After a period of low-price operation, the domestic LED industry chain has seen a "partnership" price increase. In May, the price of LED chips increased; since then, the price of LED packaging has begun to increase; and the downstream LED display screen is also preparing to increase in price. Data shows that the overall increase in LED prices is about 10%. According to surveys by relevant departments, the current demand for small-pitch display screens is strong, which is also the main reason for recent price increases by various LED manufacturers.
A few days ago, chip manufacturer Sanan Optoelectronics and major display packaging supplier Cinda Optoelectronics announced price increases of 10% and 5%. The average number of LEDs used per square meter of indoor LED displays will gradually increase from 60,000 in 2015 to 270,000 in the next two years, which means that the use of upstream LED packages and chips will increase by more than three times while the demand area remains unchanged.
Since 2012, small-pitch LED displays 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.
The consumption of small-pitch LEDs will reach 29 billion pellets in 2016. As packaging materials in mainland China gradually develop towards localization, costs will further decline and promote market development. In 2021, the consumption of small-pitch LEDs will reach 189.8 billion pellets, with an annual compound growth rate as high as 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 displays. As surface-mounted LEDs suitable for outdoor use gradually overcome technical problems such as moisture resistance and UV protection, the trend of high-definition and high-density outdoor displays is also gradually emerging. The average pitch has progressed from P10 to below P6, and is expected to experience explosive growth. Data shows 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%.
Others in the industry said that the increase in LED chip and packaging prices since this year is essentially related to the booming display market. The rapidly growing demand in the display market is transmitted to the display packaging and chip side, and this tight supply also spills over to lighting chips. The difference between display chips and lighting chips is that the epitaxial process is different, but there is competition in production in both epitaxial equipment and chip production equipment. When the display market is good, chip manufacturers will transfer part of their production capacity to display chip production, which leads to a tight supply of lighting chips.
The popularity of small-pitch LEDs also reflects the increasing demands of consumers for LED displays. Consumer demands have also shifted from "high light efficiency" to "high quality." This also requires chip and packaging companies to invest more funds in the development and production of high-performance LED products. In addition to raising the prices of various industrial chains to a certain extent, this is also expected to pull the LED industry out of the "price war" quagmire in recent years and move from a price war to a quality war.
ANNA