With demand recovering, the LED packaging market size in mainland China increased by 5% year-on-year in 2016

Affected by the global economic environment, the overall performance of mainland China's LED industry in 2015 was quite sluggish. The latest "2016 China LED Chip and Packaging Industry Market" report from LEDinside (China LED Online) points out that the size of the LED packaging market in mainland China in 2015 was US$8.8 billion, a year-on-year growth of only 2%.

LEDinside analyst Yu Bin said that in 2016, the demand for lighting manufacturers to replenish inventory increased, which led to an increase in the utilization rate of LED chip manufacturers and the market showed signs of recovery. Upstream LED chip prices have stopped falling, and only a few manufacturers have increased LED chip prices. Therefore, LED packaging prices will remain stable in the short term. However, as the LED industry enters a mature stage and due to technological improvements, the market size of some application areas such as the backlight market has begun to shrink. LEDinside estimates that the LED packaging market size in mainland China will be US$9.3 billion in 2016, a year-on-year increase of 5%.

LED for lighting applications was the main growth driver of the packaging market in mainland China in 2015. However, affected by the economic downturn in Europe and the United States, market demand was not as expected. Yu Bin pointed out that in 2015In 2014, the total export volume of LED lighting products in mainland China was US$16.4 billion, a year-on-year increase of 16%. Compared with 60% in 2014, the growth rate has slowed down significantly.

In the field of LED backlight, due to technological improvements, the number of LEDs required per unit area has decreased, causing the LED backlight market in mainland China to shrink. In addition, in the field of display screens, although small-pitch displays are still showing a growth trend, due to their small scale, their ability to promote the market is limited.

The market share of LED packaging manufacturers in mainland China has increased, and international LED manufacturers have turned to differentiation strategies

In 2015, LED lighting manufacturers continued to be under the pressure of price cuts, forcing packaging manufacturers to also respond to price cuts, resulting in revenue compression. International LED packaging manufacturers' revenue in mainland China fell by 10% year-on-year, which was the most serious impact. Mainland China's LED packaging manufacturers benefited from mainland China's lighting customers and successfully penetrated emerging markets such as Southeast Asia and India, and their revenue rose against the trend, with a year-on-year growth rate of 7%. Taiwanese manufacturers performed steadily, with a year-on-year decline of only 1%. Yu Bin said that international and Taiwanese LED manufacturersBusinesses’ marketing strategies in mainland China have shifted to product or market differentiation to avoid head-on market conflicts with mainland Chinese LED manufacturers.