The LED industry is facing supply shortage. From upstream chip manufacturers to downstream package manufacturers are unable to adequately meet demands. In general, the industry, however, estimates May revenue will be even better. As the LED lighting market advances, China market insiders estimate the country’s LED market annual demand growth will surpass 30 percent, according to DZH News. LED chip production will increase to 10 percent during the first half of 2014, while supply and demand will tighten during the second half. 

The LED chip market infrastructure in China has undergone adjustments recently, according to a financial securities website. Starting in May, several areas in China will start raising LED chips prices, which downstream package manufacturers have accepted. The supply shortage is estimated to intensify, which could lead to a price hike in all LED chips. 

LED chip supply shortage has escalated since March. Some Chinese package manufacturers have already been forced to purchase from second tier chip manufacturers. LED Chip manufacturers are also facing difficulties. Equipment upgrades by the top two MOCVD equipment makers, that hold nearly 90 percent market share, have led to higher price upticks. Manufacturers are now more cautious about expanding because of raised costs. Industry insiders estimate that tight LED chip supply could continue until the end of 2014.