According to price surveys by LEDinside, a research division of TrendForce, affected by dwindling Q1 inventory and Q2 rush orders, LED package price for the backlight application quotes has eased in Q2, with a decline of approximately 3%. On the LED lighting market, 5630 packages were pulled from use in backlight applications, to be used in lighting instead. The sudden volume increase resulted in price slashing for this quarter’s low to mid power LED packages, with an average decrease of around 10%.
Q1’12 LED Price Review
Due to relatively high Q4’11 inventory levels and weak market demand, LED backlight price fell by an average of 7-8% in Q1’12. In the lighting market, there were too many different types of LED packages, ranging in power from 0.06W to 3W. In addition, mid power LED for the backlight and lighting market consistently decreased, in order to increase market share. Q1 LED package price for the lighting market fell by around 8%.
Q2'12 LED Price Forecast
Currently, Q1 inventory has been consumed, current stock levels are not excessive, and capacity utilization rate for LED chip package production is generally over 70%. Some makers have even increased capacity to over 90%, and order visibility extends to Q3'12. LEDinside indicates, LED package price for the backlight application did not decline by much in Q2. With rush backlighting orders, and increasing brightness, and insufficient inventory, there was not much reason to cut prices. On the lighting market, with 5630 packages withdrawn from backlighting applications for use in lighting applications, the sudden increase in volume has resulted in price slashing for low to mid-power lighting packages, with an average decrease of around 10% this quarter.
Smartphone and Tablet PC Backlight Brightness to Reach 8 lm
As resolution increases for small and mid-sized panels and panel penetration rate decreases, brighter LEDs must be used, and more of them. LEDinside estimates backlight LEDs used in smartphones and tablet PCs will increase by 30-50% in 2012. Products such as sideview 0.6t LED package can be used in both smartphones and tablet PCs, and has a brightness of 8 lm.
Arrival of Direct-Lit LED TVs to Speed Up Elimination of CCFL TVs
Korean brand vendor introduced direct-lit LED TVs in April 2012, aiming to replace CCFL back-lit LCD displays. Thus far, the new displays have seen impressive sales in China and North America – sales for certain screen sizes were twice that of edge-lit LED TV. Although CCFL products were still competitive in Q2’12, by the end of the year there will be no price difference between CCFL and direct-lit LED TVs. LEDinside predicts that direct-lit LED TV will completely replace CCFL TVs by 2013.
In 2012, there are two LED TVs– edge-lit and direct-lit. Edge-lit LED TV uses 7030 LED package, which just recently replaced 5630 LED package. To achieve the same specifications, 30% fewer 7030 LED package are needed. LED package spec for direct type LED TV are led by Samsung, who uses 3228 LED package, while other makers use 3528 LED package. Compared to 5630 LED package, 50-70% fewer LEDs are required in direct type LED.
LED Suppliers Introduce Low and Medium Power LED, Lower Prices to Take a Large Market Share
High-power LED is preferred by international LED makers in terms of both price and technology, but as product price is not affordable enough for everyday consumers, suppliers have been unable to increase the amount of high-power products – the sector is limited to the high-end market and contract orders. LEDinside indicates, with low to medium power LED package specifications at 0.2-0.5W, they are more advantageous than high-power products when used in LED lamps such as T5, T8 or panel lights, in terms of both manufacturing cost and optical design. Thus, suppliers like Nichia with its 3014 0.2W and 3030 0.6W packages and Samsung with its 2323 0.2W package, are aggressively pushing low to medium power LEDs in hopes of taking a larger piece of the market.
Perspective From LEDinside
After the devastating market in Q1’12, LED price bottomed out in Q2 and demand began to recover. As suppliers are restoring capacity and channel vendors are restocking, LEDinside believes Q2’12 LED market demand is relatively strong.
However, LEDinside emphasizes that suppliers will be conservative with CAPEX, choosing to modify equipment rather than purchase new machines. Currently, the most important goal in the LED industry is to integrate capacity or form strategic alliances in the supply chain to achieve cost competitiveness.