made imports of LED bulb and other electronic products more costly for the consumers. Consequently, demands are scaled back and LED manufacturers are now undercutting each other in order to maintain their capacity utilization rates. The price lowering has also meant that the manufacturers are shifting their strategies and focusing on the niche market, which covers automotive LED, UV, IR, flip-chip, CSP, and other highly profitable LED products. Aggressive expansion into the niche market will help boost the manufacturers’ margins. 

The quarterly price drop-off for products of the 0.5W 2835 LED have reached 17% because they are currently the main offerings of many Chinese LED manufacturers. Consequently, the price competition among the 2835 products is quite intense. Both the 1W 3030 LED products and the 1-5W high power LED (ceramic substrate) products have seen an average price decline of 9% in the second quarter. By contrast, price changes for the rest of the LED products have been relatively small. “Although the market gradually recovered after the Chinese New Year holidays,” said Chu, “the demands were not as robust as during the same period of last year, so LED manufacturers had to slash prices.” 

For the LED backlight market, its growth this year has been slower than the previous because the end market demand picked up much later and changes were made to China’s LED subsidy policy. LEDs for the direct-type TV application have experienced the greatest quote price decline in the second quarter, with packages 3030, 2835, 3535 and 3228 fallen to US$0.25~0.3/pc. The LED package price for mid-range and low-end TVs has dropped by nearly 6% quarterly. The 7020 package, which is the mainstream for the edge-type TV application, are priced around US$0.085~0.095/pc. The end market prices for edge-type TVs are higher due to the applications of advanced technologies and design concepts like high resolution, high color saturation, curved screen, and thin body. LED package price for the edge-type TV application in turn experienced lesser downward price pressure. 

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