The domino effect highlights the accelerated integration of the LED industry

In the past year, due to insufficient external demand, weak domestic demand, and the industry entering a mature stage, manufacturers have poured into the civilian market. Lighting product prices continue to fall, and competition is in full swing. Export products pay more attention to design, but high cost performance is still the mainstream trend in the development of applied products.

As the profits of lighting products in the circulation field become increasingly thin and market integration accelerates, the LED lighting landscape has undergone tremendous changes. Giants such as Philips and Osram continue to adjust their market strategies and actively deploy high-margin market segments such as smart lighting and automotive lighting. Domestic LED manufacturers are also actively increasing their market share with cost-effective products.

The prices of T8 lamp tubes and bulbs hit record lows

As alternative lighting, T8 lamp tubes play an important role in light source lighting companies, and their prices remain high. However, at the beginning of this year, LED T8 lamps from big brands such as Philips and Osram experienced a triple jump from more than 90 yuan to more than 50 yuan and then to less than 20 yuan.

Led by international brands, domestic first-tier brands have once again launched an LED T8 price competition. In April and May, Opple released rumors that it would launch 1.2M LED T8 lamps priced at 9.9 yuan for hardware channels. In mid-May, Foshan Lighting issued a price adjustment notice. The price of 1.2M LED T8 glass tubes was adjusted from 13.5 yuan to 9.98 yuan. On June 5, Mulinsen lowered the market purchase price from 12.5 yuan to 8.5 yuan. It is reported that Huaqiang Benbang's T8 lamps are planned to be shipped at a price of 6.8 yuan...

Obviously, domestic 1.2-meter LED T8 lamps have entered the 10-yuan era, and companies have fallen into a stage of "falling prices in exchange for rising volumes" to maintain operating income growth. Today, the overall price of T8 lamps in the LED lighting industry has declined. In the future, market competition will become more intense and prices may continue to fall. Because, on the one hand, the production technology and scale of upstream companies are gradually increasing, and the supply chain is gradually maturing; on the other hand, leading companies are trying to "baptize" the market and achieve market standardization. This has intensified the market competition atmosphere.

At the same time, the price competition for LED bulbs is also quite fierce. On April 22, Philips launched a three-month promotional model "Philips LED A19" in the North American market to celebrate Earth Day. Two LED bulbs cost $4.97 and can replace 60W incandescent lamps. The output brightness is 800 lumens, the bulb power is 8.5W, and the service life is up to 10 years. This price reduction is mainly to clear inventory, and will then return to the price of $5 per pill.

Led by Philips, GE also launched the GE Bright Stik LED, which not only has a "super popular" appearance, but is also ultra-low-priced. A pack of three costs only $10, or only $3.33 each. However, GE said it currently does not plan to sell them individually.

Compared with 2012, the price of LED bulbs that replace 60W incandescent lamps has been halved. However, the $5 era is also a recognized sweet spot in the industry, which will detonate the household market penetration rate, and manufacturers are expected to accelerate the recovery of construction costs.

On May 27, CREE announced that it would reduce the price of its BR30 LED 9W floodlight that replaces 75W, from the original $20 to $15. The new second-generation bulb will only cost $10, and the 5000 K. bulb version will only cost $11. More price competitive than Philips SlimStyle BR30 LED.

According to a survey on the retail price of LED bulbs, in China, due to promotional activities in May, the price of LED bulbs that replaced traditional 40W incandescent lamps dropped by 6.5%. For example, the price of OPPLE 5W bulbs dropped to US$2.86, a drop of more than 40%. In recent March, April and May, the price of light bulbs has continued to decline, with decreases of 6.8%, 2.1% and 1% respectively.

The domino effect is highlighted and integration is accelerating

In order to prevent Asian manufacturers from entering the market, the North American market launched Energy Star specifications in 2011 to set high entry barriers. With the termination of Energy Star subsidies, major international manufacturers have successively launched low-priced versions of LED bulbs in addition to mid-to-high-end versions to gain more lighting market share.

For a time, major brands followed suit, and price competition of end products became the focus. From the perspective of the industry chain, chip and packaging prices continue to maintain a steady downward trend.

In the chip field, a pattern of two powerful companies, Sanan and Epistar, has been formed. Lin Yida, associate manager of Jingyuan Optoelectronics Marketing Center, said that chip prices fell by 7%-8% in the first half of 2015, and the price reduction for the whole year is estimated to be 20%-25%. He emphasized that price reduction is not the most important thing this year, but increasing market share is Epistar Optoelectronics' most important goal.

TrendForce’s latest quotation shows that LED packaging quotations continued to decline in the second quarter. The average packaging quotation of the lighting part, excluding 2835, fell within the range of 1~9%. Because LED 2835 is a mainstream product in the lighting market in mainland China, the decline has reached 10% to 17%, far exceeding other lighting packaging products. In addition, the prices of 1W 3030 and 1-5W ceramic substrate high-power LED products also dropped by 9%, while the prices of other products showed relatively small changes.