TrendForce: The lighting market has recovered significantly, and the full-year LED chip output value will reach US$2.9 billion.

Global LED terminal demand will decline significantly in 2022, and markets such as LED lighting and LED displays will continue to be sluggish, resulting in reduced capacity utilization in the upstream LED chip industry, oversupply in the market, and continued price declines. According to research by TrendForce, the decline in both volume and price will cause the global LED chip market output value to decrease by 23% annually in 2022, to only US$2.78 billion. With the recovery of the LED industry in 2023, the demand for LED lighting has recovered most significantly, which is expected to further drive the output value of LED chips back to growth, estimated to reach US$2.92 billion.

LED commercial lighting is the application that is recovering the fastest in the overall LED lighting market. From the supply side, the LED lighting industry has entered a trough period since 2018, leading to the withdrawal of some small and medium-sized players. Other traditional lighting supply chain players have also transformed into display and other high-margin markets, resulting in reduced supply and low inventory levels.

Therefore, some LED manufacturers have recently adopted price increase measures. The main price increase items are concentrated in lighting LED chips. Low-power lighting chip items with an area of less than 300 mils (mil2) (inclusive) have the most price increases, with an increase of about 3~5%; for special sizes, the increase can reach up to 10%. According to a TrendForce survey, LED supply chain companies generally have a strong willingness to increase prices. In addition to the number of companies that want to increase prices, some LED chip companies are fully loaded with orders, and the items to be increased are also expanding to reduce losses and proactively reduce low-margin orders.

TrendForce Consulting analyzes that the world’s major suppliers of LED lighting chips are concentrated in China. In recent years, with the industry’s The situation has intensified, and some international players have been forced to withdraw from the LED lighting chip market. Chinese LED chip players have also reduced the proportion of their lighting chip business. Most of the suppliers that remain in the market have been suffering from long-term losses in their LED lighting chip business. The low-power lighting chips in the Chinese market took the lead in price increases this time. In the short term, this is a measure taken by the industry to improve profitability; in the long term, by adjusting the supply and demand balance and increasing industry concentration, the industry will gradually return to normal.