In 2018, due to the global economic downturn and trade frictions between China and the United States, the growth rate of LED market demand is not as expected, while in the supply side, whether in LED chip or LED packaging
industry, due to the expansion in 2017, the capacity of 2018 is continuously released. Overall, the phenomenon of oversupply in the industry is obvious.
Market demand is sluggish and the growth rate of lighting export is declining
According to statistics, China's LED chip market reached 17.1 billion yuan in 2018, up only 4% from the previous year, compared with 19% in 2017, and the growth rate dropped significantly. Starting in the second half of 2017, the capacity of manufacturers continued to release. By the end of 2018, the total capacity of mainland LED chip manufacturers reached 11.2 million chips per month (2 inches), an increase of 31% year on year. Capacity growth is faster than demand growth, leading to high inventories and falling chip prices.
In terms of local chip manufacturers, the total sales volume in 2018 was 15.5 billion yuan, an increase of 4% over the same period last year. Including large first-line factories, revenue is still rising steadily, while other small and medium-sized manufacturers' capacity has not increased and market prices have fallen, resulting in a decline in revenue.
In terms of chip supply, in 2018, mainland China's manufacturers accounted for 81% and Taiwan's manufacturers accounted for 18%. On the export side, China's chip export rate is 12% in 2018. However, as China is the world's leading packaging base and international orders are gradually shifting to the mainland in recent years, the total chip export volume is expected to remain stable.
In terms of packaging, according to statistics, the market size of LED packaging
in mainland China in 2018 was 69.7 billion yuan, an increase of 6% over the same period last year. Since the second half of 2018, due to Sino-US trade frictions, LED lighting exports will be greatly affected, and the impact will be difficult to eliminate in the short term. Therefore, the market demand in 2019 is still not optimistic, and the internal demand of the mainland market will be the main driving force for growth, including automotive LED, high-end business license, high-end backlight and display market.
From the supply side, the mainland manufacturers are still the main supply camp, accounting for 70% of the market in 2018, but the increase is not obvious. The main reason is that the high-end vehicle, high-end backlight and lighting market is still dominated by international manufacturers. In 2018, the revenue of international manufacturers in the mainland market remains 4% growth. In 2018, the revenue of local manufacturers in mainland China was 48.8 billion yuan, up 7% year-on-year. Including the first-tier factories, the revenue still maintained rapid growth.