Prices of LED chips and packages are rising, driven by strong demand for small spacing

According to the survey, China’s largest chip manufacturer Sanan Optoelectronics and the main display screen packaging supplier Cinda Optoelectronics announced price increases of 10% and 5%. The average number of LEDs used per square meter of indoor LED display screens will gradually increase from 60,000 in 2015 to 270,000 in the next 2 years, which means that the use of upstream LED packages and chips will increase by more than 3 times while the demand area remains unchanged.

Since Leyard launched the related concept in 2012, small-pitch LED display screens have entered the market growth stage, and the market size is expanding rapidly. Strong downstream demand and room for technological advancement will drive the rapid growth of small-pitch packaging and chip consumption.

It is estimated that the consumption of small-pitch LEDs will reach 29 billion pellets in 2016. As China's packaging materials gradually develop toward localization, costs will further decline and promote market development. In 2021, consumption of small-pitch LEDs will reach 189.8 billion pellets, with an annual compound growth rate of up to 46%. The output value is also expected to grow from US$300 million in 2016 to US$800 million in 2021, with an annual compound growth rate of up to 21%.

In addition, the trend of small-pitch packaging has also begun to appear in outdoor display screens. As surface-mounted LEDs suitable for outdoor use gradually overcome technical problems such as moisture resistance and UV protection, the trend of high-resolution and high-density outdoor display screens has gradually emerged. The average pitch has progressed from P10 to P6 or less, and is expected to experience explosive growth. It is estimated that the number of outdoor LEDs consumed will grow from 93.6 billion units in 2015 to 286.4 billion units in 2021, with a compound annual growth rate of 20%.