Reduced Chip Costs 2011 LED Lights Have Lower Prices

In 2011, the industry generally released the doubts that the global LED epitaxial chip production competition in 2010, especially China, may cause oversupply in the market this year.

Recently, South Korea’s Samsung LED Co., Ltd. announced the launch of five new types of high- and mid-power LED products with output power exceeding and below 1W, which officially entered the LED lighting market. Based on the decline in the price of LED luminaires and their popularity, Samsung and many LED application vendors in China have stepped into the LED lighting market. As early as 2010, Japan's first-line makers such as Toshiba and Panasonic led the Japanese government to cut prices of LED bulbs and set off a price war.

The upstream MOCVD machine platform will have five-fold increase in 2011, which will inevitably lead to 15 times capacity expansion. The backlight source is the best release for this year's expansion capacity. If the backlight growth this year is as expected, LED prices may hold. On the contrary, after June, with the excess capacity of the upstream chip, the overall LED manufacturing cost will drop by 30%. At present, the LED industry generally estimates that the penetration rate of global LED lighting is about 3% compared with that of 2010, and LED lighting penetration rate is expected to reach 6~10% in 2011. At present, they have felt that there are pressures on inventory of several major international chip giants that have long-term cooperation with them. For LED lighting manufacturers, the decline in LED prices is a positive effect, which can make their products more acceptable to users, and they also use light efficiency to reduce costs and gain market profits. In the trend of reducing chip costs in 2011, the price of LED light bulbs will continue to decline. Large-size LCD backlights and LED lighting are expected to become the twin engines for promotion.