More than a Third of Chinese Manufacturers to Exit LED Market as Early as 2019

Despite China’s blooming LED industry, many LED manufacturers will be eliminated from the market, according to a report by Yicai.com.

China’s LED industry is entering a high growth phase with market value expected to reach RMB 1 trillion (US $160 billion) in the next five years, but up to 30 percent of manufacturers are expected to shut down during the same period, said Pan Wenbo, Director Guangzhou Guangya Messe Frankfurt during Guangzhou International Lighting Exhibition 2014.

There are nearly 10,000 LED manufacturers in China, industry restructures are expected to take place in the next five to eight years, said Pan. He estimated as much as 30 percent to 50 percent of companies will exit the market, and China’s LED industry will become increasingly concentrated. Only top manufacturers will survive in the market, and LED manufacturers with revenues up to RMB 10 billion are expected to emerge, he added.

LED lighting still has plenty room for growth with current lighting market penetration rates at only 20 percent to 30 percent, analyzed Pan. In the next five years, LED market penetration rates are expected to reach 80 percent and replace conventional lighting market. China’s LED lighting combined upstream and downstream market value is expected to reach RMB 420 billion to RMB 450 billion in 2014.

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