LEDinside: Slowing Demands Pushes LED Light Bulbs and Component Prices Down in August

The global average price of 40W replacement LED light bulbs fell 1.5% in August to US$10.9, while the 60W replacement LED light bulbs fell 2.3% to US$14.9, based on the latest report by LEDinside, a division of TrendForce. The U.S. was again the regional market that had the biggest decline in LED light bulb prices after July as product vendors including CREE and Philips are using package promotion deals and low prices to drive up sales volume and capture market shares, according to LEDinside analyst Allen Yu,. Furthermore, Chinese LED and chip manufacturers have been gradually expanding their capacities, pushing down component prices during this period of slowing demand. The competition in the LED market on the whole has therefore become more heated.

Component prices have kept falling in face of weak market demand 

Yu pointed that capacity expansion efforts by many Chinese companies in the upstream have led to a general supply glut, making price decline inevitable. HC Semitek, for instance, is raising MOCVD capacity of its Souzhou plant, while Changelight’s blue and green LEDs have entered mass production at its Xiamen operation. Nationstar is also steadily increasing its chip capacity. Consequently, prices of 0.2W 2825 LED products fell in August with a decline of 1.36% on average. Prices for 0.5~1W 3030 products also fell with decline reaching 2.15%. In general, Chinese and foreign first-tier package suppliers – Lumileds, Seoul Semiconductor, OSRAM, Honglitronic and Refond – have all marked down their prices.

U.S. led global price decline in the replacement LED light bulb market during August
After witnessing a sharp 14.1% drop on average in July, the prices of 40W replacement LED light bulbs continued to fall in the U.S. market through August with a smaller average decline of 3.7%. Vendors such as CREE and Philips had reduced prices of their products significantly during their promotional campaigns. Among CREE’s products, the price of a pack of six 8.5W 470lm bulbs fell 20% to US$62.26, while a pack of four 6W 450lm bulbs fell over 30% to US$27. Besides these examples, other vendors including Philips and EcoSmart have also cut prices for their products as part of their sales activities. Many markets outside the U.S. experienced a gradual price decline in August as well for 40W replacement products. Prices in Germany and the U.K. fell 1~2% on average, while China’s drop was 1.3%. Japan, however, was exception to this downtrend as the prices there went up by 0.9% instead.

The U.S. was also the market where the prices of 60W replacement LED light bulbs had the biggest drop. In July, vendors pushed the average price of these products down 9.5% with their promotional pricing strategies. Prices fell further in August with the average monthly decline at 3.9%. Among Philips’ products, a pack of four 11W 830lm bulbs fell 20% to US$45.41, and a pack of six 8.5W 800lm bulbs fell 2.57% to US$29.22. A pack of six 13.5W 800lm bulbs from CREE also dropped 20% to US$62.26. In the U.K., the price decline of the 60W replacement LED bulbs grew from 1.1% in July to 3% in August. However, only a minority of these products had significant price decrease. An example of such an extreme case is the price of a Verbatim 10W 820lm bulb, which plummeted near 30% to US$18.78 in the U.K. market. During the same month, prices of 60W replacement products also fell by 1~3% in other regional markets, including China, Taiwan, Germany and South Korea. Japan was again the exception to the price downtrend with its 60W replacement LED bulb market seeing a slight 0.2% increase.

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