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LED Chip Price raised in May because of Tight Supply in China

 Ecosram Time: 2014-4-29


As incandescent bulb was banned gradually, LED light is more and more widely used in daily life, also because of it’s nice price recently. Now LED chip is facing supply shortage. Upstream chip manufacturers or downstream package manufacturers are unable to adequately meet demands. In general, the industry estimates May revenue will be even better. As LED lighting market develops, China market insiders estimate the country’s LED market annual demand growth will surpass 30%, according to DZH News. LED chip production will increase to 10% during the first half of 2014, while supply and demand chain will tighten during the second half. 

The LED chip market infrastructure in China has undergone adjustments recently, according to a financial securities website. Starting in May, several areas in China will start raising LED chips price, which downstream package manufacturers have accepted. The supply shortage is estimated to intensify, which could lead to a price hike in all LED chips. 

LED chip supply shortage has escalated since March. Some Chinese package manufacturers have already been forced to purchase from second tier chip manufacturers. LED Chip manufacturers are also facing difficulties. Equipment upgrades by the top two MOCVD equipment makers, that hold nearly 90% market share, have led to higher price upticks. Manufacturers are now more cautious about expanding because of raised costs. Industry insiders from Ecosram LED Technology Limited estimate that tight LED chip supply could continue until the end of 2014. 

LED Chip supply shortage will raise the cost of whole led light, with fierce competition of the market,led light manufacturers will face bigger challenge to develop business in future.


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