Price war is raging, how do LED companies choose?

LEDs are selling at cabbage prices, do you dare to buy them? The rise of mainland’s LED supply chain, igniting a price war? LED prices continue to fall, prompting rapid transformation in the consumer sector?

LED products are at a bargain price, you get what you pay for

Has LED become a bargain? It does not seem to be the case. The prices of mid-to-high-end LED brand products at home and abroad are still high. This article selects three products from low-end brand A and mid-range brand B to analyze their production costs. The objective figures illustrate that there is no unreasonable "cabbage price".

It is worth mentioning that there is a certain gap between domestic LED products and foreign countries. For example, people in the industry have a lot of feelings at foreign lighting exhibitions. When Chinese companies put their products on the stage and bargain with foreign businessmen, like selling cabbage, foreigners hold parties in the exhibition hall, tasting wine and negotiating business under various mood-designed lights. This scene is somewhat embarrassing.

It is true that the product prices of many companies have gradually moved closer to the "baby price", but the author believes that no matter how low the current LED products are, "you get what you pay for" is still the unchanging truth. Consumers need to be reminded that they should be careful when buying and not be completely greedy for cheap.

Is the rise of mainland’s LED supply chain the source of price wars?

From the data, since 2011, the rise of mainland LED supply chain has been noticed by the industry. From Taiwanese businessmen’s active vertical integration strategy, Taiwanese LED chips being forced into a “corner”, to the current “5 times salary poaching, and Taiwanese factory talent loss”, the rapid rise of the mainland’s LED supply chain in the past five years is eye-catching.

As we all know, mainland LED companies win market share at low prices. Is this the real source of the domestic price war? At present, the price of domestic LED lights has generally dropped by 30%, while in comparison, the price of international LED lights has dropped by only 0.4%-0.8%. In addition to the industry-recognized decline in material prices and technological progress as the source of declining domestic product prices, is the rise of mainland LED companies that regard "low prices" as the key to winning market competition the key to bringing down LED prices?

Falling prices and application expansion have contributed to the increase in the share of consumer products

LED has begun a "replacement wave" for nearly two years. However, judging from the market replacement rate, the replacement scope has been limited to commercial, engineering and other fields. High prices and narrow application fields have prevented a qualitative improvement in the consumer field.

Although it has outstanding performance in terms of quality and stability, the price has always remained high. Fields such as commercial photography and engineering are not very sensitive to price, which has accelerated the popularity of LED, but also excluded consumer groups such as families. In recent years, LED prices have continued to decline, gradually approaching the acceptance range of ordinary consumers, further accelerating the popularity of LED applications in the consumer field.

On the other hand, the light characteristics of LED also ensure that it can be used in more fields. With the development of technology, more "down-to-earth" fields such as wearables, mobile phones, and televisions have been applied, and the scope of consumer applications has been further released. I believe that with the continuous development of intelligent products, I believe that the application of LED will become more imaginative.