LED price drop will alleviate in current quarter
On account of the stagnant demand and the inventory closeout, certain applications’ prices plummeted with the ASP sliding by 10%. As for the lighting applications, affected by the inventory pressure facing the LED makers and the mid and low-power LEDs’ price cut stemming from the fierce competition, the high-power LED’s price took a serious hit.
According to LEDinside, the price downturn started to alleviate in 1Q12: 5630’s price fell by 4%, and 7030 has not entered mass production, which resulted in its less competitive price. However, if it enters mass production smoothly, the price is expected to drop considerably by the year end. In terms of MNT, LED package and brightness have both reached the mature stage and the price has already hit the rock bottom; the price in 1Q12 merely dropped by 3%-4%. In regard to NB, fueled by the increasing popularity of Ultrabook and tablet PC, more and more LED manufacturers make their way into this sector, which causes the price of 0.8t LED to plunge by 8%. As for mobile phones, whose LED specifications are more mature, the price drop averaged 5%-6%. As for high-power LED, as the manufacturers are dedicated to upgrade the specifications and close out the older specifications, the price fell by approximately 10%.
Global major brand names’ new LCD TVs have gone into production in 4Q11, and the old ones have been closed out. 5630, whose price fell by 4%-5% in 1Q12, will be adopted in the next-generation LCD TVs and hit the market in 12’Mar at the soonest. In regard to the price gap between CCFL backlight module and LED backlight module, it is possible to see the gap further narrow on certain models, which will play an integral role in terms of LED TV reaching 70% penetration rate in 2012.
In 2012, the panel makers still prefer LED light guide plate with the size of 3mm. Hence, 7030 is expected to be the mainstream choice in 2012. At present, South Korean makers are the forerunner in this sector. However, the specifications, including drive current, LED chip volume and phosphor, every LED package maker adopts differ. The mainstream specifications will become clearer after the products hit the market for some time. Compared to the price in 4Q11, the price in 2H12 will likely fall by 15%-20%.
Mobile phone backlight is the first LED application to reach the 100% penetration rate, and is also the most mature application; its price decrease remains 3%-5% per season. Smartphone will adopt fewer LED and start using LED with higher brightness. Therefore, 0.6t LED’s brightness will be improved to 2700mcd. Currently, smart phones with brightness of 2400mcd and above are mainly from Japanese and South Korean makers; Taiwanese makers will have a hard time competing with them.
Moreover, Netbook begins to lose its place following the tablet PC’s product release, which causes many brand vendors to leave the netbook market. According to LEDinside, the market mainly consists of 12-inch (and bigger) notebook, 11-inch tablet PC (and smaller) and Ultrabook. The mainstream Ultrabooks adopt low voltage LED (0.8t LV), whose price plunged by 7%-8% due to the increasing Ultrabook makers. As for LCD displays, some brand vendors started to adopt 3014 in 1Q12, which can reduce the LED usage volume by half.
The maturity of 5630 results in its sharp price drop, which causes more and more lighting companies to use 5630 to make LED light tubes and light bulbs. The high power LED makers not only launches new specifications and enhance their products’ brightness in order to compete with South Korean manufacturers, but also lower their products’ prices to stimulate the market demand. The price decrease is expected to be about 10% in 1Q12.
As a general perspective from LEDinside, the LED industry will remain oversupplied in 2012. Although the releases of new LCD TVs fuel the TV backlight demand, the growth momentum for the market is limited. In light of the intensifying competition, the players will either survive or be forced to quit; manufacturers with good market development and technology strengths will obtain bigger market shares.
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