The LED industry is like a big cake, bright and shiny, and everyone wants a piece of the pie. The rush has created cruel competition among the best, causing many companies to suffer. How to break away from the fierce vortex of price wars and carve out a bloody path in the Red Sea market will take time.
The demand for LED lighting has entered high growth. It is estimated that after the shipment volume of LED lighting doubled in 2014, the overall shipment volume is expected to continue to double again in 2015. However, due to fierce market price competition, the LED industry believes that if the LED lighting output value is estimated, the growth rate in 2015 will reach about 30%. In other words, the product price will fall by about 35%.
Observing the development of LED in recent years, the industry changes so fast that it is often difficult for the industry itself to grasp it. I vaguely remember that after the industry just shouted out beautiful visions such as "an industry without dark clouds in ten years" and "three years of golden period", it didn't take long for "dark clouds", "cold winter", "dark period" and even "tragic business" to follow one after another. Orders often come and go at the drop of a hat.
Faced with the unpredictable market conditions, Korean factory Samsung has gradually faded away, while mainland China has strong financial support and continues to expand production. Taiwanese factories are like a squeezed sandwich, with patented pot lids from Japanese and European and American manufacturers on top, and low-priced orders from mainland China on the bottom. How Taiwanese factories break through, including mergers and acquisitions, alliances, and transformations, each has its own unique tricks, but it still takes a period of hard work and tempering.
Asian LED manufacturers have the most resources in Japan. Nichia, Toyoda Gosei, etc. have patents and technical capabilities, and have a high share in Japan, Europe and high-end application markets. However, Japanese manufacturers also have problems. For example, the mainland market rarely uses Japanese chips unless specifically specified by customers.
In addition, the advantages of Japanese manufacturers in the high-end market have also begun to change. The LED backlight chips used in Apple's iPhones used to be dominated by Nichia. This year, there are rumors that three manufacturers will enter the iPhone 6 market, among which Taiwanese manufacturer Epistar was once named. Industry insiders said that this is in line with Apple's decentralized supplier strategy and reflects the challenges faced by Japanese factories. The changing situation has also created an increase in cooperation space between Taiwan and Japan.
According to research firm LEDinside, the global lighting market will reach US $82.1 billion in 2015, of which the LED lighting market will reach US $25.7 billion, with a market penetration rate of 31%. Europe is still the largest region with 23% of the market, followed by mainland China with about 21% of the market, while the US market accounts for 19% of the market, which is the top three LED lighting regional markets in the world.
Although the European region has not seen large-scale subsidy policies, its high electricity prices and differences in light culture have increased the demand for LEDs in the commercial lighting and outdoor building lighting markets.
As a global lighting product manufacturing center, coupled with cost advantages and a complete supply chain, the market competition is also more intense than other markets. Regardless of brand manufacturers, foundry manufacturers, or emerging lighting manufacturers and packaging manufacturers, in addition to greatly increasing the penetration rate of LED lighting, the development of sales channels is also a major development project in the future.
The fierce price war in recent years has made led manufacturers' production capacity and output expand rapidly, but the output value has not increased significantly, and even it can only remain stable. The profit performance is even more volatile with the fluctuation of industrial supply and demand conditions. In order not to be thrown out of the market by the vortex, the industry can only follow the bargaining to increase the market share.
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