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The LED industry needs to dance at the "turning point".
Jun 05,2014
With the continuous popularization of green environmental protection and energy-saving low-carbon living concepts, energy-saving and environmentally friendly products are increasingly gaining attention from society. Green lighting represented by LED, with its outstanding advantages, has begun to penetrate the traditional market and has sparked a new revolution in the lighting field. China's semiconductor lighting industry has become one of the fastest-growing regions in the global lighting industry transformation and upgrading, establishing a strong development foundation. In 2014, China's semiconductor lighting industry welcomed an explosive turning point, with product prices continuously declining and the terminal market entering an unprecedented growth opportunity.
In 2013, the overall scale of China's semiconductor lighting industry reached 257.6 billion yuan, a 34% increase from 192 billion yuan in 2012, making it one of the fastest-growing years for the domestic semiconductor lighting industry since 2010. Among them, the upstream epitaxial chip scale reached 10.5 billion yuan, the midstream packaging scale reached 40.3 billion yuan, and the downstream application scale exceeded 200 billion yuan, reaching 206.8 billion yuan.
At the same time, the development of the lighting industry is mainly influenced by various factors such as government policies, manufacturing costs, and terminal user purchasing willingness. According to the "Roadmap for Gradually Phasing Out Incandescent Bulbs in China," starting from October 1 of this year, China will prohibit the import and sale of ordinary incandescent bulbs of 60W and above. Compared to traditional energy-saving lamps, LED lighting products are more energy-efficient and environmentally friendly, so the replacement of incandescent bulbs with LED lamps will have broad market space. At the same time, the government supports the energy-saving and environmental protection industry, and the LED industry, as a strategic emerging industry, has prominent energy-saving and environmental protection advantages, and its market prospects are highly anticipated by the industry.
In 2013, due to the dual effects of declining light source costs and policy promotion, the penetration rate of LED lighting products rapidly increased, and market prosperity continued to improve. In 2013, the domestic production of LED lighting products in China exceeded 810 million units, with domestic sales of about 400 million units, and the domestic market penetration rate of LED lamps reached 8.9%, an increase of nearly 5 percentage points from 3.3% last year, especially in the commercial lighting field, where the growth is even more significant. According to incomplete statistics, the penetration rate of LED lamps in the commercial lighting field has exceeded 12%.
Dr. Wu Mingming, research director of CSA Research, pointed out that from August 2013 to March 2014, the price of LED bulbs on Taobao dropped from 8.08 yuan/W to 6.10 yuan/W, a decrease of 24.5%. Over the past two years, the export price of bulbs has cumulatively decreased by 66%. However, from the data, the speed of price decline has significantly slowed down, which has a clear alleviating effect on the price war, but prices will continue to decline further.
In addition, the joint promotion of incandescent bulb bans by multiple countries and various energy-saving policies introduced by the Chinese government are favorable conditions for the development of LED lighting. Over the past decade, China's average annual growth rate has been 39%, with a production value of 257.6 billion yuan in 2013, initially forming an industrial cluster. In 2013, the LED lighting market in four major regions was launched, with the application value accounting for more than one-third. Next, China's LED industry will usher in a golden period of development.
On the one hand, technological advancements and large-scale production have led to a rapid decline in the packaging and application costs of components, causing the sales prices of LED lighting products to gradually approach those of traditional lamps.
According to the U.S. Department of Energy, it is estimated that by 2020, the cost of LED chips will decrease by 82% compared to 2013, the cost of LED packaging will decrease by 78%, and the cost of 60-watt LED chips will decrease by 66%. The decline in costs will be one of the main reasons driving the increase in the penetration rate of LED lighting products.
On the other hand, the continuous investment of government resources and the formulation of related policies are also promoting market development. 2012 was the peak period for the global first wave of incandescent bulb bans, with regions such as South Korea and Japan entering a comprehensive ban phase. In 2014, the European Union, the United States, and China will successively enter the mainstream phase of incandescent bulb bans, which will further enhance the penetration rate of LED lighting.
CSA Research predicts that in 2014, China's semiconductor lighting industry will continue to maintain rapid growth, with an expected growth rate of around 40%. In the epitaxial chip segment, as the application market fully launches, the production capacity accumulated from investments in recent years will gradually be released, and the production and value of epitaxial chips will significantly increase in 2014, with a projected value growth rate of around 35%. The competition in the packaging industry segment will be more intense, with an expected growth rate of around 20%, and more new packaging technologies and processes will compete. However, the evolution of LED packaging technology will always revolve around the theme of continuously reducing terminal usage costs. In the application segment, leveraging the advantages of Chinese manufacturing, the value growth rate in 2014 will exceed 50%. Welcome to search for "Dengqitong," an enterprise management expert designed specifically for the lighting industry, or follow "Smartlight Dengqitong" on Sina Weibo to stay updated on the latest developments and news in the lighting industry.
In terms of lighting applications, in 2014, as various countries further implement plans to phase out incandescent bulbs, LED lighting will achieve explosive growth, leading the Chinese LED application market, with accelerated penetration. It is expected that the overall penetration rate of LED lamps will reach 20%. Intelligent lighting will shine brightly alongside the construction of smart cities, while innovative application products such as wearable electronics, optical communications, and plant lighting will become new favorites in the market. As the demand for LED lighting begins to increase and the government successively introduces LED-related policies, it will inevitably accelerate the development of the LED industry market, and China's LED lighting industry will also usher in a golden harvest period at the market turning point.
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