Industry experts predict new trends in the LED industry in 2015

A new year is here. What new changes and new development trends will the LED industry face in 2015? You might as well listen to the opinions of industry experts.

Wang Fei: Online and offline synergies are fermenting, and four of the top five traditional lighting brand e-commerce companies

China’s declining birth rate since the 1990s has gradually affected the supply of the labor market in recent years, and for as long as 3 0 years of economic growth has cultivated strong consumption power for the Chinese market. China's role in the global supply chain has changed from a simple factory to a factory + market. These two major trends have led to China's labor costs and rental costs rising year by year, making the cost advantage of e-commerce gradually prominent in the competition of consumer channels.

Reflecting on the LED lighting industry, although traditional offline channels also play an important role, the lighting e-commerce market is booming rapidly. The offline advantages of traditional lighting brands have driven the rapid explosion of e-commerce performance. In 2013, traditional lighting companies that experimented with e-commerce emerged, and their performance was comparable to that of emerging lighting e-commerce companies. By 2014, the brand advantages and synergy effects of traditional lighting companies gradually became more prominent, and they stood out one after another. Opple, NVC, Philips, Aldo, and Panasonic Lighting ranked among the top five lighting e-commerce companies in 2014. Among them, only Aldo is a pure e-commerce company.

Yu Bin: The growth rate of China's LED packaging market slowed down in 2015, and the shuffling speed intensified

In 2014, the scale of China's LED packaging market reached a year-on-year growth of 19%, which did not meet most people's expectations. From the perspective of various application fields, the main driving force for the growth of the lighting LED packaging market is almost the only driving force; in the small-size backlight field, although the market demand has increased as the penetration rate of smartphones has increased and the size has increased, it is not enough to have a big impact on the entire packaging market. The same is true for the small-pitch display LED market; while in the TV backlight and traditional display fields, the market size has shrunk.

From the perspective of the supply camp, Chinese domestic manufacturers accounted for 64% of the market, a year-on-year increase of 1 percentage point; Taiwanese manufacturers accounted for 9%, remaining unchanged; international manufacturers accounted for 27%, a year-on-year decrease of 1 percentage point. The lighting market exploded suddenly in 2013. International manufacturers relied on their technological and patent advantages to show rapid growth in revenue in the Chinese market. However, the growth rate tended to moderate in 2014. In 2014, the revenue growth rate of international manufacturers in China's packaging market was 17%, which was significantly lower than the 41% in 2013; the growth rate of Taiwanese manufacturers' revenue in China's packaging market was 15%, which was better than that in 2013; the growth rate of local Chinese manufacturers was 21%, higher than the 16% in 2013.

Looking forward to 2015, LEDinside predicts that China's packaging market will grow by 15%. Competition in the packaging industry is still fierce, especially in the field of lighting packaging, and corporate profitability is still difficult to improve. With major packaging manufacturers actively expanding production, industry reshuffle will intensify.

Chu Yuchao: The LED chip market structure has been set, and growth opportunities lie in the new blue ocean of special applications

In 2014, the number of newly installed MOCVD machines worldwide will reach 239 units. In 2015, due to the continued subsidy measures introduced by some local governments in China, the installed capacity will still maintain an installed capacity of more than 170 units. Chu Yuchao said that LED manufacturers’ production expansion plans depend on local government subsidies, so in the future LED chip manufacturers will be the largest in Evergrande.

Due to the fierce competition in LED prices, manufacturers are actively looking for new special applications that can increase profits; for example, invisible light LEDs, which are gradually attracting attention, include UV or IR LED applications. Although the market size of invisible light LEDs is limited and cannot be compared with applications such as LED lighting or backlighting, technical difficulties and customization requirements require close cooperation with system manufacturers, making the barrier to entry high. The gross profit margin of the products is significantly better than that of white LEDs. At present, the UV LED and IR LED fields in the supply chain are mainly dominated by Japanese, European and American manufacturers, and Taiwanese LED manufacturers also have a place. It is expected that more and more LED manufacturers will begin to enter the invisible light field in the future.

Wang Ting: Emerging markets are taking over the trend of LED lighting replacement, and Chinese export companies are ushering in new business opportunities

With the development of the global LED lighting industry, mature markets such as Europe and the United States have become fragmented, making it increasingly difficult for Chinese manufacturers to share the pie; and competition in China's local market is also becoming fiercer, entering an era of scale and price. At this time, emerging markets, as fertile ground that has not yet been fully developed, are undoubtedly a treasure trove full of opportunities and challenges for Chinese manufacturers.

Taking the Russian market as an example, LED lighting showed substantial growth in 2014, reaching US$2.48 billion, with a penetration rate of about 32%. By 2016, the LED lighting market size is estimated to reach 5.07 billion US dollars, and the penetration rate will reach about 44%. Russia will become the fourth largest market after Europe, the United States and China. Russia's large energy consumption, high demand for energy conservation, favorable policies and tariffs, coupled with the growth in lighting demand for commercial buildings, the hosting of international sports events, and the development of infrastructure projects, will all serve to accelerate the increase in the scale and penetration of LED lighting.

In the Southeast Asian market, based on the six major countries of Thailand, Singapore, Malaysia, Vietnam, Indonesia and the Philippines, the scale of LED lighting in 2014 was approximately US$1.1 billion, and the LED penetration rate reached 25%. It is expected that in the next few years, the expansion of bilateral trade agreements between China and ASEAN and preferential tariffs will promote closer trade between Southeast Asian countries and China. With policy incentives and the growth of replacement demand, the penetration rate and import scale of LED lighting in Southeast Asia will continue to increase rapidly, and Southeast Asia is gradually becoming a new gold-mining ground for Chinese LED lighting manufacturers.