LED bulb prices hit bottom, Taiwan’s LED industry faces changes

Mainland companies are pressing harder, and Taiwan’s LED industry is facing changes: Data show that the global price of LED bulbs that replaced 40W and 60W incandescent lamps continued to fall slightly in September, and the supply and demand situation in the entire LED industry remains severe. In order to control costs and improve performance, mainland packaging companies have begun to use mainland-funded chips, and Taiwan-funded packaging leader Everlight also publicly confirmed the purchase of LED chips from mainland-funded companies at the end of September. Due to the relatively low threshold for LED lighting and the support of government subsidies for mainland chip companies, mainland-funded chips have obvious price advantages and can easily become the choice of Taiwanese companies. At present, the number of MOVCD in mainland China accounts for 47% of the global MOCVD. As production capacity is gradually released in the second half of the year, the price advantage becomes more and more obvious, and Taiwan's LED chip companies will face serious threats.

India’s LED lighting market is large, and mainland-owned enterprises are expected to win: Due to power shortages in India, the government has been implementing LED bulb stimulus policies. Data shows that the Indian LED lighting market is expected to grow at more than 32% from 2015 to 2020, and the market size is huge. From January to August 2015, China's exports of LED lighting products to India totaled US$355 million, a year-on-year growth of 76.61%. In the ranking of my country's export countries during the same period, it rose from 17th in 2014 to 7th, and has become an important source of revenue for local LED companies. Due to the low development level of India's national economy, cost will be the core consideration in India's lamp rotation plan. However, mainland-funded LED companies have obvious advantages in cost and are expected to take the lead in this round of competition.

The LED bulb price war has been going on for more than 4 months. The price has now dropped to the bottom, and the industry competition is fierce. In this context, resource integration within the industry (including horizontal integration and vertical integration) will be an inevitable trend, and companies with technology and scale advantages will be in a favorable position during integration.

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