On March 18, 2015, Li Jiannan, general manager of Yiguang Lighting Co., Ltd., used numbers to analyze the current industrial development status and future trends of the upstream, midstream and downstream LED industries at a recent meeting. He mentioned that compared with the output value of the epitaxial chip market of 8.4 billion yuan and a growth rate of 17% in 2013, the epitaxial chip market in 2014 benefited from the increase in the proportion of domestic chips and the maturity of technologies such as flip-chip and high-power LED chips. The total output value reached 12 billion yuan, a year-on-year increase of 31%. As the patents of major international manufacturers expire, LED technology continues to mature and become more transparent, and the market share of mainland manufacturers continues to increase. In the field of lighting, mainland chip manufacturers have continued their local advantages and become the absolute mainstream; at the same time, in the field of backlight, mainland chip manufacturers will also increase their promotion efforts.
Currently, there are more than 2,000 LED packaging companies in China. After years of fierce competition, the domestic LED packaging market has matured, and the companies have become as strong as international LED companies. The packaging market also maintained steady growth in 2014. Compared with the output value of 47.3 billion yuan in 2013, the domestic LED packaging output value this year is expected to reach 56.8 billion yuan, a year-on-year increase of 19%.
Looking at the entire LED lighting market, the application of LED packaging output value in the lighting market has increased significantly in 2014, with alternative light source products accounting for the highest proportion, followed by the engineering, commercial, and outdoor markets with the most significant growth. Relative to the growth of market output value, packaging technology is also maturing. Flip-chip structure COB, COF technology, and integrated packaged optical engines have become the focus of manufacturers.
With the explosion of lighting applications, the packaging of medium-power LEDs used in indoor products such as lamp tubes, bulbs, downlights, and ceiling lamps will still maintain its mainstream position in the market in 2015, accounting for an estimated 52% of the overall packaging share.
In 2014, the scale of China's LED application industry reached 275.7 billion yuan, a year-on-year increase of 31%. Among them, indoor lighting is still the main engine for the rapid development of the LED application industry. The output value of LED indoor lighting reached 108.2 billion yuan, a year-on-year increase of 73%, maintaining a rapid growth trend. Accordingly, the proportion of LED indoor lighting output value in the overall application industry output value has further increased, reaching 39.2%. The output value of outdoor lighting reached 14.7 billion, a year-on-year increase of 22%. Among them, benefiting from the rising demand in the export market, the output value of the street lighting industry achieved steady growth throughout the year.
In 2014, the output value of landscape lighting, display screen and backlight industry was 45.7 billion yuan, 28 billion yuan and 25.1 billion yuan respectively, with year-on-year growth of only 9%, 6% and 4% respectively. Among them, the landscape and display screen industries are affected by factors such as the change of government, and the overall development is flat. The rapid slowdown of backlight is due to the saturation of LED penetration rate and slow market growth. The scale of special lighting such as LED explosion-proof lights, LED medical, and LED plant lights has reached 9 billion yuan, a year-on-year increase of 44%, which deserves the attention of industry insiders.
Finally, Li Jiannan concluded that in the upstream chip market, industry concentration has increased and bargaining power is strong; in the midstream packaging market, the wave of production expansion continues, which will inevitably intensify the intensity of competition in the industry, and the scale advantage has not yet taken shape. The market is still relatively fragmented, without patent advantages and no added value; in the downstream application market, market competition is no less intense than in the packaging industry, with many product options, and LED devices are still a buyer's market.
In terms of channels, e-commerce will be one of the main channels for terminal sales. With the support of LED indoor lighting, e-commerce will maintain rapid growth. LED companies are in a fierce competition. International giants will develop with a more focused and segmented market, reduce investment in indoor lighting, and invest in professional markets and urban lighting.
ANNA